Business Strategy Report: Analyzing Vodafone's Strategic Decisions

This report provides a comprehensive analysis of Vodafone's business strategy, examining the impact of the macro environment and the company's internal capabilities. The report begins with an introduction to business strategy and its importance, followed by an analysis of Vodafone's macro environment using the PESTLE model and strategic positioning using Ansoff's growth vector matrix. It then delves into Vodafone's internal environment, including its organizational capabilities and strategic capabilities, using the VRIO model for analysis. The report also assesses the competitive landscape of the telecommunications sector in the United Kingdom using Porter’s five forces model and concludes with an overview of Bowman’s strategy clock model and a strategic management plan. The report highlights Vodafone's strategies for market penetration, market development, product development, and diversification, along with strategic decisions. The analysis includes how Vodafone adapts to political, economic, social, technological, legal, and environmental factors. The report aims to provide a detailed understanding of Vodafone's strategic approach to maintain and improve its market position.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and influence the macro environment of Vodafone...................................................1
M1 Analysing macro environment and identifies strategic management decisions...................4
TASK 2............................................................................................................................................4
P2 Internal environment and organisation capabilities...............................................................4
M2 Strengths and weaknesses of firm's internal capabilities, structure and skill set .................7
TASK 3............................................................................................................................................7
P3 Porter’s five forces model......................................................................................................7
M3 Devising appropriate strategies to improve competitive edge and market position.............9
TASK 4............................................................................................................................................9
P4 Bowman’s strategy clock model............................................................................................9
M4 Strategic management plan.................................................................................................11
CONCLUSION..............................................................................................................................12
.......................................................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is long term action plan which is designed to accomplish specific goals
of objectives or goals. It is a method to bring regarding desired future like for an instance
solution of problem, achieving goals of firm etc. Strategy is helpful in achieving long term goals
in an effective as well as better manner. It is related with seeking of competitive advantage at
market place at business preferably than the corporate level. Competitive advantage is anything
which provides an organisation as comparison to to its strong competitors in order to attracting
the consumers as well as defensive itself (Ackermann and Audretsch, 2013). Under this,
company attract the consumers, strengthening performance, accomplish organisational aims and
compete successfully. This present report is based on Vodafone company. It deals in
telecommunication sector which main motive is to make improvement in services of small
market of United Kingdom. This firm operates its services in regions of Africa, Oceania, Asia
and Europe. It opearts its busienss in more than 50 countries. Under this report mentions about
affect as well as influence macro environment and also business strategies. ‘VRIO/VRIN’ model
will be discussed about identification strategic capabilities which are posses through company. In
given assignment, competitiveness of the telecommunication sector of United Kingdom through
using model of Porter’s five forces is going to discuss.
TASK 1
P1 Impact and influence the macro environment of Vodafone
External environment is combined of all those factors which affect business operation
from outside of an organisation. External environment of a company consists variety of different
factors which impact on performance as well as behaviour of an organisation. Action of all these
factors can be impact directly and indirectly (Alsoboa and Aldehayyat, 2013). Main factors
which impacts on business is competition degree.
1) PESTLE model for environmental analysis
Environment analysis is helpful in determining those factors which impact on business
negatively. It is a strategic tool to determine internal and external elements which affect
performance of company. There are several tools of environmental analysis which company
used. PESTLE analysis is used in business for gaining information regarding circumstances of
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firm. Management of Vodafone organisation conducts its business at international level. For
environment analysis PESTLE Analysis is given below as above:
Political factors- These type of factors take current political condition of country. Under
this political condition at international level impact on business (Bentley, Omer and Sharp,
2013). The political system of every country is different from each other. Then firm is
conducting its business in another country then there is a need to know about the political system
of another so that nay kind of hurdles can not impact of business. In context to Vodafone
telecommunication company, political factor impacting Vodafone consist Roaming Regulation
of European Union which aims to reduce usage of mobile phone charges by 70% and enhancing
level of customer rights.
Economical factors- It is related to environment under which finance or can say money
is concerned with those factors which impact on an economy as whole. It consists fluctuations,
exchanges rates, unemployment, inflation and many others. Vodafone Group Plc can be use
economic factor of country like for an instance inflation, growth rate and economic indicators of
customers like growth rate of telecommunication sector. Vodafone business firm analysing
economic factors which may be hinder its business operations in some of the target countries.
Social factors- In this modern era, tastes of consumers are changing day by day. It is a
responsibility of firm to determine needs of consumers and then produce effective quality of
goods in a better or efficient manner (Cadle, Paul and Turner, 2010). In regards to Vodafone,
management of this firm analysing social structures, religion, income level, education
backgrounds before marketing of its products as well as network operations of services to whole
market.
