Comprehensive Analysis of Vodafone's Business Strategies

This report provides a comprehensive analysis of Vodafone's business strategies. It begins with an introduction to business strategies and their importance, followed by a PESTLE analysis of Vodafone, examining political, economic, social, technological, legal, and environmental factors. The report then explores Ansoff's Matrix to identify Vodafone's strategic position, including market penetration, market development, product development, and diversification strategies. Furthermore, it delves into Vodafone's strategic capabilities and utilizes the VRIO/VRIN model to evaluate its resources and competitive advantages. A SWOT analysis is also included to highlight Vodafone's strengths and weaknesses. The report also applies Porter's Five Forces model to assess the competitive landscape and concludes with an analysis of Vodafone's strategic direction using Bowman's strategy clock model.

Business strategies

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. PESTLE analysis.....................................................................................................................1
2. Ansoff's Matrix........................................................................................................................2
TASK 2............................................................................................................................................4
1. Strategic capabilities...............................................................................................................4
2. VRIO/VRIN model ................................................................................................................5
3. Strength and weakness of organization...................................................................................5
TASK 3............................................................................................................................................6
Five Porter’s forces model ........................................................................................................6
TASK 4 ...........................................................................................................................................7
Using Bowman’s strategy clock model, analyse the strategic direction of Vodafone
organisation.................................................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategies can be defined as high level planning of firms in order to reach to the
specific objective. Each entity aims to enhance its profit and sustain in market for longer duration
(Harlow, 2016). For that higher authorities prepare effective strategy that helps in gaining
competitive advantage and increasing financial performance of the company. Present study is
based on Vodafone which has good position in the mobile telecommunication sector. This
industry is growing well and over a period of time profit of mobile telecommunication industry
has been enhanced to great extent Current assignment will describe PESTLE analysis model with
reference to the Vodafone. Furthermore, it will explain concept of strategic capabilities and
VRIO model. Study will discuss Ansoff matrix model in order to identify strategic position of
the firm. In addition, porter's five forces model will also be explained in this assignment.
TASK 1
1. PESTLE analysis
Vodafone is performing well and now it has become the leading telecommunication firm
in this industry . It has many branches in more than 30 countries. Firm always concentrate on
providing amazing services to the consumers so that they feel satisfied. In order to run its
operations in smooth manner company emphasis on its external market situations and
accordingly makes changes in the existing practices. Pestle analysis model with reference to
Vodafone is described as below:
Political factor
Political situations impact on the working of business unit to great extent. Vodafone
always prefer to enter into the country where political conditions are stable. It helps the
telecommunication firm in running its business in this location in smooth manner. Vodafone is
performing well in UK because government of the nation is supporting to the industry. All laws
and regulation are in favour of the sector that helps the entity in conducting its operations in
smooth manner (Pestle Analysis of Vodafone, 2017). India, England, Newbury etc. many other
locations where Vodafone is performing well due to stable political conditions.
Economic factor
It is another most essential macro factor that impacts on the overall performance of
business unit to great extent (Chathuranga, 2015). If economy condition of nation is good then it
helps the Vodafone in attracting new buyers because with the stable economy condition people
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will get adequate income sources. This enhance capabilities of the population to buy its products
and services. On other hand there are many countries where economic condition are not goods.
In such condition cited firm has to face huge issues in running operations.
Social factors
It is another macro element that affect external performance of the business unit
significantly. Vodafone always look at the life style, preferences, choice of population of
particular country (Fasan, 2015). According to their social needs entity offer them products and
services. UK is the nation where people like to buy 4 G services, thus entity has started providing
them these services. This has helped the entity in enhancing its profit in this country.
Technological factors
Technological advancement helps the firm in raising efficiency of the operations.
