Vodafone Business Strategy Report

This report analyzes Vodafone's business strategy using various frameworks like PESTLE, VRIO, Porter's Five Forces, and Bowman's Strategy Clock. It examines the impact of the macro environment, internal capabilities, competitive landscape, and strategic options available to Vodafone. The report concludes with a strategic management plan for Vodafone to maintain its market leadership and achieve sustainable growth.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. The impact and influence of the macro environment in Vodafone and business strategies. 1
(M1): Critically analysing the macro environment ....................................................................3
TASK 2............................................................................................................................................4
P2. I)Assessment of the organization's internal environment and its capabilities:.....................4
(M2): Critically evaluating the strengths and weakness ...........................................................6
TASK 3............................................................................................................................................6
(P3) Evaluation of competitiveness of Vodafone by Porter's five forces model........................6
(M3) Devising appropriate strategies to improve competitive edges and market position.........8
TASK 4............................................................................................................................................8
P4 Strategic Direction and options available for Vodafone ; Bowman's Strategy Clock Model8
M4 Strategic Management Plan For Vodafone.........................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy is a plan of every organization that helps to achieve its mission, vision,
objects, policies, goals, targets. Every organisation has its own business strategy (Scholes, 2015).
Vodafone is the largest organisation in telecom sectors. It provides the fastest network service at
lower cost. Firstly the report will discuss about the impact and influence of macro environment
on Vodafone business strategy with the help of PESTLE model and Ansoff's vector matrix. After
this explanation of internal environment and organisation capabilities of Vodafone with applying
the VRIO model and explanation of strengths and weaknesses of Vodafone will discuss. In the
next step the report will describe the competitive market of Vodafone by using the Porter's five
forces model. This model will help to find out different Vodafone competitors. And in the last
the report will discuss Bowman's strategy clock model to analyse the strategic direction and
available option for Vodafone.
TASK 1
P1. The impact and influence of the macro environment in Vodafone and business strategies
There are positive or negative impacts of macro environment in Mobile
telecommunication sector. Below explanation of the macro environment in Vodafone with the
help of PESTLE model.
PESTLE model
 Political Factors: It defines that how government policy influence the economy of every
organization Policies like- government policies, trading policy, taxation policy, import-
export policies influenced organization (PESTLE Analysis Vodafone Company Essay,
2018). Every new government comes with different policies. Organisations have
awareness about the new government policies. Which influence them and prepare their
market policies according to government policy.
 Economic Factors: Economic factor impact the economy and performance of the
organization, which related to profitability of the organizations. Yearly employment or
unemployment rates, foreign market rates etc. all are including in this factor. Mobile
telecommunication yearly turnover influenced by economic factor. Minimum call rates
and maximum numbers of users make strong economic bone of the mobile
telecommunication sector.
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 Social Factors: This factor impacts the social environment. Mobile telecommunication
plays an important role in social relations. Social factor helpful in gathering the data of
users. Needs and wants of existing customers. Launching of 4G networks in most of the
countries is a big achievement of Mobile telecommunication (Meskendahl, 2010). 4G
network service result is that users waiting for a new generation cellular network. People
receive instant information from one place to other place.
 Technological Factors: An organisation can not run without the help of technology. 4G
innovation is the result of technology. For the market suitability, Vodafone has to provide
its internet services everywhere to users. High-speed internet connection, voice chat,
SMS services, video calls, smartphones all are innovation of Vodafone. Different-
different business app on smartphone makes business more easy. Wallet on phone, backs
details app, online shopping are the results of technology. Technology improvement
shows the result of better innovation
 Legal Factors: Legal factors make impact on organisations. Some issues with
government policies for telecom sector, market environment and users. Import-export of
products and services on international level is big challenge (Astrachan, 2010). Mobile
telecommunication has to follow the law of those countries where its provides products
and services. Government rules change as market change so Vodafone has to run
business to rules.
 Environmental Factors: Environmental factors like changing climate, weather, and
global issues all impact the services of Vodafone. In rainy season how Vodafone deliver
its products and services without any technical error. Vodafone must ensure its users that
they provide their services and products without any delay. Provide fast services without
error is a way to win the customers believe.
Ansoff's Growth Vector Matrix to analyse the Mobile telecommunication Strategy This
matrix gives brief idea about the market risk. Vodafone can increase his growth following the
below matrix:-
 Market Development: Market development mean find new market as well as develop
current market area. Vodafone has to explore its market to cover new users with
existing ones. Focus on different age group and provide products and services according
to their demand (Woodcock, Green and Starkey, 2011). Market development reduce the
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threats and increase the business opportunities. Vodafone use different-different market
segmentation like geographical, demographical and psychograpic segmentation. Target
different-different customers and provide its products and services to them.