Technological factors- In this, technology impact on business in a positive manner. If
firm will adopt advanced technology then it can perform its business operations in a better or
easy manner and its performance will be increased. Vodafone operates its business operations in
more than 50 countries, so it uses innovative technology in its business for advancement. In
telecommunication sector, technology plays an important role and without it firm can not
perform in a better manner.
Legal factors- Legislations are changes time to time and these modifications impact on
business environment. In addition to this regulatory body set some rules of firm. Vodafone
company adopt as well as implement all kinds of legislation at workplace in order to run business
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successfully and legally. Before entering in other market, Vodafone company examine about the
legal system of that country.
Environment factors- Various markets have the different rules as well as norms which
can affect on profit level of company in those type of markets (Curwen, 2011). Before beginning
of new business as well as enter in other market, it is essential that company should determine all
environmental standards of those markets. The main aim to Vodafone is to reduce environmental
footprints which enable lees carbon, resources use and wastage. In order to reduce environment
challenges this firm rec9ognised as green brand in around 75% of developed markets.
2) Ansoff’s growth vector matrix
Strategic positioning is a kind of positioning of company in future while taking in an
account changing environment and systematic realization of positioning in a better manner.
Positioning strategy includes weaknesses as well as strengths of business firm, there is a need to
an organisation to determine requirements of consumers or market and also position of the strong
rivals. The main motive of positioning strategy which allows an organisation to particular field
where firm can compete with its strong competitors. In addition to this, Ansoff Matrix is
strategic planning technique which gives a structure to assess senior managers, marketers and
executives to devise the strategies for future development. This matrix is developed through
strategist Igor Ansoff in order to assess teams of management to focus on business development.
The Ansoff Matrix given below as above:
Market penetration- Under this, business firm tries to develop its current services or
products in its present markets (D'Aveni, Dagnino and Smith, 2010). It will be helpful in
enhance its market share in an existing market. It includes enhancing market share in existing
market and accomplish through selling more goods to manufacture consumers or searching new
consumers in exiting markets. It can be achieved through reduce cost of goods, enhance
distribution and promotion support etc.
Vodafone company use this strategy by launch its mobile related services under those
cities or countries in which it already operating its business functions. This firm launch its
existing goods in its current market.
Market development- In this, Vodafone tries to expand its new market which the help of
using existing services or goods. From this large number of consumers will be attracted and sales
of firm will also be maximised. Vodafone Firm used this kind of strategy for target new market
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with current goods. Vodafone business firm continue expand its brand in all over the world by
using this strategy. This company can expand its business in India and some of other European
countries.
Product development- Under this, main focus of this strategy on demands of existing
consumers which are present in market. Company creates new goods and launch at existing
market. On the basis of changing demands and needs of consumers, Vodafone firm provide
various services with unique quality. This firm also makes some modifications in existing
products and services and provide to consumers (E. Dobbs, 2014). It will be helpful in increasing
more market share of business. Product development is required when the consumer base of an
organisation is goods and market for its current goods has reach at the saturation point.
In context to product development, Vodafone launched new service which is “V by
Vodafone” which enable customer for connect the many home and also electronic items to
international IoT network group.
Diversification- Company develops through diversifying in new business with the help of
producing new goods for the new market segment in a better manner. With the help of this,
Vodafone company can increase its growth rate. This strategy is more risky because in this there
is a need of market as well as product development.
M1 Analysing macro environment and identifies strategic management decisions
Macro environment affects on business from outside. In macro environment, external
factors are includes and these are political, economical, social, technological, legal and social.
These factors can affect on the management decision of company. Strategic management
decisions are helpful in achieving long term goals of an organisation with in specific period of
time. In regards to this, it is a responsibility of manager of Vodafone company to determine all
these factors and then try to work on reducing their affect in an effective manner so that
company can perform its operations as well as activities effectively. From this, firm can take
effective decisions in favour of an organisation.
TASK 2
P2 Internal environment and organisation capabilities
Internal environment is composed of components with in a business firm consisting
management, corporate culture, staff members which explains regarding behaviour of employee
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at workplace. Internal factors affects on business from inside of an organisation and management
can control all these factors in a systematic and proper manner (Firnkorn and Müller, 2012). On
the other hand organisational capabilities refers to abilities of firm to manage the resources like
for an instance staff members, gain benefits over rivals etc. It is necessary that organisational
capabilities should focus on ability of company in order to meeting demand of consumers in an
effective way.
