Management of Economic: Vodafone: Mobile phone network

This report discusses the management of economic factors in Vodafone's mobile phone network business. It covers the identification of demand and market equilibrium, the impact of factors on demand elasticity, and Vodafone's pricing policy. The report concludes by highlighting the importance of understanding and managing these economic factors for the success of the business.

Management of Economic: Vodafone: Mobile
phone network

Table of Contents
INTRODUCTION .........................................................................................................................1
TASK 1............................................................................................................................................1
About the business ......................................................................................................................1
Identification of demand and market equilibrium. .....................................................................2
Brief explanation regarding whatever demand is more elastic or more inelastic .......................4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Economics is consider as essential factor of economy as it define the impact of various
elements of demand and supply which influence organization to formulate their business
policies. To understand this concept Vodafone has been taken. It is consider as one of the largest
telecommunication organization which offer their service more then of 30 countries. This report
has been define a brief introduction about the company. It also define factors which affect or
become the reason of shifting demand curve, this also includes pricing policy Vodafone and to
apply for increase their number of customer.
TASK 1
About the business
Vodafone is is consider as one of the most popular organization of UK. This organization
run its business in telecommunication sector. Registered office of Vodafone is established at
Newbury Berkshire, and its headquarter is situated at London. The company help in provides
economic contributions towards UK economy. It is multinational corporation, which provides
telecommunication, service. It also provides, broadband, mobile network, digital television,
internet television services to their customers. Providing mobile network is consider as one of the
essential product to this organization as more then 60% of revenue has been gained by engaged
in offering mobile network services (Kerl, 2018).
The organization start it business in 1985, it is consider as first cellular network which
launch in UK. At the initial stage it provides its telecommunication and voicemail services to in
market. Since its incorporation Vodafone was merged with Racal however in 1991 it become the
independent organization. The company engaged in spreading its market share in Germany,
Australia, .It is connected with Mannesmann AG Vodafone quire Eircell. This company merge
with Airtel and British Telecommunication to set up their own network. The main purpose of
offering network products is that since 1990 after IT revolution the demand of network
technology internet is increase thus for attaining the vision of the best telecommunication
company it starting dealing in network sector.
The Main purpose of choosing mobile network as their business product is that its
management department knows after IT revolution the demand of internet as well as
telecommunication services has been increase thus to attain the goals of becoming top
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telecommunication organization in the world. The company deal with German as well as
Australia organization they also merge with British Telecommunication and Airtel for spread its
market.
Vodafone run its business at oligopoly market sector. There are few competitors for
Vodafone each have their own target market customer. Telstar, Orange, Tata communication,
Telefonica all are the rival companies of Vodafone.
At present time Vodafone run its market at India, Europe, Mid East, Africa. Vodafone to
enhance their market increase their shareholding in Telecom organization, up-to 70.%,
Their main focus is to gain their target market at Asian countries as their will be wider scope of
generating product thus they focus on Indian market.
Identification of demand and market equilibrium.
Market economy has been change with the impact of demand as well as supply factors.
Theses are consider as essential elements on the basis of that organizations change their policies.
Demand and market equilibrium showcase the stage where the market demand as well as its
supply are equal or no profit and no loss stage. Following are the elements which directly impact
on Vodafone equilibrium
 Price of Substitute: Theses are consider as those product which customer may use when
they are not using particular product. Theses products basically offer to reduce the
dependence of one particular product and increases the competition rate regarding
particular products. Customers prefer substitute products when the price of their specific
product are high thus it directly impact on the market equilibrium products. BT, Airtel,
JIO, Soft Bank, China Telecom all are provides best network. Especially in case of Asian
contingent JIO or Airtel give toughest competition of to the net work of Vodafone even
though the price rate of these network are high but due the the level of quality and rate of
customers satisfaction customer focus on using theses network. However in China the
price share of China Telecom is comparatively low thus they adversely impact on the
demand or supply curve of Vodafone (Khan, and Suhaib, 2019).
 Price of complements: Theses are consider as products which are help in add value of
another products. Complements goods are products which consumer use with the other
specific product. When the price of specific product has been increase then demand of
complementary product has been decline and vice versa. The line of equilibrium shifts
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from left to right. Mobile network of Vodafone deal with mobiles, and other network of
telecommunication. The basically deal with mobiles. Vodafone is connected or merge
with Samsung thus when the price share of Samsung has been increase then the demand
of this network goes down and vice versa. This organization also tie up with local
networks of Mid Asian countries. The price of cable, mobiles, applications has been
directly impact on the Vodafone earnings. At present share price of all these are decline
this complementary products are not adversely impact on the demand equilibrium of
Vodafone.
