Strategic Analysis and Recommendations for Vodafone Malta - Report

This report conducts a comprehensive strategic analysis of Vodafone Malta, a multinational telecommunications provider. It examines the company's strategic direction over the past five years, assessing its market leadership and competitive advantages. The report employs PESTLE analysis to evaluate the external environment, Porter's Five Forces model to determine competitive advantages, and analyzes the industry scenario. It also addresses strategic drift, the alignment of mission and vision statements, strategic capabilities, and the Business Model Canvas. Furthermore, the report describes potential strategies to defend its core business and analyzes the resource implications of the recommendations. The analysis highlights Vodafone Malta's past strategies, including mergers and technological advancements, as well as challenges within the telecommunication industry in Malta, such as maintaining fair competition and adapting to evolving customer expectations. The report concludes with recommendations for the company's future strategic direction.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Strategic direction of the company in past and strategic thinking within past 5 years...............1
TASK 2............................................................................................................................................2
Presenting external environment using PESTLE model.............................................................2
Determine competitive advantage using Porter five force model...............................................3
Industry scenario facing the company in its existing market domain.........................................5
TASK 3............................................................................................................................................6
Describing the extent to which the company is facing strategic drift.........................................6
Mission and vision statement are aligned to demand of marketplace.........................................6
Company's strategic capabilities.................................................................................................7
Business canvass model..............................................................................................................8
TASK 4..........................................................................................................................................10
Describing the possible strategies that the company could follow to defend its core business.
...................................................................................................................................................10
TASK 5..........................................................................................................................................11
Analyzing and evaluating the resource implications of recommendations that the company has
to address...................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management is the continuous planning, monitoring and analyzing of all the
essential things for a firm in order to meet the goals and objectives. The report main aim is to
determine the importance of strategic management in a company. The chosen firm for the
present study is Vodafone Malta which is one of the multinational telecommunication providers.
The company is one of the largest mobile operator in Malta because of having large customer
base.
The report will describe the strategic direction of the company in past and strategic
thinking within past 5 years and by using PESTLE, it determines the external environment of the
company. Further it find competitive advantage using Porter five force model and state whether
mission and vision statement are aligned to demand of marketplace. In addition to this, study will
describe company's strategic capabilities and Business canvass model. Moreover, report will
describe the possible strategies that the company could follow to defend its core business Further
it will also analyze and evaluating the resource implications of recommendations that the
company has to address.
TASK 1
Strategic direction of the company in past and strategic thinking within past 5 years
Strategic direction of Vodafone Malta in past years is to gain high competitive advantage
at global level. In past 5 years, the company also build strategy on its market leadership. Apart
from this, the quoted firm also provided its best services in the terms of fast delivery, proper
information related to tariff, the best customer services. But on the other side, with thousands of
tariff, it is not possible for the firm keep contact centre advisor up to date and to solve this issue,
the quoted firm has to identify the competitor intelligence tool which further help to retain
existing contract customers and it assist to attract large customer base (David and David, 2016).
This is the strategic direction that is followed by the firm in past years but as the time passes, it
makes different strategy to gain high market share and that is why it is considered a successful
company among telecommunication.
In addition to this, within past 5 years, the company's strategic thinking is changes such
that it find out competitive intelligence tool that further helps to reduce customer attribution and
also secure new sales as well. Apart from this, the company also merge with Idea which is
another thinking that helps to leads a business towards success. This also helps to gain high
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market share in telecommunication sector and as a result, it again sustains its brand image in
market at global level. This merger also help a business to achieve the swift return on its
investment as well. Recently, the company also opted Accelerated Intelligence in order to deliver
optimum benefits in the terms of improved customer retention as well as sales. Therefore, this
clearly shows the positive result and due to having strategic thinking now company has its
highest market share.
TASK 2
Presenting external environment using PESTLE model
To determine the external environment, PESTLE analysis is used which consist of
different factors that are as mentioned below:
 Political factor: The main political factor includes the roaming regulation whose main
aim is to decrease the charges of mobile phones usage abroad up to 70% and increase the
level of customer insights. Apart from this, the rules made by Malta government also
creates implication for the company for its smooth functioning. Even, if the country have
political instability then it also affected the company in negative way (PESTLE Analysis
of Vodafone, 2017). For instance, the conflicts in Europe has greatly affected the
company as a whole.
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Illustration 1: PESTLE analysis
(Source: PESTLE analysis, 2017)