Vodafone always implements new technologies that helps in offering satisfactory services to the
buyers (Florczyk, 2016). Recently it is started providing 4G services to the consumers. This has
enhanced sales of the company to great extent. With the changes in technologies, Vodafone also
makes changes in its strategies and implement new techniques in workplace so that employees
can perform well and can provide satisfactory products to the customers.
Legal factor
Legality impact on the overall performance of the company. Vodafone always follow
legislation of each nation that helps the firm in conducting operations in different nations
smoothly (Heracleous and Werres, 2016).
Environmental factor
It is another factor of Pestle Analysis that helps Vodafone in satisfying consumers.
Company always concentrate on creating positive atmosphere so that people feel happy ad they
retain in workplace for longer duration. It follows environmental policies and take care that it can
serve better to the society.
2. Ansoff's Matrix
Ansoff matrix model is helpful in identifying strategic position of the business unit in the
market. There are many firms which are giving tough competition to the Vodafone. In such
condition company has to look upon the strategic position and have to make such strategies that
can help in raising its position in the market (Florczyk, 2016). This model consists of four phases
Market penetration
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It is the method in which company always sell existing products in the existing market.
Vodafone is the leading telecommunication brand that looks upon new opportunities that can
support the firm in raising its business performance. Currently it has more than 25000
distribution channels that contribute well in raising profit of the firm . If company pay attention
on developing existing market then it can help in satisfying consumers well and meeting with
their needs.
Market development
It is another strategy that helps the entity in developing its market. Vodafone adopts this
strategy and continuously work to enter into the new market. This gives opportunity to expand
the business and attracting new buyers. This strategy has make the firm able to work as global
entity. It has many branches nationally and internationally. It concentrates on needs of
population and accordingly it offers them products and services in the new market. Continuously
developing market helps the organization in gaining leading position and gaining competitive
advantage in the market (Harlow, 2016). For developing the market Vodafone looks at the
effective promotional strategies and enter into new market .
Diversification
It is the type of strategy in which organization has to concentrate on selling different
products in different market. This diversification reduces risk of the firm and helps the entity in
gaining success in new market. Diversification enhances supply chain system of the Vodafone
and it can help the corporation in increasing its profitability. Recently Vodafone has launched
new machine service platform (Chathuranga, 2015). With the help of these products many firms
are able to manage their wireless system. This has increased demand of Vodafone in the market
and it has become able to attract new corporate customers as well.
Product development
It is the type of strategy in emphasis on developing new products that can satisfy needs of
existing buyers. Vodafone is performing well in UK and many other countries. It collects
information about needs of clients and accordingly offer them products and services. If it
develops its products and sell it to existing buyers then it will help in creating positive brand
image and making people loyal towards the brand. Vodafone has started providing 4G network
services to its existing consumers (Hussain and et. al., 2013). This has retained customers in the
firm for longer duration. Network that provides by the firm is good as compare to other
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organization. Thus, this gains attention of other buyers as well that supports business unit in
increasing number of consumers and gaining competitive advantage as well (Chathuranga,
2015).
TASK 2
1. Strategic capabilities
Strategic capabilities are the significant feature of business unit that describes ability of
the organization to fulfil needs of consumers. Strategic capabilities make the company different
from other competitors. Each firm makes some strategies that helps in strengthening their
capabilities and minimizing their lacking points. It supports entities in gaining success and
sustaining in the market for longer duration (Harlow, 2016). Capabilities are such strong points
that make the firm able to expand their business and create positive brand image in the mind of
customers.
Investors like to invest in such firms which have strong capabilities to earn more profit. If
organizations are unable to satisfy investors then they will not in vest in the organization.
