Analyzing the Impact of Macro Environment on Vodafone's Strategies

Business Strategy
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies..........................................................3
TASK 2............................................................................................................................................7
P2: Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks..........................................................................................................7
TASK 3............................................................................................................................................9
P3: Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.......................................................................................................9
TASK 4..........................................................................................................................................11
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation........................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Business strategy can be stated as the competitive moves taken by business to compete in
the market successfully, attract customers, strengthening performance and attain the goals of
company. This outlines the way businesses must perform to reach the desired goals and
objectives. In an organisation, management develop several strategies and take various decision
that helps in leading the business towards growth and success. There are three levels on which
the strategies of business are developed including corporate, functional and business level.
Development of effective strategies helps in gaining competitive advantage in market (Alsoboa,
and Aldehayyat, 2013).
Vodafone Group plc is one of the leading multinational telecommunication organisation of
Britain which offer broadband, internet television, fixed line telephone, mobile phone, IPTV,
digital television and fixed line telephone products and IT services to customers. The company
was established in year 1991 by Ernest Harrison and Gerry Whent and its headquarters is located
in London, United Kingdom. This report covers analysis of impact of macro environment on
business and its strategies along with the analysis of internal environment and capabilities of
organisation. It also analyses porter's 5 forces to the given market of company. At last, different
theories and concepts are applied to device strategic planning for organisation.
TASK 1
P1: Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies
External environment is referred as the combination of different factors which are present
in the surroundings where business operates and have high influence on activities and operations
of company. For running the business operations effectively, the manager of Vodafone requires
to properly analyses the external environment factors on continuous basis so as to determine the
changes that takes place in the market and appropriate strategies can be developed (Bentley,
Omer and Sharp, 2013). In order to analyze external environment, PESTEL analysis framework
is an appropriate tool. It consists of 6 factors which impacts on the operations and strategies of
Vodafone. The impact of the external factors on strategies and operations of business are
discussed below:
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Political factor: It involves the forces like changes in policies and regulations of
government, tax regulation etc. In United Kingdom, the political environment is highly stable
and is known as one of the successful nations in terms of corruption control, government
effectiveness, rule implementation and regulatory quality. The politically stable environment in
the country provides an opportunity to the company to run its business operations efficiently in
the market. However, if the political environment of country is not stable, then it may impact on
the strategies of Vodafone as it need to change its policies and practices as per the changes takes
place in laws and regulations made by government. Apart from this, increasing competition is
one of the issue faced by company, despite of this, it has maintained its organic growth with
increased service revenues by 0.3 percent, EBIT by 9.4% and EBITDA by 3.1 percent in the
following year (Cserháti, and Szabó, 2014).
Economic factor: This is a significant dimension which covers foreign exchange rates,
inflation rate, deflation rate, etc. In the developed, the chances of expansion of Vodafone are
high. Good gross domestic product of nation demonstrate that the income of individual is more
and they are more inclined to buy latest communication technology. This provides an advantage
to Vodafone to increase its profit and attain good position in market. However, the economic
crisis which organisation has been facing currently impacts on the operations and strategies of
company. From some years, United Kingdom has experienced downturn because of Brexit and
currently, due to spread of corona virus pandemic, the economy is impacted adversely and this
directly impacts on the financial health of organisation. However, the strategy of five-point plan
of Vodafone provides an advantage to it to counter the influence of covid-19 (Cacciolatti, and
Lee, 2016).
Social factor: It is the factor which is purely based on the believes and culture of people,
their perceptions, needs and differences. Changing lifestyle of people and social trends impacts
on their buying habits. The preferences of people and consumption patterns have changed a lot.
In United Kingdom, over half of the population is aged between 16 years to 75 years which
means around 53% of people are using smartphones and need a high speed internet (E. Dobbs,
2014). This is an advantage for Vodafone as it provides high speed internet to the people over
low frequency rate. However, if company is not able to analyse needs and demands of customers
and offering them services accordingly, then it impacts on operations and strategies of company
in an adverse way and may lead to decline its profits.
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