 Economical Factor: If the country has good economic condition that means people has
more income and will be prone to adopt new or latest technology. In such way, the
overall profit of the firm also increased and the chances of expansion also increases. For
instance, there is global economic crisis in 2007-2010 that affect the business in negative
way and this also force company to change their current strategy as well.
 Social Factor: This factor is completely based upon the local beliefs and culture in which
the company is operating. That is why, it keep changing its preference and policies as per
local social factors (Freeman, 2019). For instance, change in working pattern become
popular and this also make people work from home increasingly and they are relying on
communication technologies.
 Technological Factor: Vodafone is best know for its innovation and it has a mission to
keep following all the contemporary trends. It also have so many rivals but the service
which is provided by the quoted firm will help to go one step ahead. It also focus on all
latest trends of technologies that further help to attract wide range of customers towards it
and gain high market share as well.
 Legal Factor: The company also affected from the legal issues as well such that copy
and other pirated issue. Even he states also blamed it for some legal issues and as a result
it also face many penalties as well. Even, it has been accused of not paying much to their
employees as compared to their competitors (Hill, Jones and Schilling, 2014). Thus, the
company should keep adhering all the laws in order to maintain positive image in market
and thus it will help to gain the trust of the customers as well.
 Environment factor: Due to rise of globalization, people are becoming now more ethics
oriented and they also expected that their favorite brand to be socially responsible and in
the same way the quoted firm also follow sustainability act and helps to protecting the
environment in well manner. This will also leave a positive impression upon the
customers.
Determine competitive advantage using Porter five force model
Porter five force model is a strategic tool that is used to determine where the power lies in
a business and further it also helps to determine the competitive advantage as well. Thus, it is as
mentioned below:
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Threat of new entrants (low): it faces low threat of new entrant though it has been
analyses that new entrant in wireless communication will definitely brings innovation and this
also creates pressure upon Vodafone Malta because the company has to lower pricing strategy,
reduce cost and should provide new value proposition in order attract customers. The company
also tackle this threat by innovating new products and services that help to retain old customers
and attract new customers as well (Hitt, Ireland and Hoskisson, 2015). It also spend money on
research and development so that reduces the window of extra profit for new firm and discourage
them as well.
Bargaining power of Suppliers (low): the bargaining power of supplier is low such that
almost all the companies buy their raw material from different suppliers and they decreases the
margin of Vodafone Malta to earn in market. Such that the impact of higher supplier will lower
down the overall profit of the company and in the same way to tackle this, Vodafone also build
efficient supply chain with multiple suppliers. Apart from this, the company also developing
dedicated suppliers whose business is depended upon the firm. So that it can deals with suppliers
as well.
Bargaining power of Buyers (high): The company has high customer base because it
keep providing new and innovative products to their customers so that they will hold their
buyers. Sometimes it has been analyzed that as buyers demand a lot and that is why they also
want to buy best offers that is available on market by paying the best minimum price as possible
(Kang and Hwang, 2018). Thus it shows that having a large base of customers then it creates
high bargaining power of customers as well and it also leads to increase the ability to seek the
increasing discount as well as offers.
Threat of Substitute (high): the company also faces high threat of substitution such that
when a new product meet similar customer needs in variety of ways, then it affect the business.
In the same way, Vodafone, has a threat of substitute services only if it offers value proposition
which is uniquely differ from present offers in an industry. As the company has to be service
oriented as compared to product oriented and also produces those services by analyzing the
needs of the customers, then it helps to creates positive impact upon customers and also leads to
increase the sales as well.
Rivalry among existing players (high): the company faces high competition in market
and it also affect the overall profitability of the company as well. Such that the firm should build
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a sustainable differentiation and also build scale so that it will compete in better way. To
compete small market, firm should also collaborate with rivals so that it will helps to increases
the market size as well.
Industry scenario facing the company in its existing market domain
The telecommunication industry in Malta could face a shake up and some massive push
also to expand into further generation services. It has been analyzed that the Malta's economic
success could not be achieved if it does not have advance communication infrastructure and the
country become the Vodafone's first venture outside UK that makes Vodafone Malta both
smallest and oldest foreign subsidiary in a group. Apart from this, the industry scenario of the
telecommunication also shows that the mobiles replaces landlines but this is not in Malta such
that around 90% of the people have their fixed lines but in 2016, this is not which means that
Malta's Mobile penetration stood at 135.1% from 128.4% (Malta telecommunication
information, 2017).
But there is suddenly change in year 2016, when SMS are on steady decline in Malta
because of international trend such as WhatsApp, Viber and this leads to solid growth plan as
well. Therefore, it clearly shows the steady increase in the market share of telecommunication
sector in Malta such that at the end of 2016, the number of mobile users are increased up to
171290. Thus, the mobile and fixed broadband market also offers the greater growth potential
and revenue opportunity for the telecom in Malta. Moreover, the customer are also increasingly
expecting to access the information and also use the services on move, smart homes and this
shows the industry has attained a steady growth after the year of 2016 after new and international
trend has been introduces.
Apart from this, there is a key challenge for the telecommunication industry in Malta
such that to maintain fair competition and for this reason, the government also introduce many
laws and the authorities are further committed to play a key part for providing the best service to
their customers (Lasserre, 2017). Now the country also investing technology that can provide 5G
network facility to the customers and also planned to merge between Vodafone and Melita as
well and it has been approved also by the end of 2018. thus, telecommunication industry support
the country's economy and helps to provide better facility as well.
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TASK 3
Describing the extent to which the company is facing strategic drift
Strategic drift is the gradual deterioration of a competitive action which further creates a
result in the failure of an organization in order to respond to changes in a business environment.
In the same way, for the context of Vodafone Malta, the company faces strategic drift in 2014,
because the Malta Communication Authority mobile subscribers dropped by 2%. even there is
slight rise in the number of contract customers by the falling in prepaid users and this also affect
the business of Vodafone as well. It has been analyses that though the Vodafone is one of the
largest mobile operator but its market share also start decline and dropping from 47.99% by the
end of 2013 to 44.28%. Not only Vodafone suffers but the entire market of telecom operators got
affected (Malta Mobile market slowed in 2014, 2014).
Therefore, this strategic drift affected the business in negative ways and its financial
performance start deteriorating because of lower down the market share. But on the other side, in
2016 the quoted firm takes a sudden shift and by introducing their innovative product it again
gains its market share and lead to become the leaders of telecommunication industry.
Mission and vision statement are aligned to demand of marketplace
Mission: the company's mission is to unlock the potential of nature in order to improve
the quality of life.
Vision: To become the leader of communication in this increasing connected world.
Yes, the Vodafone's mission and vision are aligned to the demand of marketplace because
from last many years, the company basically provides the best services to their customers and by
analyzing the needs of their customers, it also produces those services accordingly. This shows
that the company is aligned to a demand of market place. Apart from this, the company keep
offering new innovative products to their customers with variety of discount offers that also
shows that it is aligning to the company's vision. By analysing the needs of the customers and
then producing the same will also helps to maximizes sales and as a result, it will able to sustain
its brad image at global presence (McWilliams and Siegel, 2016). Therefore, this shows that
through its strategic thinking, the company is able to aligned with its demand of a marketplace
and as it has its brand image at global level which also shows that it is one of the leading firm in
market and if it keep providing the same offers at discount rate then it will be able to become a
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leader of a telecommunication. In this ways it shows that the both mission and vision are straight
to the demand of marketplace.
Company's strategic capabilities
To determine company''s strategic capabilities, SWOT analysis is used that helps to
analysis company's strength, weaknesses, opportunity and threats and these are as mentioned
below:
Strength:
 The company have large customer base and it has its brand image in market.
 The company has strong brand building policy and it focuses on delivering differentiated
customer experience through its brand.
 The company has strong advertising that helps to attract wide range of new customers.
 It also has highly efficient website that makes sure to provide easy online payment,
recharge and best service (Meyer, Neck and Meeks, 2017).
 It also provides movies, music through its own application which is most likely by the
customers.
 Vodafone has its global presence such that currently the company operates its unit in
more than 150 countries and also have around 500 million customers that shows that it
has its brand image.
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Illustration 2: SWOT Framework
(Source: SWOT analysis, 2015)

