Vodafone Business Strategy: Macro and Internal Environment Analysis

This report provides a comprehensive analysis of Vodafone's business strategy. It begins with an introduction to business strategy and its importance, followed by an examination of the macro environment using PESTLE analysis, assessing political, economic, social, technological, legal, and environmental factors influencing Vodafone's operations. The report then delves into the internal environment, utilizing VRIO analysis to evaluate Vodafone's strategic capabilities, strengths, and weaknesses. Furthermore, it explores the competitiveness of the telecommunication sector and applies Ansoff's growth matrix to identify strategic directions and options available to Vodafone, concluding with a summary of key findings and recommendations. The report aims to provide a clear understanding of Vodafone's strategic positioning and future prospects within the competitive telecommunications industry.

Business Strategy

Contents
INTRODUCTION...............................................................................................................................4
TASK 1.................................................................................................................................................4
Macro environment and its influence on activities of business organisation and its strategies..........4
TASK 2.................................................................................................................................................7
Analysis of internal environment of company...................................................................................7
TASK 3.................................................................................................................................................9
Examine the competitiveness of telecommunication sector...............................................................9
TASK 4...............................................................................................................................................11
Strategic directions and options available to enterprise...................................................................11
CONCLUSION..................................................................................................................................12
REFERENCES........................................................................................................................................13

INTRODUCTION
Business strategy is referred to a long-term planning through which company easily
attaining their set goals and objectives in appropriate time frame. Basically, strategy is related
with action that taken by the company to enhance their overall performance level. Along with
this, it also defines the way to operate business activities in systematic way which helps in
enhancing the chances of attaining competitive advantage in market place. With the help of
this management got better guidance to perform entire activities in effective manner (Chu,
KrishnaKumar and Khosla, 2014) In addition of this, formulating effective business strategies
helps in handling all the actions and at the same time also reduce the chances of arising issues
and conflicts within the company. This will directly contribute in enhancing the performance
level of the company in an appropriate way. Present report is based on Vodafone, is a mobile
telecommunication company which operate their business in Europe, US and Africa as well.
As a biggest and leading telecommunication firm offer better services to its customers.
Different factors of business environment also impact on business strategy is mentioned in
this project. Along with this, competitiveness of telecommunication industry is also
discussed in this project which may leads in enhancing the chances of attaining success.
TASK 1
Macro environment and its influence on activities of business organisation and its strategies
Macro environment is use to define those factors that exist outside the organisation and
largely affect its activities and decision-making process. Identification and analysis of
external elements is very essential as this support manager in formulate better strategies
which ensure effective implementation of business operations. Political, legal, social,
economic, environmental and technology is all are come under the macro environment.
Impact of all these elements on functioning and strategy of Vodafone is given in the
following points:
PESTLE analysis:
This is one of the most popular and effective tools use by business firms to examine
the external forces in order to take better decision. As Vodafone operate in various areas of
world and offer different type of services to all its customers. So before expand its operations

in new areas it is very important for organisation to undertake a study related with external
forces of that country.
Political factors: This aspect help in determine the government and its various rules
exist in a specific country. It is very important for Vodafone to examine this because approval
of government is very essential before set up a new plant in a country. Political conditions
exist in country largely affect the activities of business firms. Further various relevant factors
such as peace of state, political instability and many more all affect the growth of company.
Economic factors: This is one of the most significant factor that require to be analyse
by entities because this directly impact on profits of company. Mainly this aspect covers the
inflation rate, deflation rate, currency rate and GDP of a specific country. Good GDP indicate
high purchasing power of individual and this increase the success chances of entity’s product.
Movement in economic conditions of country directly affect the profits of firm so this require
to be examine by Vodafone.
Social factors: This element of macro environment indicate the lifestyle, hobbies,
language, culture and behaviour of local people living in the area in which entity operate or
wants to operate. Study of this element increase knowledge of managers about the attitudes
and behaviour of individuals. This help in manufacture product as per the specific
requirements of customers and results in customer satisfaction. In this way, entity can retain
its customers for a long time period.
Technological factors: In today’s business environment when an organisation use
updated technology then it helps in attract more customers and provide support to respond to
the changes that take place in business environment. As Vodafone is known for offer better
and effective products to all its customers so to maintain its market share, it is very essential
for entity to use the new and updated technology. With this, organisation can utilise the
opportunities exist in market and can generate more number of profits.
Legal factors: This is another significant element of external environment. Mainly this
indicate the laws and regulations introduce by legal bodies in order to get a control over
business operations of enterprises (Yuliansyah, Rammal and Rose, 2016). It help in monitor
and measure the actions taken by commercial firms to serve its customers. When firm does
not follow the rules then it either results in penalty or legal action. Vodafone face a issue that
it does not give much consideration to needs and wants of its staff members and this is the
main reason why large number of workers are leaving the organisation. For improve this

