Vodafone Business Strategy: PESTLE, VRIO, and More

This report provides a comprehensive analysis of Vodafone's business strategy, examining the macro environment through PESTLE analysis and assessing internal capabilities using the VRIO model. It delves into Vodafone's strategic positioning, considering factors like political, economic, social, technological, environmental, and legal influences. The report explores the application of Ansoff's growth matrix, evaluating market development, penetration, and diversification strategies. Furthermore, it assesses Vodafone's strengths and weaknesses, focusing on strategic capabilities and competitive advantages within the telecommunications industry. The analysis includes Porter's Five Forces Model and Bowman’s Strategy Clock Model to understand the competitive landscape and strategic positioning of Vodafone in the market. The report concludes with key findings and recommendations for Vodafone's strategic management decisions.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Analysing macro environment and how it determines Vodafone organisation's strategic
management decisions............................................................................................................3
TASK 2............................................................................................................................................6
P2. Critically evaluating the strengths and weaknesses of Vodafone internal capabilities,
structure and skill set..............................................................................................................6
VRIO model to determine strategic capabilities proposed in the organisation......................6
Organisation strengths and weaknesses..................................................................................8
TASK 3..........................................................................................................................................11
P3. Porter Five Forces Model...............................................................................................11
TASK 4..........................................................................................................................................14
P4. Bowman’s Strategy Clock Model Analysis...................................................................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business strategy is considered as an important role in the business to attain desired
results at workplace. In this regard, there are different considerations included that assists to
focus on the environmental perspective. Present study based on Vodafone which is in
telecommunication industry and deals in more than 156 nations. They consider different
operations and functions to develop target market in a systematic manner. With this aspect,
report covers about the PESTLE analysis and Ansoff matrix to focus on the innovative
characteristics at workplace. Furthermore, it includes Bowman's clock strategy which aids in
determining the effective positioning of the company in the market. Moreover, strengths and
weaknesses of the present report help to attain more effective results and desired outcomes to
undertake goals and objectives.
TASK 1
P1. Analysing macro environment and how it determines Vodafone organisation's strategic
management decisions
Telecommunication networking industry is one of the emerging industries in UK, and in
case of worldwide, it is growing in mobile telecommunication sector (Parast,2018). It has been
seen that, in UK the trend of sale according to survey done by Deloitte is that more than half
(53%) of citizens in the range of 16-75 year in UK are using smart phones while making the
equipment's of around 22 million people. Thus, the numbers of users’ raisin up in industry
because of effective communication demands emerging by peoples of nation. Overall it makes
influences on the macro environment of Vodafone in context of UK.
PESTLE analysis of Vodafone for Environment Analysis:
PESTLE analysis for a company is one of the important factors which must be taken into
account by its manager, in order to know about those external prospects which influence
business functionality and strategy as well (Du, 2017). Changes in the macro-environment factors
can have a direct impact on not only the Vodafone Group Plc but also on other players in the
telecommunications' sector. There are some following factors:
Political factors: Political factor is one of the significant factors which can affect
Vodafone’s long terms profitability in different market. Vodafone functions in multiple
countries across the world. Therefore, they face different political changes and political system
risk at broad level. In order to gain achievement in such dynamic telecommunication industry,

various countries contain high-level systematic political environment (Meckling, 2017). Political
stability and importance is necessary for country's economy. It provides intellectual property
protection for the company by which they can boost their brand value and equity as well as in
industry. In addition to it, they have to follow anti-trust laws of different country as per their
regulatory norms and regulations, so it can be said that, it makes broad influences on business
strategy of Vodafone group.
Economic factors: Variety of macro environmental elements such as inflation rate,
saving rate, interest rate, foreign exchange rate and economical cycle ascertain the aggregate
demand and aggregate investment of an economy. Vodafone considers the country's economic
element which is needed to be taken into account. Such as, country's growth rate, inflation and
industry economic indicators such as telecommunication industry growth rate etc. government
intervention in the free market and telecommunication sector of the country also makes an
impact on economic growth of the country (Sieger, 2018). Apart from it, infrastructure quality of
telecommunication industry makes an impact on changing business strategy of Vodafone in
specific nation. Skills level of employees in telecommunication industry also making impact on
profitability and productivity of the business. So in case of UK, the economic factor of the
country makes a great impact on business and strategies of Vodafone.
Social factor: It can be said that, communities culture and way of doing things makes
impact on the culture of the company in case of UK, numbers of people uses telecommunication
services of Vodafone and share beliefs and attitudes that the populations play a great role in in
framing marketing strategy of Vodafone . Demographics and skill level of population is making
impact on productivity and profitability of the Vodafone group in industry. Different cultural and
sociology level of country influences the business strategy of firm in any industry (Cecere,
Corrocher and Battaglia, 2015).
Technological factors: Technologies are frequent changing in telecommunication
industry around the world. Recently technologies launched in the telecommunication industry by
Vodafone group's competitors in UK has been made great impact on changing in its current
strategy of doing business (Baraibar‐Diez, 2017). Technology furnishing opportunities to
Vodafone group to enhancing their quality and services effectiveness towards its users. In case of
UK, the younger generation is focusing on utilising the latest technologies as digital marketing
and other various purposes. It influences the strategic level of the firm in the UK.

