Vodafone Business Strategy: A PESTLE, SWOT, and Porter's Five Forces Analysis

This report examines Vodafone's business strategy through a comprehensive analysis of the macro environment using PESTLE and SWOT frameworks. It further evaluates the competitive forces at play using Porter's Five Forces model, highlighting the company's strengths, weaknesses, opportunities, and threats. The report concludes with a strategic plan for Vodafone, outlining key goals, resource implications, and recommendations for achieving sustainable growth and market leadership.

Business Strategy
Vodafone

Table of Contents
INTRODUCTION...............................................................................................................................3
PART A.............................................................................................................................................4
LO 1..................................................................................................................................................4
P1 ANALYSE THE CAPABILITIES OF VODAFONE APPLYING PESTLE AND SWOT ANALYSIS
HIGHLIGHTING MACRO ENVIRONMENT AND THEIR IMPACT ON THE ORGANIZATION..........4
M1 CRITICAL ANALYSIS OF THE MACRO ENVIRONMENT FOR STRATEGIC DECISION MAKING
.....................................................................................................................................................8
LO2...................................................................................................................................................9
P2 INTERNAL ENVIRONMENT AND CAPABILITIES ANALYSIS OF VODAFONE...........................9
M2 CRITICAL ANALYSIS OF INTERNAL ENVIRONMENT TO ASSESS STRENGTHS AND
WEAKNESSES OF VODAFONE...................................................................................................13
PART B...........................................................................................................................................15
LO3.................................................................................................................................................15
P3 EVALUATION OF COMPETITIVE FORCES OF VODAFONE BY APPLYING PORTER’S FIVE
FORCES MODEL.........................................................................................................................15
M3 STRATEGIES TO IMPROVE COMPETITIVE EDGE AND MARKET POSITION BASED ON
OUTCOMES................................................................................................................................18
LO4.................................................................................................................................................19
P4 & M4 INTERPRETATION AND DEVISING STRATEGIC PLAN FOR VODAFONE.....................19
CONCLUSION.............................................................................................................................25
REFERENCES...................................................................................................................................26

INTRODUCTION
Business strategies are commonly defined as the organization's high-level plans for attaining
the goals and objectives. Strategies are developed by the organization's management to
achieve success and growth in the industry. As the competition level is increasing day by day
effective strategies are really important to maintain an effective position in the market. the
strategy is the most important element for an organization towards the growth and overall
development of the company (Vlachos, 2016). In this report, we will be discussing the business
strategic management of Vodafone in order to attain their business objective and effective
planning. The macro factors which influence the business functioning and strategic
management of Vodafone will be analysed by the PESTLE analysis. A strong business strategy is
beneficial in gaining high productivity and growth of the business because it reflects the
position of the company in front of the competitors.
The company make different strategies in order to achieve different goals and objective for the
business they all strategies support each other for accomplishing the desired goal of the
business or we can say that framing strategy is all about meeting the goals.

PART A
LO 1
P1 ANALYSE THE CAPABILITIES OF VODAFONE APPLYING
PESTLE AND SWOT ANALYSIS HIGHLIGHTING MACRO
ENVIRONMENT AND THEIR IMPACT ON THE ORGANIZATION.
The PESTLE analysis the best tool for analysing the macro factors which are affecting the
business strategies of Vodafone. The PESTLE analysis is as follows to analyse the impact of
macro environment on their business.
PESTLE ANALYSIS
Vodafone is a telecommunication company which provide communication and mobile services
to their customers. The company follows the government policies and proper management for
smooth business functioning and maintain the good relationship with their customers. the
company was founded in 1982 and the headquarter of the company is situated in Newbury
England, UK. The company is the third largest company in providing telecommunication and
internet services nationally and internationally (Mourdoukoutas, 2015). There are some factors
which influence the strategic management of Vodafone which will be analysed through the
PESTLE analysis.
Figure- PESTLE Analysis
Source- (https://blog.essaycorp.com/pestle-analysis-for-construction-industry/)