1) Strategic capability
Strategic capability is ability of business to employ successfully the competitive
strategies which permits to survive as well as enhance value over period of time. The capabilities
are necessary to manage all necessary resources in an organisation in a better manner. It consists
resources, skills, set of core competencies which can provide long term competitive benefits for
business firm in better manner. In context to working with framework of strategic management,
capable staff member's give their better contribution in achieving aims of firm. Competitive
position of a business firm is enabled through its competencies in context to perform at high
level in different manner (Grover and Kohli, 2013). If organisational capabilities will be goods
then firm can achieve its aims and objectives with in specific period of time. In addition to this,
capabilities are cross- functional as well as collective. If firm will have good strategic
capabilities, then in this case company can determine needs of consumers and try to fulfil them
in an effective as well as better manner.
2) ‘VRIO/VRIN’ model
‘VRIO is framework of business analysis which forms part of strategic scheme of an
organisation. In order to understand competitive advantage sources, Vodafone using this tool.
VRIO tool falls internal analysis and also examining all capabilities as well as resources of an
organisation. The existing business strategy of Vodafone is to develop business by geographic
expansion, sustain current consumers, acquisition of the new consumers, enhancing usage with
the help of innovation technology. In addition to this, business strategy as well as its
sustainability strategy of Vodafone are inseparable. The main aim of Vodafone is to determine
ion those areas which can be sustainable in a most effective manner. On the other hand, VRIO
analysis is an effective analytical technique for an evaluation of resources of an organisation and
also its competitive benefits (Johnson, 2016). VRIO expands for Value, Rareness,
Imitability,Organization. It is helpful in analyse those resources which can fulfil criteria of firm.
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This model was developed through Jay B. Barney to evaluating resources of firm. The VRIO
model is mention below as above:
Valuable- Under this, designers and engineers are more necessary to the success of an
organisation. The resources add some value through enabling an organisation to exploit effective
opportunities against any threats. Resources are more valuable for an organisation and helpful in
enhancing value of consumers. It is done through maximisation of differentiation and also
reducing cost of goods. Those resources which can not be meet with this kind of condition , lead
to competitive disadvantage.
Rare- Under this, resources which can only acquired through one or some organisations
are included one. Valuable as well as rare resources grant the temporary benefits. Competition is
more in telecommunication sector so there is a requirement to Vodafone organisation to provide
training or development to staff members for increasing their working capabilities. In context to
manage risk in better manner, there is a need to Vodafone firm to hire more experienced
professionals (Kernbach, Eppler and Bresciani, 2015).
Imitability- Some of the necessary resources like for an instance capabilities of specific
company can imitated through some other firms whose originality of products is minimum.
Companies with the rare capabilities and resources are difficult to imitate through some other
companies fain some of the competitive advantage at market place. Vodafone has an effective
technology through which it can produce its innovative products and can also helpful in
providing any effective resources. This technology is not use or implement by any firm before.
Organisation- IT is last step in VRIO analysis. It needs identifying rarity, imitability and
value. If all resources has been passed all these three then in this case firm can be organized its
activities in an effective manner. It consists formal reporting structure of firm, compensation
policies and management control systems which decide organising firms in a better manner.
3) Organisation’s strengths and weaknesses
Strengths are capabilities of firm and weaknesses is limitation. It is necessary for an
organisation to overcome from its weaknesses (Klettner, Clarke and Boersma, 2014). Strengths
and weaknesses of Vodafone given below as above:
Strengths
 Leadership position of Vodafone is strong at market place. It is more popular business
firm which gives telecommunication services to large number of people.
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 This company has more than 1000,000 staff members in all over world. Vodafone
organisation provides many unique services to people such as mobile telephony, landlines
and digital TV related services.
 In addition to this,Vodafone organisation has large geographical reach and also its
infrastructure network is regarded to highly developed.
 The advertisement of this firm is strong with the concept of ZooZoo very popular.
 This firm is also provides diverse services such as mHealth services, different payment
options (m-Pesa) and many other services.
 Offers many different services like for an instance music, movies etc. by different
applications of Vodafone (Li, Zhoau and Si, 2010).
Weaknesses
 Vodafone firm constantly fight for the market share with its strong rivals because of price
wars.
 Being, Vodafone is a strong brand and comes in constant vigilance from its international
authorities.
 This organisation has large number of stores and it offers many different services to
people but fails to give services to those people which are living far from off areas of
country.
 Because of economical situations and Brexit in Europe, performance of Vodafone is not
good or poor.