situation, entity require to introduce some changes in its product and should focus more on
needs of its staff members. It is very important that healthy and positive working
environment should be offer to employees so they can work well. In order to maintain its
positive image and to enhance its goodwill, it is very essential for Vodafone to take business
decision as per the laws and regulations exist in that country.
Environmental factors: In today’s business environment, customers are become more
aware about various issues and safety of environment is one of it. Entities who consider this
element before take business decision attract more customers towards its products and
services. Further this help in create and maintain a positive image in market that offer large
number of long term benefits to entity.
All these are the major factors of external environment that affect the actions and
decisions of a business entity. By examine these factors, Vodafone can ensure effective
expansion of all its commercial activities in new areas and at the same time can attain its set
goal and objective. In addition to this, entity can achieve optimum utilisation of business
resources as this bring efficiency in business process.
Ansoff’s growth matrix:
This is a tool which can be use Vodafone in order to determine the competitiveness of
telecommunication industry of United Kingdom. One of the main benefit of this it provide
direction to manager which help in take better decision related with business operations.
Further this help in utilise the opportunity either with help of new market and product or with
current market or product. Mainly this matrix is divided into four parts as given in the
following points:
Market development: Under this, entity start selling its products in new market or areas.
Vodafone is already operating in large number of areas and due to this profit number of entity
is very large. By offer its services in rural areas entity can increase its customer base. But for
increase the sale of its products, entity require to opt an effective channel to interact with
target audiences.
Market penetration: One of the main benefit of this strategy is that it ensures optimum
utilisation of all resources and enhance efficiency of business process. This increase market
share and business growth of company (Malerba and et. al., 2015).

Product development: Under this strategy, new products are manufacture and offer by
firm to serve its customers and get their satisfaction. With this, entity can retain them for long
time period and can get a competitive position in market.
Diversification: Under this strategy, entity offer new products in new market to
increase its market share and to increase the number of its profits.
All these are the major strategies cover under the Ansoff’s growth matrix. Before
choose a final strategy, it is very essential for manager to collect information about the
situation exist in market and undertake a situational analysis will be beneficial for entity in
this.
TASK 2
Analysis of internal environment of company
Undertake an internal analysis is related with identify strengths and weakness of firm.
One of the main benefit of this type of analysis is that it helps manager in take better decision
and help in minimise the negative impact of its weakness. Vodafone operate on an
international level, so undertake internal analysis is very important for entity to achieve
desired goals and objectives.
Strategic capability: This aspect reveals the ability of a business entity to do achieve a
competitive benefit which help in attract large number of customers towards its product. it
examines the strategy and various tools use by firm to execute its business operations.
Further, market position of company and all its resources is also examining in this. Strategic
capability of organisation play a big role in its success as this help in get a competitive edge
in market. Interested individuals such as employees and supplier do efforts to highlight
strategic capability of firm. Managers undertake a detailed study about strategic capability as
this help in get desired outcome provide basis to generate more profits as compare to its
rivals. Financial bodies and government agencies also indicate a interest in strategic
capability of firm.
VRIO analysis: This is another tool which is use by business enterprises to examine
the usefulness of resources and its importance in success of entity. It help in utilise all
business resources at an optimum level and also provide competitive benefit to organisation.
Valuable: This aspect of VRIO analysis help in identify the resources that are
valuable to a business entity and are the ones that help in capture a large market share (Lueg,