Environmental: Environmental factors are affecting strategy of Vodafone. It can be said
that, climate changes increases the maintenance and cost of operation for Vodafone. This affects
the profitability f company in adverse climatic condition (Lance, 2017). In addition to it, weather
is changing in country, in most of the time, in rainy seasons; Vodafone faces barriers in case of
provision of proper telecommunication services in industry. Moreover, laws regulation related to
environment pollutions should be considered by the company in order to provision services, so
all these factors affect the strategic changes of firm.
Legal factor: It has been seen that, in case of numbers of countries, the legal framework
and institutions are not robust enough to protect the intellectual property of the industry.
Vodafone must consider all legislative norms and regulations related to the telecommunication
industry in UK, which enables company to functioning their various business functionality in
industry in proper way. They have to follow discrimination law at workplace to having fair
behaviours with its employees. In addition to it, they also have to follow different country's
consumer protection law and e-commerce legal provision take into consideration while entering
into a specific country's business environment.
Ansoff's growth factor matrix to analyse Vodafone organisation's strategic positioning:
It first appeared in the Harvard Business Review in 1957; it can be used by Vodafone’s business
manager in order to understand strategic positioning of the company in industry.
Market development: Vodafone company need to target new markets in different-
different countries as per new areas in existing market (Baraibar‐Diez, 2017). The business
manager can use PESTLE analysis, it orders knowing the current situations of the industry in the
country. They have to make different sales channels in various reasons of the country, as per its
requirements in market, so for execution of current market development, they have to use market
segmentation approaches.
Diversification: This strategy is complicated in nature, in which Vodafone can use their
existing expertise for achieving economies of scale, because company is making efforts to offer
completely unique telecommunication products and services from their competitors in market
(Spender, 2018). They need to understand the opportunities of business and expand it as per its
requirements.
Market penetration: Vodafone professionals require developing a new marketing
strategy to encourage more people to making utilise of its telecommunication products and

services as per its expectation from new market (Buckley, 2016). In addition to it, they have to
introduce new loyalty scheme of its telecommunication services towards existing customers in
market. Business need to offer attractive discount vouchers and special offers of promotions,
which assist the firm in gaining desired success
Product development: In case of telecommunication services development of Vodafone,
its professionals need to make sure that, they have to make use of some areas where something
new activities can be raised in proper way. Apart from it, it must introduce different variants in
its existing products and services, which can assist them to satisfy their customers as per modern
demand from telecom industry in UK.
TASK 2
P2. Critically evaluating the strengths and weaknesses of Vodafone internal capabilities,
structure and skill set
Strategic capability: A business is not complete without its customers, so varied factors
are associated with it, which is customers, market share and revenue. Vodafone utilise tactics as
per its requirements in industry and putting them into feasibility is the major responsibilities of
the business leadership in firm. Strategic capability means, business has ability to making
success of their employ competitive strategies that enables it to running and raise its value over
time in industry (Mellat-Parast, 2018). In case of strategic capability of the company, it assists its
manager in order to make their major focus on the organisation's assets, resources and marketing
positioning and how better it will be beneficial for the employ strategies of company in the
future. Thus, there is no specific method for measuring strategic capability of the company. With
the help of strategic capability, Vodafone can reach their desired goals and objectives. It helps
the company's managers and leaders to understand not only Vodafone's market positioning but
also recognising strategic capabilities of its competitors and marketplace in which they can
operate business functionalities.
Example:
Supply chain system: The best example of Vodafone organisation's strategic capabilities
is that, it executes a strategy that might depend on suppliers. The business has opened up
numerous types of supply chain system by which they can manager all their telecommunication

