Business Strategy Analysis for Vodafone: A Detailed Report

This report offers a comprehensive analysis of Vodafone's business strategy, examining its macro and micro environments. The report begins with an introduction to business strategy and then delves into the application of the PESTEL framework to analyze the impact of the macro environment, including political, economic, social, technological, environmental, and legal factors on Vodafone's operations. Ansoff's growth vector matrix is utilized to assess the company's strategic positioning, exploring market penetration, product development, market development, and diversification strategies. The internal environment and capabilities are evaluated using SWOT and VRIO models to assess strengths, weaknesses, opportunities, and threats, as well as the value, rarity, imitability, and organization of Vodafone's resources. Porter's Five Forces model is applied to evaluate the competitive forces within the telecommunications industry. Finally, Bowman's Strategic Clock is used to analyze Vodafone's strategic positioning and competitive advantage. The report concludes with a summary of findings and recommendations.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies...............................................................1
TASK 2 ...........................................................................................................................................4
P 2 Analyse the internal environment and capabilities................................................................4
TASK 3............................................................................................................................................7
P 3 Porter’s Five Forces model evaluate the competitive forces ................................................7
TASK 4..........................................................................................................................................10
P4 Applying a range of theories, concepts and models.............................................................10
Bowman’s Strategic Clock .......................................................................................................10
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy denotes the actions which are taken by the management in order to
achieve the organisational goals and objectives. It involves plans and policies which are used by
organisation to secure a competitive position in the market. The management of corporation is
responsible to make effective plans and strategy which support the business growth and help it to
get success in so that maximum profits can be generated. The main aim of this report is to make
strategy for the growth of business. To better understand this concept Vodafone has been chosen
which is a British multinational telecommunication company and established in United
Kingdom. There are various topics are covered in this report such as: PESTEL analysis, ansoff's
growth vector matrix to analyse the organisation's strategic positioning, to analyse internal
environment VRIO model has been used and strength & weakness of organisation has been
analysed. Apart from this porter's five force model has discussed in order to evaluate competitive
forces and Bowman's strategy clock model.
TASK 1
P 1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies.
To analyse the environment is important for the business growth and business strategies
have to be made after proper analysis. A macro environment is the condition which exist in the
economy as a whole rather than a specific area or location. It involves monetary policy, gross
domestic product, employment, inflation etc. To analyse the macro environment PESTEL is
useful and manager of Vodafone can use this so that proper strategies can be made which support
the growth of company (Ghezzi, 2013).
Political factor: The business of Vodafone can be affected if this factor does not analyse
properly and it includes government rules, compliances, policies etc. The government policies of
different countries can influence the business operations of corporation. As the rules which are
made by government for telecom companies in UK are needed to be follow and the business of
organisation has spread in various nations across the globe. The management of corporation is
responsible to make effective strategies after analysing the political factor so that business of
sustain for a long term. As Vodafone operates its business at various countries such as: UK,
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India, England etc so it is important for it to analyse the policies which are made by political
parties so that its business does not affact.
Economic factor: If this factor does not analyse properly than it can affect the
performance of company. It includes interest rate, economic growth, inflation foreign exchange
rate etc. To sustain in the market it is essential for Vodafone to set the prices of recharge plan
according to the inflation rate. If inflation rate will increase in United Kingdom than purchasing
power of people can affect as a result sales of organisation can reduce (Grover and Kohli, 2013).
Inflation rate of a specific nation is require to be analyse otherwise business performance can
affect.
Social factor: It is required for Vodafone to analyse this factor and it involves age group,
income level, habits, preferences etc. It is important for the management to take effective
decisions which contribute in the growth of company. As Vodafone introduce the recharge plans
for all age group as per the requirement. As an example to attract the youngsters and children it
introduce special pack in which corporation provide more data so that they can use internet.
Because most of the youngsters have spend their time in social media so they need more data. So
this factor can positively impact the growth of organisation. For Vodafone it is require to
develops its data products which can fulfil the needs of society so that business of company can
grow.