POLITICAL FACTORS
Vodafone is a telecommunication company which follows the government policies and rule
and regulation to maintain the effective position in the market and a brand image to
maintaining the customer's relations (Marx, 2015). The changing government policies impact
the business strategies of Vodafone. To reduce the political impact the Vodafone should take
government permission before launching new communication channels.
ECONOMIC FACTORS
Inflation rates, employment rates, interest rates, exchange rates, and changing import and
export policies these are some factors which can be influenced by the business strategies of
Vodafone. Moreover, the recession also affects the Vodafone's growth (Chen, et al. 2015). The
company has to change their policies at the time of recession in order to compete with the
other competitors and attract customers towards their products and services.
SOCIAL FACTORS
The social factors which affect the strategic management of Vodafone such as changing
attitudes and beliefs, the lifestyle of customers, education, and increasing demand of mobiles
and communication networks (Jaakkola and Hallin, 2018). As the company have chosen a
strategy to provide better services to the customers and gain profit from them so, the company
can reduce the negative effect of social factors.
TECHNOLOGICAL FACTORS
Technological factors positively affect the business organization. The technology is improving
day by day and the use of new and advanced technology can be beneficial for the company's
growth and development. The Vodafone should use new and advance tool of technology in
order to develop the effective business strategy to face competition and attract the customers.

LEGAL FACTORS
All the companies have to follow the legal policies to maintain their brand image in the
industry. Vodafone also follows the legal policies like taxation, environmental policies, and
other rule and regulation applied by the government of the country (Trevisan, 2016). Following
the legal policies will be beneficial for success and growth of the company and also in
maintaining the effective brand image in front of the customers and other competitors.
ENVIRONMENTAL FACTORS
Apprehension about environmental factors is rising day by day. Telecommunication industries
are also one of the reasons which influence the environmental factors. Vodafone has developed
the technological creativity and innovations that are harmful to the environment and affected
the emission of CO2. Vodafone contributes to tree plantations and events that are conducting
to improve the environment.
SWOT ANALYSIS
The internal environmental factors can be analysed with the help of SWOT analysis. The impact
of micro factors on business strategies of Vodafone can be analysed by SWOT analysis.
STRENGTHS WEAKNESS
• Vodafone is adopting advanced and
innovative strategies for advertising is
the market that will attract the
customers toward their products.
• The company is having the strong
financial condition in the
telecommunication industry.
 Vodafone is having large market
coverage as the company is providing
• The completion level is very high
in telecommunication services
company.
• Day by day the company is
declining subscriber base that
would be the barrier to company's
growth.
• Vodafone is providing weak
performances in the European

services nationally and
internationally.
market that can affect the
effectiveness of business in the
market.
OPPORTUNITIES THREATS
• The company is rising the
investment in order to generate
revenue rate and more profit
from the market.
• The company can enlarge the
business structure with the help
of new technologies and strong
financial conditions.
• In Africa the company providing
best services to the customers,
therefore, the company is having
huge potential in the African
market.
• The increasing competition level
would be the big threat to the
Vodafone.
• The company has been faced the
loss because of recessions.
• The economic changes and
changing government policies
impact the internal and external
environment of business.

M1 CRITICAL ANALYSIS OF THE MACRO ENVIRONMENT FOR
STRATEGIC DECISION MAKING
The company is proving telecommunication services and benefits nationally and internationally
to the customers. as we have analysed through the PESTLE Analysis the political factors such as
changing government policies, import and export police and other legal factors are affecting the
strategic management of Vodafone. To compete with the other companies and reduce the
effect of legal factors on the company Vodafone is following all the government policies and
legal values in order to attain the business goals and objectives (Sargeant and Jay, 2014). The
economic factors such as inflation rates, tax rates, changing beliefs and attitudes of customers,
and lifestyle affecting the decision-making process of Vodafone. On the other hand, the
technological factors affecting the business strategies and decision making in a positive way.
With the help of new and advanced technologies company can innovate different products and
provide advanced services to the customers.
The social factors are also affecting the strategic management and decision making of
Vodafone. The changing preferences of customers towards the products and services will affect
the business of Vodafone. There are the different type of customers and they all have different
requirements and need the company has to fulfil their needs and demands.
The advancement of technological tools can be beneficial for overall company’s growth. With
the help of advanced and new technologies company can innovate products and services
according to the need of customers.
The environmental factors negatively influence the decision making of Vodafone because the
awareness towards the environment is increasing day by day (Bortolotti, et al. 2015). The
company cannot perform any activity that would be harmful to the environment because this
will affect the business and brand image of the company.
Thus, the macro environmental factors affecting the strategic decision making in the positive
and negative way. The company need to maintain the balance to face the negative and positive
impact of external environmental factors.