activities and also distribute its services in perfect form. So it increase its profitability and
productivity of the business in industry.
VRIO model to determine strategic capabilities proposed in the organisation
In respect to determine the strategic capabilities in the business, VRIO model consider
important role in Vodafone. With this regard, following elements are included to understand the
framework:
Value: In respect to look towards the value, Vodafone need to identify that is the enterprise
capable enough in respect to exploit opportunity and reduce external threat with available
resources. In addition to this, they need to identify that skills and capabilities are enough to
execute effective plan in the business to attain desired results. Therefore, business considers their
aims and objectives to maintain effective value in the business environment (Kim, Jun and Lee,
2014).
Rarity: Rarity includes controlling of resources, skills in the hands of relative few.
Therefore, effectiveness will be increasing to cope up with the plan and attain more significant
results at workplace. In addition to this, it includes creativity that was undertaken by the
Vodafone to maintain their profits in systematic manner (VRIO: From Firm Resources to
Competitive Advantage, 2018).
Imitability: Furthermore, the chosen business considers assessment of difficulty to imitate
and includes cost disadvantage in the firm. Therefore, they are trying to develop, acquire and
replicate the skills and resources in systematic consideration at workplace.
Organisation: When firm organised their activities and tasks, they need to focus on the
exploit resources and activities that are needed to perform several functions in the business unit.
In this regard, they can capture value in significant manner.
On the basis of following elements, VRIO model consider in the chosen business:
Resources Value Rarity Cost of
imitate
Organised
capture
value
Competitiv
e
implication
s
Strength or
weaknesses
Technologi High Medium High Medium Temporary Strength

cal
assessment
competitive
advantages
License of
spectrum
Medium High Low High Competitive
parity
Weaknesses
Human
resources
High Low Medium Medium Competitive
advantages
Weaknesses
Customer
relations
High High High Low Sustained
competitive
advantages
Strength
Managerial
expertise
High Medium Medium High Moderate
competitive
advantages
High
strength
Services
level in
Vodafone
High High High High Temporary
Competitive
advantages
Strength
with distinct
competence

Organisation strengths and weaknesses
It is important to focus on the business analysis; there are different strengths and
weaknesses exist that create impact on the performances. In order to focus on the internal
analysis, different perspective of the marketing needs to be considered in the business. Therefore,
Vodafone needs to concentrate on these aspects to analyse creativity at workplace (Ghezzi,
Cortimiglia and Frank, 2015). In addition to this, it is also useful perspective to understand
market need and requirements in systematic manner. Therefore, it helps to focus on the different
aims and objectives as well. Following are certain strengths and weaknesses explain of the
chosen business:
Strengths
 Vodafone is popular cellular service provider across the world: Vodafone is the only
company that deals in different countries. Therefore, they capture large market in term of
deals with their services. In addition to this, they consider operations and functions in all
across the world so that it makes effective advantages to make creative results and
Illustration 1: VRIO Model
Source: (VRIO: From Firm Resources to Competitive Advantage, 2018)

outcomes in the business environment. With the help of this strength, the company can
attract maximum customers at workplace.
 More than 1,000,000 employees: In all over the world, there are maximum employees
exist that consider their operations to attract different customers. Employees provide their
efforts and part to make creative results in the business. They always consider new
operations and functions through customers that will attract in systematic manner. As a
result, it impacts positive to deal with the different functions and operations (Cecere,
Corrocher and Battaglia, 2015).
 Strong advertisement: Furthermore an advertisement activity of the chosen company is
very strong so that it impact positive and attract maximum peopled in the business. In
addition to this, proper allocation of resources considers attracting people at workplace in
a systematic way. With this aspect, the company ensures that scale helps to measure
outcomes from the business advertisement in the market.
 Presence in more than 150 nations: Furthermore, the chosen business exists in more
than 150 nations so that more customers are known about this company. As a result,
maximum uses of the business activities consider positive advantages to deal with the
innovations and creativity. Along with this, it is also helpful consideration which assists
to focus on the proper facilities through services could be provides to customers to attract
them in the business.
 Diverse services: Moreover, the selected business considers their diverse services to
attract customers in the business. In this way, they develop their operations and functions
to deal with the innovations and creativity in the different areas of the world. Apart from
this, different range of activities assists to focus on the innovations and creativity in the
market to deal with the functions and operations in the business environment. Vodafone
provide several kinds of services so that they are able to attract maximum customers
easily in the business environment.
 Highly efficient website: In addition to this, Vodafone has highly efficient website so
that it impact positive to attract customers at workplace. In this regard, systematic work
performances consider on the company website that assist to meet with desired results
and outcomes. Apart from this, website consideration is major aspect that helps to attract
different customers in the business at workplace.