 Market Penetration: Sell the same more product to the same market it's not easy. For
the Vodafone, it is challenge to sell same product in the same market with new market
strategy, it is easy to attract customers to purchase product. Launch the same more
product with new scheme like discount, exchange offer other promotional activities
make it easy. Vodafone has to decide that in which product investment further useful to
it. Target those people in the same market who cannot buy costly product, provide the
same product with warrantee scheme.
 Diversification: Diversification mean reducing market risk and expanding the market
size. For the company profit and expand the market, Mobile telecommunication must
adopt diversification (Naidoo, 2010). If Vodafone has another service and product for
the different customers in the different market, profit and loss of this market will not
affect its other services and products.
 Product Development: Product development means planning for selling different
products to same customers, so Vodafone network might introduce its products and
services with different-different schemes, less calling rate, high connectivity net
services, smartphones with new features at low prices, improvement in customer service
quality. Innovation of technology helpful to modify the product and services to compete
the competitors. Introduction of new product with new and attractive features and
technology make product and services more attractive.
(M1): Critically analysing the macro environment
Vodafone macro environment which is followed by PESTLE some time behave like barriers in
the organisation growth and market value. Vodafone's management has to take some those
decision which are not much good for organisation (Montgomery, 2011Peng). Management
decisions compromise with quality and quantity of the product and services. For retain the
market image and market share Vodafone has to frame such kind of strategy which useful to
achieve its goals and plans.
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TASK 2
P2. I)Assessment of the organization's internal environment and its capabilities:
Organization's employees, their behaviour, culture of the organization, management all
are build the internal environment of the organization.
Internal environment of Vodafone
 Employees: Employees of the organisation create the internal environment. Vodafone
employees play a great role in the success. Their Contribution in the organisation build a
clean organisation image. Vodafone employees also important for its. Employees makes
the Vodafone industrial image.
 Employee's Behaviour: Frequently changes in market condition, behaviour of the
employee's work as helper towards the problems. In the market Vodafone has big
competition. Its employee's attitude help it out to face market situation. Employee
positive behaviour, future market forecasting, show employees perception.
 Organisation Culture:Vodafone known for its services as well as culture (Boyer and
et.al., 2010). People who come from different-different religious work together under a
roof. It set an example that organisation's gates open for all. Two way communication
maintain the organisation culture.
 Management: Management of any organisation is work as a backbone. Vodafone
management do equally work for the all departments. Vodafone has more qualified
management team, which work according to their calibre.
All factors build the internal environment of the organisation. A healthy environment arise
positive work waves.
 Strategic capabilities: Organisation's make their strategic to the sustain in the market or
generate more revenue. Competition between the business for the customers, profit,
market value of the organisation create the need of strategic capability. It is the only a
method which focuses on the market position, assets, employees future strategy. In the
presence of competitors with the help of strategic capability management can measures
the growth of the organisation. Strategic capabilities elements are business assets, man-
power, machines, employees etc. Strategic value depend on annual data reports, market
study (Burlton, 2010). Strategic capabilities change with the business. Vodafone strategic
capabilities are related to technological innovation, finance planning for new innovations.
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Vodafone addressed by its current resources and ability as a largest player in network
services.
 VRIO MODEL: For the evaluation of company's resources VRIO model is useful. This
model is helpful to asses the internal environment of organisation. With the help of VRIO
we come to know internal situation of Vodafone like resources availability, improvement
area.
Value (V): If the available resources is not valuable it is outsources because these resources has
no value for us. Vodafone has some old machines those are not useful for the organisation,
should be outsourced because machines has no value for the organisation.
Rare(R): If the available resources has value but not rare available in the market organisation
easily competitive. E.g. Vodafone has such man-power which gas value but organisation can
work without them and it does not make any negative impact, organisation easily fire them.
Imitate(I): If the resources is valuable and rare but available at cheap cost to imitate the
resources, organisation has an advantage (Reinhardt and Stavins, 2010). Competitor imitates
these resources in the further. Vodafone has old machines those caring cost is nominal and
organisation may be require those machines in the future, organisation ready to bear caring cost.
Organisation(O): If the resources is valuable, rare and costly to imitate but organisation cannot
afford the bearing cost, it becomes costly for the organisation. Vodafone knows the value of
available resources but do not have specific space to carry them in that situation resources will be
become more costly to organisation.
Every organisation has some strengths as well as weaknesses. Here we discuss about
strengths and weaknesses of Vodafone. Vodafone known for its fast and largest internet service.
 Strengths: Strengths has two types: internal strengths and external strengths. Internal
strengths relates to internal structures of the organisation, man-power, tangible or in-
tangible assets, strong management, expected results etc. Wide network connection, high
revenue are the one strength factor of Vodafone. Vodafone has different market strategy.