LO2
P2 INTERNAL ENVIRONMENT AND CAPABILITIES ANALYSIS OF
VODAFONE
With the help of value chain analysis, the internal environmental elements and capabilities of
the Vodafone can be analysed that would be really beneficial for the company’s growth and
development.
Figure- porter’s value chain analysis
Source- (http://tracks.roojoom.com/r/10722)
PRIMARY ACTIVITIES
The Vodafone maintain many activities in the business. The primary activities are directly
related to the developing the product and delivering it to the customer. The primary activities
can be understanding the five main elements such as inbound logistics, outbound logistic,
operations logistics, marketing and sales logistics (Nagara, et al. 2015). All the elements of
primary activities are related to each other and support the effective performance of the
business in order to achieve the goals and objectives.

SUPPORT ACTIVITIES
Support activities are helpful in performing the primary activities for attaining the
organizational goals (Hogan and Coote, 2014). The support activities mainly cover four areas
such as technology development, research and development, human resource management
and infrastructure of the company and procurement. The support activities help the
Vodafone in creating innovative strategies to attract the customers.
MCKINSEY 7S OF VODAFONE
Figure- McKinsey 7s model
Source- (http://fmcg-marketing.blogspot.in/2007/11/7s-mckinsey-model.html?
view=timeslide)
The McKinney is a management model which describe the 7 elements which will be helpful for
the company in effective decision making and manage the performance and productivity at the

workplace. The 7 elements of this model are skills, structure, strategy, staff, style, system, and
shared values which will be beneficial for the Vodafone in making effective business strategy
and improving capabilities.
STRATEGY
With the help of creating the effective strategy, Vodafone can improve the performance and
enhance their area of work.
STRUCTURE
The Vodafone is having a huge structure as the company is proving the services worldwide and
the main aim of the company is providing quality services to their customers.
SYSTEMS
The company follows the innovative management system in order to attract the customers
towards their product (Shiri, et al. 2015). This innovative and creative system is one of the
reasons behind the success of the organization.
STAFF
As per the data of 2017, the Vodafone is having 108,271 employees. All the employees work
hard and having creative thinking and potential for development of the company.
SKILLS
The Vodafone provide training and development programs, and career development programs
for improving skills and knowledge of employees (Awino, et al. 2017). The employees feel
motivated and encourage with these training programs and this will also enhance their
knowledge.
STYLE
The Vodafone follows the innovative styles and advanced techniques that help in increasing
profit and taking effective decisions for the company.

SHARED VALUES
Commonly shared values are the organizational values which are developed and maintain by
the manager or leader of the company and followed by the other employees of the
organization. these values define the culture and structure of the organization (Tawanda, et al.
2015). The shared values of Vodafone are like new techniques, innovation, creativity, and
inspiration which help the company in overall growth and development.

M2 CRITICAL ANALYSIS OF INTERNAL ENVIRONMENT TO
ASSESS STRENGTHS AND WEAKNESSES OF VODAFONE
The internal environment of Vodafone has been analysed by the SWOT analysis which includes
the strengths, weakness, opportunities, and threat of the organization. The critical analysis
includes the following factors:
ORGANIZATIONAL STRUCTURE
The Vodafone follows the Matrix structure management system in which the company have
more than one manager and effective functioning of work (Mendis, et al. 2015). The Vodafone
is having effective and supportive organizational structure where the employees support each
other to maintaining the good environment in the workplace.
ORGANIZATIONAL CULTURE
Vodafone is having an innovative and supportive organizational culture where all the
employees are creative and helpful to each other (Alvesson and Sveningsson, 2015). In this
structure, the workers report their work to more than one manager. The different innovations
are helpful in gaining the attention of the customers.
FINANCIAL STRENGTHS
The Vodafone is the third largest company in the world in providing telecommunication
services. The company is having a strong workforce of 108271 skilled employees and the
effective brand image in the market.
HUMAN RESOURCES
There are many types of works available in the company and the work is divided according to
their skills and knowledge. Skilled and innovative employees are the main asset of business
organization in order to achieve success.
ASSETS
As per the data of 2017, the asset turnover ratio of Vodafone is 0.16 and the current quick ratio
is 0.95 that indicates that the company is not able to fulfil the liabilities.