Weaknesses:
 Having a brand image, makes difficult for the firm to follow all the legal proceedings.
 Due to price wars, the company also continuously fight for market share with their rivals.
Opportunity:
 It innovation strategy helps the company to grow by adopting latest and low cost new
techniques into the working area.
 For Vodafone, an untapped rural market is also consider a huge potential.
 By providing better advertising, the company also get positive outlook.
 The firm should also povide 5G penetration into the market at global level so that it will
help to provide opportunity at global level (Pearce, Robinson and Subramanian, 2016).
Threats:
 It faces though competition in market such that it has many rivals.
 New entrant offer low price also affect the profit margin of the company.
 Apart from this, it also faces threats due to mobile number portability to other
competitors will also reduce the customer base as well.
Business canvass model
Business canvass model is that strategic management template that helps to describe
firm's product value proposition, its infrastructure, customers and finance. Further it also helps in
aligning the activity by using potential trade offs as well. For Vodafone Malta business canvass
model is as mentioned below:
Key partners
 Investors
 Network
operators
 Regulator
 Sponsorship
 Suppliers
 Partnership
with Netflix
 Advertising
agencies
Key Activities
 Marketin
g
 Customer
service
 Billing
 Collectio
n
 Maintena
nce
 Innovatio
Value
proposition
 It uses
the
power
of
connecti
vity to
change
the
lives.
Customer
Relationships
 offer C2B
and P2P
transactio
n
 Machine
to
Machine
services
 Fully
Customers
segments
 Mass
Market
 Mobile
prepaid
segments
 Mobile
postpaid
segments
 Large
8