Vodafone is a marketing landmark in telecom sector. People know the Vodafone by its
zoo zoo (Parnell and et.al., 2012). Vodafone has huge number of subscribers. Premium
cost customer service attract the user towards to Vodafone. Vodafone market strategy,
fast internet service, focus on target customers are the strengths of Vodafone.
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 Weakness: Vodafone's users numbers is drop down in few last years. Loosing number of
users in the main problem. Company core value impact the users. Losing market share in
some countries, which impact the performance in other countries. Brand valuation of
Vodafone is not good in the last few years. According to market study Vodafone
competitor has strong brand value. Because of internal conflict between management and
employees, they both cannot come on the same platform.
(M2): Critically evaluating the strengths and weakness
Vodafone internal strengths are its structure, man-power, strong management, expected
results etc. which able to capture more market. Talented employees enough to manage its market
core value. But internal weakness is a big challenge (Higgins, Omer, andhillips, 2015).Internal
conflict between management and other employee level is not a good sign for Vodafone growth.
TASK 3
(P3) Evaluation of competitiveness of Vodafone by Porter's five forces model.
Porter's five forces model is a scale of business competition. Porter's five forces also can
measure the Vodafone competition.
 Bargaining power of buyers: Telecom buyer has strong bargaining power. These kinds
of buyer able to reduce the cost of product. Vodafone has huge users market. So these
number of users can reduce the price of Vodafone service. Vodafone has such offer to its
customers which suits them. User has more other option and each buyer(user) is
important to the organization. Vodafone cannot afford the lose of an individual customer
at any cost. This ensures Vodafone continues with buyers to earn average competitive
returns. Buyer not ready to pay high price for the same service which provides by
competitor at nominal price. For the market sustainability Vodafone has to provide its
best services like high connectivity, minimum call rates, special package offer at
minimum price compare to competitors. Buyer always go with whom, who is give the
best service at lowest price.
 Bargaining power of suppliers: Suppliers try to drive up price. There is numbers of
suppliers , uniqueness of their product and service, strengths of suppliers service and
product. Vodafone's suppliers have high bargaining because of its large market
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(Hoejmose and Millington, 2013). Vodafone easily afford the suppliers demand compare
to competitor. The reason of Vodafone profit is that it maintain suppliers low price.
Suppliers ready to supply their service and product to Vodafone because of its huge
number of user, market value, more profit margins compare to others. Vodafone market
strategy ensure its suppliers that market price will not go down, that's mean Vodafone
easily cover its market profit. According to telecom market study Vodafone is high
service provider in the most of the countries. Users believe, high profit, market value are
the trust able factors for the Vodafone suppliers.
 Threats of new entrants: Telecom sector is a more profitable market. Profitable market
is a attractive market for new entrants. New entrants in the telecom sector are the threat
for the Vodafone. For the making more profit new entrants provide their products and
services at very lower cost compare to existing competitors. But the entry of new entrants
is not easy because of entry barriers. Barriers like high amount license fee, government
formalities to stabilized new company, networking price etc. Vodafone can fight with this
threat with maintain its high market value, maintain buyers believe, frequently change in
technology, offer new attractive scheme to customers. Sustain in the established market is
not cup of tea of every new entrants, so Vodafone has to take advantage of new entrants
initial stage and perform its best new market strategy to capture new customers market
(Scholes, 2015). Vodafone has to prepare such market strategy which become a threat to
the new entrants.
 Threats of substitute: Every product and service has its substitute in the market. Where
substitute available in a market, it increases the chances of users switch to other one.
Switch to other product and services is the result of increase current price of product and
service, substitute has attractive offers, high quality and quantity at lower price.
Substitute influence suppliers too. Vodafone faces a threat of substitute for the products
and services. E.g. Vodafone broadband service substitute of landlines phone services.
Video conference, orkut, twitter, email service are the substitute to Vodafone mobile
services. Vodafone has to provide fast connection service to overcome. Vodafone has
strong buyer market and believe, good profitability, good market share, so its does not
need to sale its product and services at down cost to retain the existing users. Vodafone's
threat of substitute is less compare to competitors.
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 Rivalry within the market: Competitors in the market is the driver of the market. For
the market sustainability competitors provides such kind of offer which effect the beauty
of the market. Rivalry is external elements of the organization. Vodafone has rivalry from
its existing competitors, Low call rate, attractive package of other offers like provide
much internet data at low cost, innovative technology products and services, which show
that Vodafone has to provide same kind of product and services to the users (Bharadwaj
and et.al., 2013). Vodafone has to fix its price of product and services after comparing the
competitors' product's price. Market competition decide which product will be appear in
the which market segment. After market competition study Vodafone plan its next market
strategy and launch its products and services according to study results. This study
helpful to Vodafone in profit making
(M3) Devising appropriate strategies to improve competitive edges and market position.