Technological factor: To get success in the organisation technology plays an vital role
and without it the growth of company can be restrict. As the consumers of United Kingdom has
more concern about technology and to fulfil the requirement of people it provide fast services
which is helpful for the individuals to access the internet without buffering and they get high
speed data. To compete in the market it is require for the organisation to use the technology and
satisfy the needs of persons by delivering quality services. As management of Vodafone is
planning to make strategies to launch 5G services so that it can grab more market share and
increase the profits by providing quality services. If this factor is properly analyse and innovative
technology is being used than business will grow.
Environmental factor: To analyse this factor is essential for the Vodafone so that it can
survive for a long term in the market. It involves: climate & weather. There are various laws
which are implemented by the government of United Kingdom in context to the telecom
companies. As the mobile tower brings the radiation rays which are harmful for the human being
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as well as climate of the country. As government of UK has made rules in this regard which are
needed to be follow by the organisation (Hoejmose and Millington, 2013). It is important for
company to follow the environmental law so that it can operates its business effectively.
Legal factor: It is important for the Vodafone to consider this factor and there are
various rules and regulations which are made regarding it. As the management of company have
to follow the laws of intellectual property and data protection laws in order to protect the ideas &
patents of organisation. If corporation does not consider this factor than its business operations
can be affect and negatively influence the business activities of company. So it is important for
the management to analyse the macro environment factors so that business of organisation can
grow and get success and it affect the firm and its operations positively (Morgan, 2012). Legal
rules and compliances of different nations are required to be analyse so that business does not get
affected.
So it is important for the organisation to consider this factor so that effective decisions
can be taken which is helpful to achieve the objectives of company and by analysing this factor
business can grow.
Ansoff's growth vector matrix
This tool has been used by the organisation for deriving effective strategic direction and
positioning which support the growth. This model has divided into four parts which associated to
markets and service. It is important for the management of Vodafone to make proper strategies
which help in positioning of the company.
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Illustration 1: (Source: Ansoff's growth vector matrix, 2019)
Market development: This specific strategy suggest that Vodafone can launch its
existing products in different market. As company can provide its telecommunication services to
those areas which are untapped such as rural areas of India. This strategy help the organisation in
positioning as a result profits can be maximize (Purce, 2014).
Market penetration: As per this strategy, company will emphasis to capture higher
market share by increasing sales of its existing products. As Vodafone can make expansion in
Indian market by using aggressive marketing strategies and spend funds in promotional
activities.
Product development: As per this strategy company can provided new services which is
5G to the people of United Kingdom. It is helpful to increase the portfolio of company and make
it valuable and it help Vodafone to maximize the profits and grab higher market share.
Diversification: This strategy will be more risky in which company launch new products
in the new market. It does not easy to analyse the market condition, culture, income level,
preferences of people who lives in different nations. As Vodafone try to launch 5G services with
unlimited data pack and voice calling facilities in Europe and it require huge amount of
investment (Ghemawat, 2016).
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With the help of Ansoff's model company can make better strategies which provide help
it to sustain in competitive environment and it is beneficial for the organisation to earn more
profits so that it can expand its business and achieve its objectives. As current strategic position
is not sufficient because there are various competitors who perform better in the market so it is
required for Vodafone to make better strategies support the future growth and its market position
can be improve.
TASK 2
P 2 Analyse the internal environment and capabilities
Internal environment: It is a composition of several elements which are present in the
organisation and needs proper focus of the managers as well as top authorities for the purpose of
eliminating the impact they have towards the business. Several tools and techniques are been
formulated for carefully analysing and managing the internal environment. One of the tool is
SWOT analysis. The description is as follows:
SWOT Analysis: It is an useful business tool which helps the managers to analyse
strengths, weaknesses, opportunities along with threats of the organisation. Strengths and
weaknesses helps the organisation to understand the internal aspects where as opportunities and
threats are helpful in focusing the conditions pertaining in the outside world. Such analysis is
required to accept the challenges and face them by determining the available opportunities on the
basis of the strengths capitalization. Strength and weaknesses of Vodafone is as follows:
Strengths Weaknesses
1. Vodafone has covered the massive
market share in the wide distribution of
network coverage (Scholes, 2015).