Strategic capabilities attract investors and they invest huge amount in the organization in order to
gain high return over it. Strategic capabilities of business are such as employees, managers,
financial resources, visibility of the firm etc. All these aspects create unique brand image in the
mind of investors and they make decision to in vest amount in the organization. Vodafone is the
successful telecommunication brand. Company always concentrate on their employees. It treats
them well and provide them positive workplace environment so that they feel happy. This helps
the company in retaining skilled people in workplace for longer duration and making them loyal
towards the brand. These talented people contribute well in the success of business unit and
support in providing quality services to clients. Entity trains them so that they can enhance their
skills and can perform well in the entity (Florczyk, 2016). Financial resources of Vodafone is
another capability of the firm. It utilizes its monitory resources well. This helps the firm in
minimizing expenses and enhancing revenues of business unit. Strategies to manage resources of
the business play significant role in the success of the firm. Vodafone has effective strategies that
has helped entity in managing its resources well and minimizing wastage. That is why Vodafone
has become able to expand its business in many countries successfully. This strategic capability
of the firm has supported in raising its band image in the market (Schiele, Harms and Banerjee,
2014).
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2. VRIO/VRIN model.
VIRO model is used to evaluate resources of company. These resources are as follows;
Financial, Human, Material and Non-material resource. By evaluating them it help company to
understand about competitive advantage or weakness. The dimensions of VIRO is; Value,
Rareness, Imitability and organisation. Vodafone is the third largest mobile operator within UK.
Company was established in year 1980. It manages ultra-large scale mobile networks in more
than 31 countries across the globe. VIRO model of Vodafone is as follows;
Strong global presence: Valuable: Company has strong global presence which constitute as an important assets of
Vodafone. It trying to increases it size, sales and market share. It is a great way to gain
more revenues from new and existing consumers. Rare: Vodafone is the biggest and multinational telecommunication company. Although
there are many competitors of Vodafone that offer same services but it is the most
recognisable company. Inimitably: In short term no competitor of Vodafone was Able to gain such large global
presence. It would take significant amount of time for others to reach to the position of
Vodafone.
 Organisation: The company is taking great advantage of this situation. This can be
quoted from their tag line “ Future is exciting”.
Competitive advantage: Realised sustainable advantage (Galpin, Jouflas and Gasta,2014).
Convenience Drive-thru Services: Valuable: Offering a Drive Through services is very valuable to large number of
population within UK. It helps Vodafone to attract more consumers towards them. This
help in intiating business. Rare: By offering Drive-thru Vodafone is offering a rare services to their consumers. Inimitable: This strategic planning is inimitable as the other competitors of Vodafone
would required time to rebuild their locations and network services for providing drive
thru.
 Organisation: Vodafone offers this at many locations and branches of company. This
means firm is successfully exploiting their capability and gaining share of market.
Impact on Competitive Advantage: Realised Sustainable Competitive advantage.
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3. Strength and weakness of organization.
SWOT Analysis of Vodafone is as follows:
Strength: Marketing: The marketing strategies used by company is unique and innovative.
Vodafone has make use of pug and zoozoo's to attract consumers across the globe. It
always comes out with beautiful campaigns to attract people and make them use their
services. Revenues: Company generates great amount of profit every year . It sales figures are kept
on rising. The company ranked 104 in it is sales figure out of 2000 list and number 84 in
market value (Stonehouse and Houston, 2013). Market Coverage: Vodafone operates it business in more than 31 countries across the
globe. Company is planning to undertake partnership with 44 more countries. It has
established a strong market base. It is known for its wide distribution network cover
(Bamford and et. al., 2015).
Weakness: Dropping Brand Valuation: The company is suffering from it dropping in brand
valuation. It has suffered a huge drop in last 1 year. Tough competition: Vodafone is facing tough competition from it competitors in
globally rising Asian markers. Company faces competition with low price service
providers. Poor Performance in Europe: Vodafone performance in it home market is poor. It is not
able to generate revenue. The reason behind the poor performance is company is
suffering the political condition like; Brexit, and other economical challenges (Omar and
Sawy, 2013).
Opportunities: Increase in Dependency: Company can be benefited from the increase dependency on
cellular network. It is a need based segment, so number of potential users will always be
on high. Introducing 4G Service: The 4G services is a improved high speed data transmission.