Expansion of market, how to acquire target users, attractive market strategy, is the Vodafone's
strategy to improve competition (Meskendahl, 2010). To improve market position Vodafone
required to expand its research and development department, which adopt new technologies to
develop modify products and services.
TASK 4
P4 Strategic Direction and options available for Vodafone ; Bowman's Strategy Clock Model
Bowman's Strategy Clock Model : This model enumerates two characteristics on the
basis of which product could be placed in the market that is price and perceived value in the
mind of consumer. Vodafone can choose an option available from Bowman's Strategic model
which would offer most strategic advantage (Bowman's Strategic Clock (Strategic Positioning),
2017). If Vodafone is able to understand these eight fundamental strategic positions, it will help
them to better analyse and evaluate its current strategy. Low Price / Low Added Value :- this might not be the most competitive position in this
model as prices are intentionally kept low in order to survive competition in market.
Customer's also perceive very little value as product is cheap and easily available. Low Price :- in this company is offering huge quantities and low prices. The margin of
profit is also very low (strachan, 2010). Production is cheap and fast based on economies
of scale. Many price wars are fought on this position.
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 Hybrid :- in this position company aims at providing unique product at lower prices.
They make sure that goods delivered are of greater values, generating immense benefits. Differentiation :- At this position product differentiation is occurring, providing very
good value to customer at a decent price and companies aim is to retain its customer's
making itself as a reliable and significant brand. Focused Differentiation :- this is the position for high end consumer who expect their
product to outclass and outshine others. Here products with high price and high value are
traded (Woodcock, Green and Starkey, 2011). It requires exquisite segmentation,
targeting and positioning in order capture the target market. Potential consumer's that buy
these product leads to huge profits. Risky High Margin :- at this position company charges higher prices for a product which
consumers perceive to be of low values. This causes significant amount of risk and in
long run positioning of that particular product is likely to fail as people would clearly
shift to other products in the same category with much less prices. Monopoly Pricing :- when a particular product is offered by only one company this leads
to monopoly pricing, as this product is unique and differentiated with no competition so
the monopolist is only determining its price and consumer only have the option of either
buying it at that price or not buying it. Loss Of Market Share :- this is not a very good position to be in for company as the
product offered is not considered to be of much value by the consumer. The consumer
here tends to avoid buying the product leading to loss of market share for the company.
Strategic Direction and Options available for Vodafone
Following are a few strategies Vodafone could follow on the basis of Bowman's Strategy Clock
Model :
 In order to combat competition from its competitors it can lower its prices to some extent
(Naidoo, 2010). This would result in more people opting for Vodafone in place of other
telecom service providers.
 It has a brilliant publicity icon in the form of Zoo Zoo which could be used regularly in
creative advertisements to ensure that people are connected to their service provider in
some way.
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 Vodafone can also make an exclusive plan for its high end consumers offering them
various services at finest of prices ensuring that they are catering to the needs of high end
consumers.
 Although Vodafone has emerged in recent times as a global broadband and
telecommunication service provider but it can surely work on its cloud services as well
along with internet of things. This would be a big step in diversification of services.
 Vodafone has maintained the highest market share with more than 50% people opting for
its 4G data services, it has to make sure now that the captured market share is maintained
by providing best services and look at areas where it could expand (Montgomery, 2011).
 It has to constantly make sure that it works towards better Branding of its calling plans,
that would enable people to know the difference between their telecom providers plans
and Vodafone's plans.
 There are ways it could attract new customers by initiating new plans for new customers,
something which is done in Asian countries regularly to attract new customers.
 It could combine two or three services leading to a package of deals for its customers and
those people who go for this pack could be charged a little less than what would have
been a normal charge for opting these services, this would enable their graph to rise in the
market (Peng, 2017).
M4 Strategic Management Plan For Vodafone
Vodafone has to establish a system where constant analysis is done of its plans in
comparison to other and needs to make sure that their marketing, branding, positioning and
communication strategies are above their competitors allowing them to excel in their market.
CONCLUSION
Vodafone has been a pioneer in communication services, from its inception with
providing pager services till its new age of high speed 4G services. While being an innovator it
has produced riveting ideas and revolutionized the way people perceive technology. Now in era
of stiff competition it needs to keep foot on the pedal and continuously strive to provide excellent
services at reasonable cost ensuring that people are always connected with them and their needs
are always met by one of the best telecommunication service in the world that is Vodafone.
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