2. The organisation uses various
marketing techniques to attract and
retain its maximum clients.
3. It penetrates the market by
differentiating its services which helps
in generating more revenues.
4. The organisation is successful in
5. The subscriber base of the selected
business are falling due to some
internal reasons.
6. Such entity is required to strengthen the
values by formulating as well as
implementing strategies to attract and
acquire its clients.
7. The brand valuation has also seen
drastic changes.
8. Due to economical conditions,
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building its image in the competitive
market. The brand evaluation, brand
recall and brand equity are too high.
performance of the firm has reduced.
9. The marketers spends enough amount
on research and development activities
which leads to decrease the monetary
resources of the business.
VRIO/VRIN model: It is a framework which is used by various organisations for
analysing the internal capabilities. The selected model is propounded by Jay B. Barney. Such
tool is used by the managers of Vodafone for the purpose of evaluating the organisation’s
internal environment and its capabilities. It consists of four different aspects such as valuable,
rare, inimitable and organised. All these aspects are clearly assessed by the managers in
appropriate manner (Smith, 2013). The VRIO model analysis of Vodafone is as follows:
Illustration: VRIO Model, 2016
Capabilities Valuable Rare Inimitable Organised
Research and ✔ ✗ ✗ ✗
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development skills
Human resources ✔ ✔ ✗ ✗
Market share ✔ ✔ ✔ ✗
Patent ✔ ✔ ✔ ✔
Valuable: the analysis shows that the research and development activities are highly
valued as these are highly differentiated from the competitors. It further shows that the human
resource is the highly valued as they are the important components of the organisation. Major
proportion of human resources are developed and trained in the specialisation for performing
tasks which provides more productive outputs. They are loyal as well as committed towards
work which ensures that the retention level is high of the business selected. As per the analysis,
patents are also highly valued because they helps the organisation to sell their products as well as
services without competitors interference. Patents provides greater revenue as well as market
share. The organisation get their patents renew and licensed to provide unique and patented
products only. The market share is also a valuable element for the business as they helps in
attracting major proportion of market share by attracting and retaining the customers by
satisfying their demands according to the requirements. All such elements considered as the
valuable aspects as they are important to conduct operational activities in effective as well as
appropriate manner. They all pursue high value other than competitors because of differentiated
products (Wang and Verma, 2012). As an example, company can develop those products which
provide value so that needs of consumers can satisfy and it can earn higher profits.
Rare: The research and development activities are not rare because there are several
competitors who uses such strategies in the marketing for providing products and services. This
ensures that research and development activities are in competitive parity. Human resources are
rare as identified with the helps of analysis. Market share is rare as it retained and attracted
maximum proportion of market share. The patents are also rare as these are not easily available
with the competitors.
Inimitable: the human resources are costly to inimitable as such resources are acquired
by Vodafone through prolonged profits as well as by putting higher efforts for the purpose of
recruiting, hiring, and training various employees. The business invests to develop the skills.
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Market share are difficult to inimitable as to maintain the market share for longer period is a very
difficult task for the company. Any mistake by the marketers leads to cause great harm to the
product quality in the market place. The patents are also difficult to imitate because the
managers of selected firm are not legally allowed for in imitating the patented product. Various
resources are been formulated and implemented to get the patent rights which is a costly
procedure.
Organised: the market share of the Vodafone is not organised as per the VRIO analysis
due to providing same products on low prices. Such aspect can be used by other firms to capture
the market area. The patents are organised as it requires huge investments to get the patent right
and organisation is using them according to full potentiality. The sustainable competitive
advantage helps the firm to get their patents renew before their expiration (Reich and Benbasat,
2013).
TASK 3
P 3 Porter’s Five Forces model evaluate the competitive forces
To analyse the competitive forces Porter's five force model is useful and help the
company to make effective strategies which is beneficial for the successful. It is required for the
corporation to make proper planning and set the goal as per its objectives. For Vodafone it is
important to take better decisions which help it to make higher profits and expand the business.
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Illustratio
n 2: (Source: Porter’s Five Forces model, 2019)
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