The use 4G spectrum can result in higher revenues for the telecom operator (Vignali,
2015).
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 Emerging Markets: Company can tap opportunities in the emerging market sector of
Africa, India, China and Turkey. These countries shows improved performance and
increased in revenues. Further, developing countries are expected to deliver fast GDP.
Threats: Legal Proceedings: Company operates in many developing countries. In merging
markets there are many regulations and the political,economic and legal system are less
predictable. The unstability in political conditions make the Vodafone market vulnerable
to risk. Low Margins: Increased competition has resulted company with less profit margins. The
differentiation technique adopted by company didn't work efficiently and it suffers from
increased competition.
 Saturation: There is saturation of market in terms of noises and increased competition in
telecom sector. This result in company to spend more on advertising and marketing
campaign. but company is not able to attract same number of customers on the terms of
cost incurred on these campaigns (Smith, 2013).
TASK 3
Porter’s five forces model: Bargaining power of buyers: The buyers are always on demanding position they want
more services at cheaper rate. The strong buyer power effectively reduces the cost prices
in the industry. This creates problems for Vodafone Group PLC and creates barriers in
revenue generation of company. The smaller customer base of Vodafone creates strong
bargaining power of buyers. Company can improve it Bargaining power of Buyers by
rapidly innovating new products. As customer seeks innovation telecom services.
Further, company can build a strong and large customer base. It will help company to
reduce down the bargaining power of it existing consumer. Further, innovation in product
will reduce down the companies problem of switching cost of consumers. Bargaining power of suppliers:The suppliers within Telecommunication network are
stronger. Vodafone being a cost leader, operates with greater margins in compare to their
competitors. Powerful suppliers within technology industry uses their negotiating power.
To extract higher prices from firms. The overall impact of higher supplier bargaining
power is that it reduce down the revenue generation of companies within
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Telecommunication network. As a leader in market, Company can easily absorb any
price increments from the suppliers more than it competitors. Further, company can
reduce down the suppliers power bargaining power by building effective supply chain
with multiple suppliers. Company should experiment the product designing by using
different materials. If, in case the price of any one raw material rises it can shift to
another material (Shavarini and et. al., 2013). Threats of new entrants: This refers to entrants of new competitors within existing
industry. Threat of fresh market entrant is lower because of strong barriers of entry within
telecommunication network. To make an entry in this industry company needs to pay
heavy amount of licensing fees and have to undergo long procedure of regulation within
telecommunication services. Yet, there are certain tough competitors who can challenge
the working of Vodafone. Firm may suffer from the innovative and unique approach new
entrants in their products/services offered. The chances of competition with new entrants
are less but to build a competitive advantage company needs to developed their services
and spend money on research and development to enhance and build their capacities. Threats of Substitute Product/Services: A substitute products uses different technology
to solve the same economic needs. This refers to threat of substitutes of
products/services. When a new product meets the demands of existing customers more
effectively in different ways, then company may suffers a loss. The threat of substitutes
of product/services is moderate within Vodafone. Company suffers from substitutes like
Skype, Yahoo Messenger, etc. Further, the decline in land-line and CDMA services has
posses a threat to company. The focused cost leadership strategy that Vodafone operates
under makes it difficult for a competitors to introduced same products/services a t lower
rate. A strong market share of company help it to easily maintain low prices from its
suppliers and continue making profits (Wright, Paroutis and Blettner, 2013).
 Industry Rivalry: This refers to competition with other companies within same industry.
Vodafone faces extremely high rivalry from its competitors due to low price services
offered by them. Further, competitors provide innovative products and services to their
consumers. Thus, attracting the potential consumers of Vodafone. Company suffers a
tough competition rivalry within emerging markets of Asia, example; India and China.