 Developers
 Entertainme
nt Industry
 Local
Mobile
Operators
n
 Research
and
developm
ent
 Content
Acquisiti
on
 Procurem
ent
 Product
developm
ent
 Offer
reliable
telecom
municat
ion
service.
 Internet
of
things.
 Cloud
and
Hosting
services.
 Free
Roamin
g in
Europe
 Health
services.
 Wholes
ale
services
 Converg
ed
commu
nication
 Zero
rating
offers.
integrated
solutions
 Social
media
 customer
service
 Brand
Awarenes
s
 Quality
 User
Communit
y
 Toll free
data
corporate
 Multinatio
nal
organizati
on.
 Public
sector
 Small and
medium
business.

Key resources
 IT
capabiliti
es
 Employee
s
 Partnershi
p
 more than
400
million
customers
at global
presence.

Channels
 Website
 Branches
 Retailers
 Shops
 Dedicated
sales
teams
 Call
centers
 Social
Media
 Vodafone
Group
Foundatio
9

n
 Account
Managem
ent.
Cost structure
 Network
 Peering agreements
 Infrastructure and network maintenance
 Customer services
 Licenses
 Data Centres
 Compensation
 Presence
 Tax
 Royalties
 Copyrights
 Energy
 Content Acquisition
Revenue streams
 Service fees
 Subscription fees
 Prepaid and postpaid mobiles
 Interconnection fees
 Wholesales services
 IT solutions
TASK 4
Describing the possible strategies that the company could follow to defend its core business.
By using Ansoff' growth vector matrix, the company could easily determine its possible
strategies and this is as mention below:
Market Penetration: it is the first strategy that is also used by Vodafone in which the
company mainly sell their existing products into existing market and for this, the company also
spends lot on marketing in order to penetrate their market. In addition to this, it also try to
maximize the use of distribution channels. In order to make attractive deals with a wide variety
of distributors (Protalinskiy and et.al., 2018).
Market Development: In this strategy, the company offers the existing product into new
market and this is also follows by Vodafone as well. In this strategy, the company reach to new
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