MANAGEMENT
The Vodafone is one of the largest company in telecommunication company and manages the
business worldwide. The Vodafone values all the employees working in the company and
consult them before decision-making (Bertozzi, et al. 2017).

PART B
LO3
P3 EVALUATION OF COMPETITIVE FORCES OF VODAFONE BY
APPLYING PORTER’S FIVE FORCES MODEL
Porter five forces will act as a holistic strategy framework that will take the strategic decision on
part of Vodafone taking into consideration the present competitiveness. Through this model,
Vodafone can take competitive advantage over its competitors and explore the opportunities in
the technological sector (Chang, 2016).
Fig: Porter Five forces analysis
Source: Adamkasi, 2017
Threats of new entries
There is a high barrier to entry in the wireless telecommunication industry which leads to the
low threat of entrants in the market. There is a need to pay high licensing fees to enter this
market and there are also some regulatory issues that are prevalent in this industry. So there is
the low threat of new entries in this sector. Due to the high infrastructure costs involved in this
segment, there is a difficulty for new entries to cope with it and the technological trends also

makes it much costlier process. So Vodafone has been successful in coping with all these and
maintaining better efficiency (Rodrigo, 2012).
Bargaining power of suppliers
Vodafone has a high bargaining power of the suppliers as they have the powerful supplier's
base in the technology sector that utilises their negotiating powers to gain higher prices from
the wireless communication sector companies and thus decreases the margins for Vodafone.
Vodafone still operates with reasonable margins as compared with the competitors.
Bargaining power of buyers
Vodafone has much-demanding buyers as they need best offerings but in exchange for minimal
prices which in terms impacts the profitability of the Vodafone in long term. There is high
bargaining power of the consumers for Vodafone which is demanding many attractive discounts
and the offers. There is cutthroat competition in the telecommunication industry so there is
high bargaining power of the buyers which leads to reduced prices and falling profitability
(Rodrigo, 2012).
Threats of substitute products and services
Vodafone has many threats that are entering the industry as the CDMA services and the
landline services that are facing a huge fall due to broadband services leading to a threat to
Vodafone. There are many substitutes for the similar products and services such as video
conferencing, Skype, Yahoo Messenger and man more has substituted the mobile services
which are leading to the high threat of substitutes for Vodafone. There are many other
substitutes for the hardware drives such as Dropbox and Google Drive (Bertozzi, et al. 2017).
Rivalry among the existing competitors
In the wireless communication industry, there are many rivalries of the existing competitors
which are also faced by Vodafone. The existing player in the market in same industry like Sony
Corporations, City Fibre and EE and many more create an impact on the competitiveness and
the fall the profitability of the firm. Vodafone is the one that faces a lot of rivalries due to the

existing player’s intensity which affects the long-term profitability of Vodafone. The
competitors render low call rates and the innovative products and services which are leading to
pressure over Vodafone (Bertozzi, et al. 2017).