The brand loyalty within consumers is decreasing and they have the power to switch to
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other brands. Tough competitors of Vodafone are; TATA group, Reliance ( Jio), Virgin
Media, etc. To reduce down the competition company need to build economies of scale
and sustainable differentiation in their services. Also, it can merged or collaborate with
other rivalry partners to reduce the risk of tough competition.
TASK 4
4. Using Bowman’s strategy clock model, analyse the strategic direction of Vodafone
organisation
Bowman's Strategy Clock
It is a marketing strategy which is an extension of Porter five forces model based on
generic market strategies. The Bowman's Strategy Clock model help Vodafone to effectively
stay in the competition and to attain competitive advantage in the best possible manner. The
eight position are discussed below- Low Price (Low added value): This is the first position where company has no
differentiated value of its products. In relation to this, firm do not compete as no
enhanced products and services are provided. Usually, firm do not like to be in such
position because it lacks competitiveness. In order to gain market, cost should be lowered
down and customers can be easily attracted. Low Price: It applies when Vodafone is able to sell products at low costs. In such
scenario, cost will become very low and as such, profit margin would be decreased. Thus,
it has to increase its sales volume in order to remain competitive. Hence, customers can
be easily lured as cost-effective services are imparted by firm. Hybrid: Hybrid position means that organisation sells services and items at lower costs
but are often considered of high value than its other low cost rivals. Quality of products
are not compromised and customers are satisfied. It eventually increases customer
satisfaction and they become loyal towards brand. Differentiation: The differentiation strategy implies that company sells products which
have competitive advantage as they are fairly differentiated from rivals. It is classic
example as Vodafone provides several value added services to customers which are not
sold by other telecommunication operators. Hence, through differentiated commodities,
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high perceived value is observed by customers leading to higher profits (Williams and
Figueiredo, 2014). Focused differentiation: It refers to those companies who offered high perceive value
products against high prices. This strategy was adopted by Vodafone to attract consumers
on basis the perception value. It adopted technique of differentiation in its services by
providing service of One Net, a hosted fixed and mobile voice services for SME. This
moved by company regard as effective move and it reduce down the mobile charge per
month per user by 15%-20% . Standard product and increase price: In this case company increase the prices of
product/services without making any change in their features. If this price increased
strategy is accepted by people then company would be benefited. But, it dose not work in
case of Vodafone as it operates within the large competitive market. Increased in price
can make loss to company.
 High Price (Low value): This strategy of bowman's work in the case of monopolist
market where only one company offers the good and services. In monopolist market
companies do not add any value feature to their products. If customers want they will
purchase the product and will definitely pay the price company has set. This strategy do
not work in case of Vodafone.
 Low value (Standard price): It means to charge the same price from consumers for low
value products offered by company. Any company who follows this strategy will
definitely lose market share. Vodafone do not adopt this strategy of Bowman's clock
model (Bowman's Strategy Clock Model & its Eight Competitive Directions for Edge. By:
Gulzar Ahemd. 2014).
Vodafone uses this method to implement a strategic plan for increasing it customer base
in UK and other overseas market across the globe. The company has diversified it business from
being just a mobile telephonic company to emerging service provider in communication industry
like, broadband services, cloud services and internet, etc (Al-Atiqi and et. al., 2014). It has
adopted innovative marketing strategy and provide high quality infrastructure network services.
Further, company has the plans to merge it operation with Idea a telecommunication network
10

company. This strategy of company is build to overcome the competition it faces in the emerging
markets.
CONCLUSION
It can be concluded that the various types of strategies, implements and evaluating all the
decision of Vodafone company achieve their goal with long run business. It also includes this file
impact of macro environment of this company and its business strategies also. It also explains the
pestle model for analysis this organisation. This file also use Ansoffs growth Vectors matrix.
This file also included the strength and weakness of the company. It also evaluating the
bargaining power of buyers, suppliers, new entrants, threats of substitutes and rivalry within
market. This firms main motive to maintain business strategies with effective manner and
achieve the goal of the organisation and established the customer relationship got long run
business.
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