Weaknesses
 Being global brand is the toughest situation: However, Vodafone also facing certain
issues and problems in term of the weaknesses. Therefore, they need to cope up with
effective functions and operations to solve issues. In this way, main problem which face
by the company is that they are unable to take place in global brand. This is because,
there are many other businesses existing that considering their operations and functions
from several years. It is essential to focus on the innovative and creativity consideration
to develop target market in systematic manner (Kim, Jun and Lee, 2014).
 They constantly fight with competitors: Along with this, another problem in the
business consider is that they are constantly competing with the major competitors in all
over the world. Therefore, they are unable to deal with the market elements and ascertain
systematic work performances at workplace (Krishna, Ojha and Barrett, 2017). In
addition to this, it can be stated that different business provides products and services on
the basis of effectiveness so that Vodafone need to concentrate on them to identify their
strategy as well.
 Low market share: Due to low market share in the world, Vodafone is unable to deal
with the different characteristics at workplace. In this regard, the chosen company need to
focus on the different aspects through they are able to deal with the innovative tools and
activities in the market.
TASK 3
P3. Porter Five Forces Model
In respect to deal with the different elements of the market, Vodafone need to identify
market analysis. With this regard, different aspects need to be attaining to analysis the market. In
this regard, market elements need to consider focusing on the desired results and outcomes
(Ghezzi, Cortimiglia and Frank, 2015). There are different elements in the market that create
major impact on the findings.
 Bargaining power of customer (High): Bargaining power of the customers in UK
market is very high for Vodafone because there are major businesses existing in term of
telecommunication industry. In addition to this, all they consider same products so that
customer can buys products from that place where they get at low cost. However, strong

buyer power needs to reduce because of cutthroat competition existence in the market.
Buyer power effectively reduced in the industry in the level of competitors. As results, it
helps to keep reasonable profits and revenue that needed at workplace to deal with the
different activities and functions (Nie and Haryadi, 2017).
 Bargaining power of suppliers (High): Furthermore suppliers of the Vodafone also
possess high power of bargaining. This is because, the company operating their functions
and operations with greater margin so that it could be consider with competitors as well.
As the market leader, market share of the company is large so that it could be absorb at
any price which increments from the suppliers more than the competitors (Haryadi,
2018). Therefore, the chosen company able to maintain their low prices to create
systematic advantages at workplace. In addition to this, profitability in the business also
maintain in systematic manner.
 Competitive rivalry (Moderate): Vodafone faces extremely with high rivalry from their
competitors due to the low rates charges. Other competitors consider fewer prices on the
products and services so that it is important to look upon the creative results to operate
functions and operations (Kim, Jun and Lee, 2014). Competitors constantly provide
innovative products and services to their customers so that it consider same to their
customers as well.
 Threat of substitute (Low): In the UK market there is low threat of substitute products
and services. This is because, Vodafone consider quality and standards in their products
and services to deal with the market. In this regard, landlines and CDMA services
provided with decline broadband activities. In addition to this, the company also provide
video conferencing, Skype, etc. (Krishna, Ojha and Barrett, 2017). In this regard, there
are different consideration that has been taken to focus on the innovations and creativity.
For instance, strong buyer power attributes to substitution, etc.
 Threat of new entrants (Low): Threat of new entrants in the UK is also low because
telecommunication industry requires more investment to deal with the functions and
operations in the market. In this manner, low barrier to entry exist so that other
businesses are unable to enter in the market (Lu, Lin and Zhang, 2014). In addition to
this, cost of setting up network infrastructure is high and also changes continuously.