M3 STRATEGIES TO IMPROVE COMPETITIVE EDGE AND MARKET
POSITION BASED ON OUTCOMES
In order to outstand with the competitiveness, Vodafone can undertake the following strategies
as devised by using the Porter Generic strategies.
Differentiation strategy
The unique selling proposition of Vodafone is Zoozoo that helps in advertising its products and
services in an effective manner. The segment that is selected by it is the upper class and the
above people which also cover the corporates and the students through its attractive plans and
offers. Thus through differentiation strategy, it can render the best network and quality returns
to its customers which will help in combining with the broad target through uniqueness and
thus enhance the brand loyalty (Bertozzi, et al. 2017).
Low-cost strategy
It is an emphasis on the connection with the handset in its low-cost strategy which will focus on
the lower middle class and targets villagers, poor and so on. It can employ the cost-saving
technologies which will over the average customer general set of utilities (Yadav, 2015).
Core competencies
Through this strategy, Vodafone is focusing on the standardised CRM process that will help to
better build relations with the customers and solve their issues. It is formulating innovative
ideas through which it can focus on its core competencies and enhances the brand visibility. It
can enter into strategic alliances to cut short the competitions and the tie-up with the
international sports like Formula One has also helped it to override the competitive edge
(Bertozzi, et al. 2017).

LO4
P4 & M4 INTERPRETATION AND DEVISING STRATEGIC PLAN FOR
VODAFONE
EXECUTIVE SUMMARY
In the following strategic plan, the concerns have been laid out drawing out the strategies for
Vodafone so that it can effectively overcome the internal as well as external threats and issues facing
it. And the strategies are devised that has helped it in enhancing its strengths and the opportunities
that have helped it to boost the profits and maintain its competitive edge in the fiercely competitive
industry. The Market and competitor analysis have helped to depict the relevant factors that may
influence the success of Vodafone and drive it towards the mission and vision statements effectively.
BACKGROUND STATEMENT
Vodafone is seeking to expand in the sector of telecommunication by injecting in its strategies
the innovative and new products and services aligning with the technological developments
and the changing needs of the customers so as to gain a competitive edge.
ORGANIZATIONAL STRUCTURE
The organisational structure of Vodafone is such that there are formal as well as informal
channels for communication in an organisation that is used by employees so as to address the
issues of the future. It has utilised an aggressive leadership style that has led to its growth and
success in past years (Plan, 2017).
MISSION STATEMENT
The mission of Vodafone is to generate daily opportunities that enhance the communication
and lent in profits. It also works for rendering the customers flexibility and the freedom such
that it can render best customer experience to them.
VISION STATEMENT

The vision extends to become the world’s leader in mobile communications and help the
individuals by enriching their lives and render effective connections in the mobile world
between the businesses and communities (Chang, 2016).
VALUES
The organisational culture focuses on the employee engagement and the well-being of its
employee through rendering them health and safety services. The main values that are
focussed by Vodafone include the customer experience, inclusion diversity and the excellence
(Spencer, 2015).
MARKET ANALYSIS
Ansoff’s matrix
Through Ansoff's matrix, Vodafone can enhance the market share and take advantage of the
various new opportunities in the telecommunication sector (Plan, 2017).

Fig: Ansoff’s matrix
Market penetration
Through new marketing strategy, Vodafone can reach more customers which can help in
enhancing its sales and profitability in return (Cascio, 2018).
Market development
Vodafone is targeting new markets and the new areas where it can expand its existing products
so as to reach every part of the world through its strong communication services and products.
Product development
Vodafone can extend the product lines in an innovative manner. Through the related products
developments such as headphones and other telecommunication accessories, it can capture
new markets and improve the customer services and experiences as well.
Diversification
This strategy will be undertaken by Vodafone so that it can use its existing expertise and
achieve the economies of scale and thus explore all the opportunities of this sector and industry
(Chang, 2016).
COMPETITOR ANALYSIS
Porter five forces analysis
Buyer’s power
There are high bargaining and negotiation power of buyers in the telecommunication industry
which leads to high pressure on Vodafone. Due to the similar offerings in the same market, the
buyers have high negotiating powers.
Supplier’s power