M2 Strengths and weaknesses of firm's internal capabilities, structure and skill set
Strengths is beneficial for an organisation but weaknesses is not good for business of
company. In addition to Vodafone organisation, manager of this firm conduct SWOT analysis to
determine strengths and limitations of business. If the capabilities of firm will be good then it
will be considered as strengths of firm. It is essential that company should make improvement in
its organisational structure, skills as well as capabilities in an effective as well as proper manner
(Pagani, 2013). The internal capabilities of Vodafone is effective or attractive promotional
strategies from which people attracted and buy its services. On the other hand the staff members
of this firm are very talented and have good knowledge, it is another internal capability.
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TASK 3
P3 Porter’s five forces model
It is considered as an effective tool which is used to analyse and evaluate the forces
which increases competition within an industry. It will help organisation to make an effective
strategy and plans in order to compete with various complex situation that may arises due to
environment which are contingent and complex in nature. Therefore in order to compete with
their competitors the company must required to make changes in their services and pricing
policies in order to attract the interest and buying decision of large number of customers.
Through this, the company can successfully achieve competitive advantage and sustain in
telecom industry for longer period of time and generate huge revenues as well. It includes five
forces which are briefly described as below:
Bargaining Power of Suppliers: The suppliers of the telecom industry are strong instead
of that the company are operated with huge profits. Vodafone as a cost leader generates huge
revenue as compared to their competitors which help them in adjusting the prices increases by
their suppliers more easier than their rivals (Porter, 2011). As a big company, Vodafone has
power to control cost increases by suppliers due to which they can provide services to their
customers at an effective prices and earn regular profits as well. In order to attain huge customer
strength, it is important for Vodafone to control or reduce increment in prices or select such
suppliers who agreed to provide them services at less prices as compared to other suppliers.
Bargaining power of Buyers: The customers in the telecom industry are also high due to
high competition and lack of differentiated products. As the customers have different option to
get telecom services from various companies engaged in providing telecom services therefore
customers prefer to use services of such companies who charges less than their rivals thus this
will minimises the cost prices of telecom company. As Vodafone in order to maintain their
existing customer strengths and strong position among competitors, they should adopt an
effective pricing polices which will maximises the interest and satisfaction of customers.
Threats of new entrants: There are lots of barriers which restricts new companies to
enter into telecom industry thus the threat of new market entrant is low. As the company ho
wants to enter into such industry should required to pay huge licensing fees and regulatory issues
hat are attached with such industry. Similar wise, the cost of establishing network infrastructure
are high and frequent changes in technology brings more challenges and difficulties to new
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companies to enter and compete with the existing rivals (Scholes, 2015). However, Vodafone
can able to compete with their rivals in more effective and efficient manner through improving
their efficiency of their services which cannot be provided by their rivals.
Threats of Substitutes- Vodafone company faces considerable threat for services and
products. CDMA and also landlines both are at declining services but demands of its broadband
is more. At marketplace, there are many organisation which deal in telecommunication sectors
and are major competitors of Vodafone. When new services or goods meet with same needs of
consumers in various ways (Sluyterman, 2013). The threat of substitute services or goods is more
in case if it gives value proposition which is varied from existing offerings of an industry. In
addition to this substitute goods pose to profitability of telecommunication sector based on
relative ratio of price- to- performance of various kinds of services of goods to large number of
consumers in order to satisfying their wants and preferences. Threat of substitution is impacted
through the switching costs. Because of strong purchasing power as well as efficient scale of
economies, Vodafone company does not require to pass down prices which are attributes towards
substitution to customers.
Rivalry within market- At marketplace, there are many strong competitors of Vodafone
in this competitive market (Srdjevic, Bajcetic and Srdjevic, 2012). In context to this, Vodafone
firm faces high competitors from its strong competitors because of minimum call rate cost which
are charged through closest rivals. If at marketplace, there is high competition then in this case
Vodafone firm reduce its cost and it will be helpful in increasing profit level of business.
Vodafone Group Plc organisation operates is business in competitive Wireless Communications
sector. Vodafone firm can compete with its competitors through collaborating them in order to
enhance size of market instead of that competing for the small size market. In context to this,
Vodafone business firm make regular changes in its current products and services to enhance its
sales in an effective manner.
These all are the Porter's five forces and through analysing all these competitive forces,
Vodafone business firm develop its effective strategies to gain competitive advantage. It will be
helpful in gaining more profitability to Vodafone telecommunication organisation.
M3 Devising appropriate strategies to improve competitive edge and market position
Devise is a form in mind through the new combinations of ideas as well as principles. It
is a responsibility of management to make improvement in its competitive edge so that it can
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