 Consumer Income: This is consider as relevant factor and organizations policies are
directly influences with income level of customer. When the level of income is
comparability low then the demand of products is decreases and when customer level of
income is high then demand of luxurious product has been increases. Vodafone mobile
network are widely spread all over the word. income group are different due to the
impact of geographical as well as demographical factors. The number of customer has
since 2013 gas been increase all over the world Specially in India , here the market rate of
Vodafone mobile network is as compare to their rival industries. It offer its service more
then of 30 countries which includes USA, Germany. Africa Italy UK. Income of
customer in UK is comparatively high thus in UK the hare price of Vodafone is high as
compare to Asian countries (Kruis, and Sneller, 2018).
 Consumer taste and preferences: Customers is the king of market. With the changes in
technologies , developments and increment in the rate of literacy customer. become more
aware regarding their preference and products they want to purchase or giver them
satisfaction. Thus customers preference directly impact on the market rate of particular
product. Theses preference are change with the change of time.
Values of customer are differ from each geographical sector, The demand of customer in
USA regarding the mobile network is advanced as the level of technology development is
comparative high thus the preference of customer regarding the Vodafone is high. It directly
impact on their share price. On the other side customer belongs from UK has satisfied with the
service of Vodafone thus the price rate and revenue attain from this sector is high.
 Consumer expectations: Organizations need to formulate their product and service
according to the need of customer. As every target market customer has their own
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demand preference and expectations which is essential of organization to fulfilled. If
they are not able to complete the demand of customers then it is hard for organizations to
maintain their long term sustainability with the competitive market environment.
Customer belong from USA expected better services and network facilities from
Vodafone. Thus the price rate of Vodafone share is comparably high directly impact on
the demand of Vodafone mobile network. In case if the organization not able to complete
the demand of their stakeholders then the price of this share has been decline as well as
they also not able to manage their market equilibrium curve which shifts from left to
right.
 Demographics: It consider as factors which affect or represent the different , size, factor
of population, income, age affect the demand of products. Vodafone is run their business
at wider area thus the demand of each demographic factors are unique, specially in case
of Mid East countries where the demand of mobile network is as comparatively high but
due to their technique issue Vodafone not able to provides them effect services or
network to their customer (Altamirano, and van Beers, 2018).
Value of demographic factors has been directly impact on the price of share of Vodafone. Its
demand has been increase in UK as compare to other countries and the curve also shifts from left
to right due to the change of theses factors.
Brief explanation regarding whatever demand is more elastic or more inelastic
Elasticity of demand: The term elasticity is consider as measurement of percentage
change in demand of particular product with changes in other or relevant factors. Which
generally include, price, income, demographic factors or preference of customer. There will be
many factor which directly impact on the elasticity of demand curve. Theses are useful for
organization to determine adverse or positive impact of changes in various elements as well as
on the basis of that business entities formulate their policies.
Elasticity refer as change percentage on the other side there will be many factors or
elements which are not influence with the changes of price or other factors these are consider as
inelastic demand of product. Generally this case is refer only for necessary or luxurious or
essential food item. Vodafone's products are directly influence by many of factors and their
elasticity is comparatively high or low depend on the factors which influence their elasticity
curve.
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Impact of factors on elasticity or in elasticity of demand of Vodafone:
Impact of substitute: Price of Vodafone products is comparatively change with the
change of pieces of their rival industries product. When Airtel increase price of their network
then demand of Vodafone user has been increases in different countries. Broadband is highly
elasticity product in Vodafone thus with the changes of pricing policy of substitute product,
demand of Vodafone broadband has been increases and it impact on the equilibrium curve also.
On the other side when their price of telecommunication product or applications of Vodafone has
been increases then at the time number of customers who use what's up or other chatting
application has been increase which shifts curve of demand.