The Vodafone suppliers have high bargaining power as Vodafone operates with high
profitability as compared to its competitors in the same industry in the UK. This high bargaining
power is affecting the profitability of Vodafone (Cascio, 2018).
Substitute’s threat
There are many substitute products available for the consumers against the products and
services as offered by Vodafone. This leads to high threat suffered from the substitutes. The
competitors offer the customers with similar products and services that too at low cost.
New entries threat
There is a low threat of new entrants as this industry demands high technological advancement
costs and the infrastructure costs which leads to the low entry of new entries. There is also a
barrier to entry in this industry which leads to reduced threats to Vodafone (Bertozzi, et al.
2017).
Industry rivalries
There are many existing competitors of Vodafone that includes organisations like BT, EE, Sony
corporations and many more these leads to extreme rivalry with Vodafone.
SWOT Analysis
STRENGTHS WEAKNESSES
 STRONG DIVERSIFICATION IN DIFFERENT
LOCATION
 STRONG TELECOMMUNICATION
NETWORK
 STRONG BRAND NAME (Barkauskas, et
al. 2015)
 RETURN ON ASSETS IS LOW
 LACK OF ACCESS TO RURAL AREAS
 INFLEXIBLE PROCESSES AND SERVICES
 HIGH CHURN RATE IM CONSUMERS
OPPORTUNITIES THREATS

 EFFECTIVE POSITIONING CAN HELP TO
GAIN COMPETITIVENESS
 CAN IMPROVE INTERNET SERVICES
 CAN GROW IN RURAL AREAS TOO
 MANY COMPETITORS IN INTERNATIONAL
AND LOCAL MARKET
 LICENSING AND OTHER REGULATIONS
FOR INFRASTRUCTURE (Barkauskas, et al.
2015)
 LIMITED RESOURCES ACCESS
PORTFOLIO ANALYSIS
BCG matrix
This will help to analyse the portfolio of the Vodafone which will involve the products, services and
the brands that it caters to customers.
This tool has four quadrants on the basis of which the portfolio of Vodafone can be grouped under
each category as under:
Cash cows Stars
 Fallah program of Vodafone  Mobile cellular packages
 Prepaid call rates
Dogs Question marks
 Landline connections  Broadband connections
KEY STRATEGIC GOALS
Some of the strategic goals that will help Vodafone to grow its market share and overcome
competitiveness are as under:
 It can retain the market leadership through the quality of the network and thus retain the
customer satisfaction as well

 It wants to become the market leader of telecommunication sector in the UK till 2020 by
increasing its market share by 5% (Spencer, 2015)
 It aims to create a Gigabit society that will render high-speed connectivity
RESOURCE IMPLICATIONS
In order to gain the competitive edge, it should focus on altering its strategies in accordance
with the needs of the customers and the technological trends. Through employing the
innovative employees it can render new services and products to the market.
EVALUATING AND MONITORING THE PLAN
Suitability
This strategic plan is suitable as it will duly meet the Vodafone mission and objectives and on the
defined time frame. The strategy framed is strictly viable one and addresses the external factors and
issues so that Vodafone can clearly achieve its aims and objectives. The strategy drawn out is helped by
Vodafone to gain a competitive edge.
Acceptability
The strategies drawn out by Vodafone are highly acceptable to the shareholders of Vodafone and are
not leading to any unacceptable risks. The strategies are highly supported by the management and
focus on the employees as well as consumers. The suppliers and the customers are duly considered in
the strategies that lead to its acceptability.
Feasible
This strategic plan is feasible as Vodafone has all resources available to it that can help to meet the
needs of the strategies that are laid out. There are highly innovative capabilities of Vodafone that will
help it in delivering the planned strategies.
RECOMMENDATIONS

In order to gain competitiveness and the desired market share, it is recommended for Vodafone to
adopt leadership strategy and maintain the focus on its cost so that more customers can be attracted.
Through rendering the innovative and cheap network services it can conquer the untapped market
share. It is recommended that it should try to reach the rural areas as well so that it can increase its
market share.
CONCLUSION
In a nutshell, through this assignment, it can be connoted that through the internal and
external analysis of the environment and the organisation of Vodafone it can take immense
benefits to maintain its competitiveness in the wireless telecommunication market. This will
help it to frame business strategies which will help it to overcome the present threats and the
weaknesses of the organisation and gain the strategic goals in future. Through the competitive
analysis, the competitive edge is discovered which have helped in understanding the impacts of
the factors in the strategic management decisions. In the end, the strategic management plan
has helped to reach the desired goals of the company and thus take the corrective actions in
future.

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