Pedersen and Clemmensen, 2015). One of the main benefit of these type of resources is that it
support in offer more value to the customers which entity in maintain its market share. These
types of resources add effectiveness in business. This save both time and cost of entity.
Determine the value of its resources is very significant for Vodafone as with this, entity can
offer value to its customers and at the same time can satisfy their needs.
Rare: Valuable and rare resources boost up the success process of entity and also
provide competitive benefit. Unique resources support entity in manufacture featured
products for its customers and at the same time help in attract large number of customers
(Hofmann and et. Al., 2014).
Costly to imitate: When organisation’s resources remain difficult to imitate by other
organisations then it increase effectiveness of business process. As resources use by
Vodafone are difficult to imitate by other entities so this provide large number of benefits to
company.
Organised to capture value: To get various benefit, it is very essential for business
entity to determine the value of various resources it use to carry out its activities. With this,
firm cam formulate plan to utilise all resources at an optimum level and can get a competitive
position in market.
Strengths and weakness of Vodafone
Strengths: This aspect indicate the specific features and qualities that support entity in better
satisfy the need of its customers. Strengths of Vodafone are given in the following points:
 Today, Vodafone is one of the leading player in telecommunication industry.
 Large number of products and services are offer by entity to satisfy the needs of its
customers.
 High brand recall and brand visibility support in attract large number of customers
every year.
 Due to offer various products and services, entity generate large amount of profit and
at the same time firm ranked among top 2000 brands working in telecommunication
industry.
Weakness: This is the aspect that negatively affect the success of enterprise. Weakness of
Vodafone is given below under the following points:

 Firm is facing a downfall in number of its subscribers. To improve this, entity
require to introduce some changes in its policies and strategies.
 Due to large number of competitors, entity face a price war which decrease the
profits of company (Lewis, 2014).
 Ineffective distribution channel is another weakness of entity.
 Due to ineffective research and development department, entity is not able to offer
new and featured services to its customers.
TASK 3
Examine the competitiveness of telecommunication sector
Porter’s five force analysis:
It is one of the important analysis for business organization of examine the
competitiveness in telecommunication sector. Under this Porter stated that business have to
maintain a close eye on their competitor but on the other side Michael also encourage as well
as support business to look at their strategies of competitors which may leads in improving
overall performance of the company. Along with this, he also said that there are five forces
that helps in examine the competitive environment that largely impact of business activities
(De Massis and Kotlar, 2014). In UK market telecommunication is fastest growing and
competitive as number of companies provide telecommunication services to customers. In
this context, for effectively analyse the competitive environment, five forces model adopt by
the company which are as follows:
 Bargaining power of buyers: Under this, consumers are the important and king for
company as it is high power of buyer. As various companies are serve their services in
competitive market place. In this the main reason is that is regulated nature of
industry. As it is big threat for Vodafone, thus it is important for them to make as well
as implement effective policies to attain their set goals and objectives by delivering
quality products and services. This will help in satisfying customers’ needs and wants
in most effective manner (Moseley III, 2017). It directly contributes in capturing the
larger market share from company rivals.
 Bargaining power of suppliers: As suppliers are refer to mobile operator as they
provide better infrastructure to established mobile operation in market. As
manufactures are also consider as a supplier for telecommunication companies. Along

with this the bargaining power of suppliers are moderate but it larger affect the
competitiveness of telecommunication industry. In this company easily manage their
working performance in order to established their positive brand image and at the
same time also maintain their high market share.
 Threat of new entrants: In telecommunication industry in UK, threat of new entrants
is significant as the potential growth is very high. In this number of new player are
highly enter in market for operating their business. Thus, it is also a threat for
Vodafone as they have to formulate as well as implement effective plans and
strategies to make their strong place in market. With the help of this company
improve their performance level high as compare to its competitors. This will directly
contribute in establishing positive brand image at market place.
 Threat of substitutes: As in telecommunication sector, substitute products and very
high because number of companies also serve same products and services at low cost
as customers are easily switching. For this company have to use new technologies and
ways to produce better services for their customers at affordable cost which will helps
in improving their customers base. Along with this, it is threat for Vodafone company
so that company should adopt effective methods to retain their customers by
providing them better services (Torrent-Sellens, 2015). This will help in capturing
larger market share form its rivals and also grab customers attention as well.
 Rivalry within the market: Under this, competition is very high in telecommunication
sector as number of companies are involve and operate their business to attain
competitive advantages. In this company also use various strategies to improve the
chances of attaining higher profitability level. Along with this, promotional activities
are also needs to allocation of budgetary as it defines level of competition at market
place. On the other side, another element is company also invest money in research
and development activities in order to make as well as produce quality products and
services. In this company use advanced technologies which may helps in inviting
larger number of customers towards company services (Mellat-Parast and et. al.,
2015). Mainly, all these are main threat for Vodafone company as company needs to
use effective strategies such as price and non-price strategies through which they
easily grab customers attention towards company products. With the help of this,
company easily maintain their brand image and also generate larger profitability level
in market place.