Impact of luxury products: Demand of these products are in elastic as compare to their
product. As people who demand for luxurious product belong from high class, thus they don't
have any effect of if the price of luxurious product has been increase or not. In case of Vodafone
the price of its broadband or its service of providing digital television is as comparatively high
but in case of UK and market of USA the demand of these products are inelastic as most of their
customers belong from high society thus they don't have any impact of change in the prices of
theses products (Masoud, 2020).
customer preference: Elasticity of demand of products has been change with the impact
of customer's preferences. This consider as most flexible elements. Preference of customer in
case of Vodafone product has been change when new techniques or application or new network
service are offer by their rival industries. This directly reduce the demand of mobile network of
Vodafone. Thus it is directly impact on the equilibrium curve of Vodafone. In 2017 customer of
Vodafone belongs from Indian market their due to the changes of preference regarding mobile
network they choose Airtel over Vodafone which reduce the demand of Vodafone in Indian
market an its share decline.
Impact of essential products: Generally in case of necessary or essential product the
demand of product remain inelastic. As these are essential items and changes in the price rate
does not impact of their demand because of the basic requirement of human being. In case of
Vodafone broadband, or network at South East of African countries are irrelevant. As only
Vodafone provides mobile network at cheap rate thus the customer belong from these sector are
not affect when the price of these products are change.
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Theses factors are relevant and directly impact on the changes in the demand of customers. All
these are essential as on the basis of that organization able to find out cause which directly
impact or influence Sumter and on the basis of that management department formulate their
business policies which help in attain competitive business advantage (Kraus and Strömsten,
2016).
Pricing policy use by Vodafone: This organization use different kinds of pricing
strategies for different sector of target market. By using pricing strategies they able to maintain
their position within the market environment. Management department of Vodafone need to
formulate or use competitive marketing price strategies for urban or semi urban area. They on the
basis of identifying price policy of their rival industries in case of telecommunication, network m
broadband or mobile networking area formulate tor took decision regarding their price of
products. Their price are comparatively low as compare to Airtel or other telecom companies.
Vodafone basically need to focus on enhance heir quality of products and service on the basis of
that they can able to gain their target market customers. Hey need to use strategies in which they
can able to attract their viscometers by offering best kind of services to their customers.
Vodafone use price penetration strategy for their rural market customer. On the basis of
using this strategies they can able to generate revenue by focusing on particular target market
group of customers. They focus on their African countries or Mid Asian market where they
initial provides rate service to their customers on the basis of that they attract or gain market
customer and the market set price of their product has been increase.
Vodafone for maintain their potential customer group need to use post paid or prepaid
offer which help in relation their customers. Theses strategies useful for Vodafone to achieve
their business goals.
CONCLUSION
From the above analysis it has been concluded that market has been directly influence by
the factors of demand and supply. Theses includes price, preference of customers, income
statement, and the group of society from which customer belongs from or impact of changes in
he price of substitute or complementary products. Vodafone's price of telecommunication
network, mobile network, its broadband and digital networking has been influence by these
factors. Due to the impact of these factor the demand of relevant product has been change or
curve shift from right to left. Most of product demand are inelastic how ever due to the economic
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condition impact of other factors are elastic. Management department to attain or generate
revenue use different pricing strategies , price penetration, or competitive they for different are of
target market, through which thy can able to achieve their goals by maintain sustainability with
the market.
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REFERENCES
Books and journals
Kerl, A., 2018. Development of an Innovation Ecosystem in a Fast-Paced Economic
Environment: The Case of the Vodafone Open Innovation Program. In Entrepreneurial,
Innovative and Sustainable Ecosystems (pp. 305-321). Springer, Cham.
Khan, S.S. and Suhaib, M., 2019. Evaluating an International Human Resource Management
Strategy for New Telecommunication Group in Developing Countries, Concentrating on
Pakistan (A Case Study of Vodafone). Science International-Lahore, 31(3), pp.457-461.
Kruis, A. M. and Sneller, L., 2018. Business Continuity Management put to the test: a drama in
two acts. Journal of Information Technology Teaching Cases, 8(1), pp.24-28.
Altamirano, M.A. and van Beers, C.P., 2018. Frugal innovations in technological and
institutional infrastructure: Impact of mobile phone technology on productivity, public
service provision and inclusiveness. The European Journal of Development
Research, 30(1), pp.84-107.
Masoud, E. Y., 2020. The Effect of Service Quality on Customers' Satisfaction in Mobile Phone
Services in the UAE. Transnational Marketing Journal (TMJ), 8(1), pp.75-94.
Kraus, K. and Strömsten, T., 2016. Internal/inter-firm control dynamics and power—A case
study of the Ericsson-Vodafone relationship. Management Accounting Research, 33,
pp.61-72.
Potnis, D., 2016. Culture’s consequences: Economic barriers to owning mobile phones
experienced by women in India. Telematics and Informatics, 33(2), pp.356-369.
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