Hence, all these are appropriate models for examine the competitiveness in
telecommunication sector. This will help Vodafone to effectively analyse their overall
performance level which may helps in improving their performance level at market place. one
of the main advantage of using this company easily grab customers attention and established
their positive brand image.
TASK 4
Strategic directions and options available to enterprise
Bowman’s Strategic Clock:
This model is more effective and important which define various option and
alternations. By using this company make their strategic positioning in market place. with the
help of this, company easily positioning their products in market place for attaining
competitive advantage form its competitors at market place. Basically, this model defines
various ways and options to set product in market as per tow factors such as price and
perceived value. By this company easily improve the chances of attaining high profitability
level at market place by inviting larger number of customers. In context of this, Vodafone is
famous and multinational business which deliver quality services in whole world. As
company use this model to make their performance higher in market place. this model
includes 8 options which are as follows:
Low price and low value added (Position 1): it is one of the important position which
shows that company does not have competitive position at market place (Parnell, 2016). so
that company needs to be produce low cist products to attain competitive advantage in market
place.
Low price (Position 2): It is related with the positioning of the products and business
in low cost leader. Along with this, company use low cost strategy to reduce the overall cost
of the company. As company enhance they profit by improving product quality.
Hybrid (Position 3): Under this, two different strategies are including which is low
price and products differentiation. Along with this, the main of Vodafone is to encourage
customers towards its products which may leads in improving the performance level of the
company at market place.
Differentiation (Position 4): In this, company provide high quality products to its
customers which may leads in improving their positive brand image at market place. Along

with this, another major factor is company branding is developed by its products and services.
Thus, company should deliver quality products and services to attain strong customer base
which positive impact on its brand image.
Focused differentiation (Position 5): Under this strategy, company set their product
price at higher level. Mainly, this type of strategy is used by company for their quality and
luxury products. As company also use effective targets promotion, segmentation and
distribution for attaining better success in market place (Grant, 2016). with the help of this
company easily established their positive brand image and also sustain for longer period of
time in market place.
Risky high margins (Position 6): It is one of the complicated and risky model in
which company set their product price high which may reduce their customers and their
loyalty as well. If customers are buy its products then company easily attain higher
profitability at market place. On the other side, if company sell their regular products on
premium price them it negatively effect on the business and its image as well.
Monopoly pricing (Position 7): This type of position, individual’s sale their products
and services in market place. under this there is no choice as well as alternatives in market as
monopolist set product price as per their wish.
Loss of market share (Position 8): This phase defines the strategy which should be
implement as well a consider by the company to attain competitive advantage (Chang,
2016). Under this position, company set their products price to invite larger customers.
All these are important strategies which consider by Vodafone at the time of
executing business activities in market place. Along with this, it is important foe company to
serve quality values to attain competitive advantage at market place which may directly
contribute in attaining higher success.
CONCLUSION
From the above-mentioned report, it can be concluded that strategies are important for
business organization to attain set goals and objectives. Mainly, business strategy is
considered as an action which help manager of the company to take better decision in order to
achieve desirable results. Along with this, various factors are also defined in strategy which
directly affect the overall business activities and operations as well. Thus, it is important for
manager to effectively adopt as well as implement appropriate strategies to enhance the

profitability level of the company at market place. In this context, PESTLE analysis is also
used by the company to determining the external factors and its impact on business activities.
In addition of this, strength and weakness of the business is also play vital role in examining
the actual performance of company at market. By formulating business strategy company
easily reduce the chances of arising any kind of issues and conflicts. With the help of this
company attain better success.