Detailed Business Strategy Report: Vodafone's UK Market Analysis

This report provides a detailed analysis of Vodafone's business strategy, examining both internal and external factors affecting the company's operations. It begins with a PESTEL analysis of Vodafone in the UK, evaluating political, economic, social, technological, legal, and environmental factors. The report then applies Ansoff's growth vector matrix to explore market development, product development, market penetration, and diversification strategies. Strategic capabilities are discussed, followed by a VRIO analysis to assess Vodafone's resources and competitive advantages. The report also identifies Vodafone's strengths and weaknesses. Furthermore, Porter's five forces model is used to analyze the competitive environment. Finally, Bowman's strategy clock model is applied to determine strategic direction and options available for the organization.

Business Strategy

Table of Contents
Business Strategy ............................................................................................................................1
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.Pestel Analysis of Vodafone in UK.........................................................................................3
2. Ansoff's growth vector matrix ...............................................................................................5
TASK 2............................................................................................................................................6
1. Strategic Capabilities..............................................................................................................6
2. VRIO analysis of Vodafone....................................................................................................6
...............................................................................................................................................7
3. Strength and weaknesses of Vodafone....................................................................................7
TASK 3............................................................................................................................................8
P3. Analysing the Vodafone using Porter's five force model.....................................................8
TASK 4..........................................................................................................................................10
Strategic direction and options available for organisation using Bowman's strategy clock
model.........................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy is an art or craft which help an organization to achieve its long term
objectives. Is is mostly used to specify the mission, vision, developing policies and projects of
the company. The whole scenario is based on the telecommunicaton company -Vodafone. which
is one of the successful company in telecommunication sector. It operates almost 26 network and
have clients in 150 countries for IT sector.This report is designed to develop the awareness of
different kinds of strategies which help in operational and tactical role of the Vodafone company
as in this competitive world it becomes so difficult to stay and to compete with rivals. This
reports explain about the factors which affect Vodafone's environment internally as well as
externally. This report also determine the key concept of business strategies which focusing on
micro and macro environmental factors. It also explains the porter's five model and how they
affect the environment of Vodafone and shows result which may cause harm for the company. It
also present bowmans strategy clock model which help to show the strategic direction of
Vodafone.
TASK 1
1.Pestel Analysis of Vodafone in UK
Micro environment is marketing terms means to include all those factors that may be
affect the business strategy, decision making and performance. It is necessary to conduct macro
and micro environment to anaylsis its actual position. As macro environment includes
xustomers, suppliers, competitors, employees, share holder and media . To analyse Vodafone
external factors, used of Pestle analysis is neseccary (Cândido and Santos, 2015). Pest analysis is
a strategic tool used to determine external factors which include political, economical, social and
technological.
Political Factor: this factor influences the progress of company. Vodafone must develop
infrastructure to be operational in a particular state. As this factor affect the growth of company,
in many time the peace and political instability of the state may create direct impact on the
company. The aim of UK is to increase level of consumer rights and decisions made by
European Union Regulatory Framework for the telecommunication sector. Thus, the government
involveness which include sudden change in rules and regulation or law may affect the market
of Vodafone operators.

Economics Factor: it is very important factor for Vodafone. Need of opening many
units of the firm is neseccary because many states are developed in the whole world. If the state
has good GDP it means that people has more income and will be susceptible to adopt latest
technologies. In this way, overall profit of the Vodafone increases and it will expands its unit in
different zone. The global economic issue like financial crises has force the company to change
its strategies immediately or soon after.
Social factor : these factors also affect the Vodafone as sudden change in the pattern of
work may help the people to get work from home which increases the dependence on
communication technologies. There are many different issues like going 'green' are also affecting
Vodafone directly or indirectly. As this factor is purely based on local beliefs and culture.
Vodafone has change its preferences and policies as per local social factors.
Technological Factors: Vodafone is so famous for its new innovation in world. As its
mission is to adopt new technologies and applying it on the operations. The product is producing
are related to newly technologies and it is most essential factor which company need to keep in
mind while launching new product and shuffle policies (Brewster, 2017). On the other hand,
messengers is going to affect Vodafone strategy which result to change the plans and commit to
choose the amount of research and development of new innovative products and services to the
market.
Legal Factors: Vodafone is quite serious about his legal issues like copy and its pirated
issue. Even state has blamed many times to the company for legal issue pertaining to the field of
infrastructure and due to this it suffer from lot of penalties. Apart from this, Vodafone has been
founded not to pay good salary to its employees as compared to its competitors. The individual
who work in the company can take leaves or join the other one which maximizes the risk of
leakage of new innovations and ideas (Grover, 2016). In result, Vodafone is always binding with
legal issues in order to increase customers and maintain positive image in market which hell to
keep the same trust on people.
Environmental Factors: as the increase in globalization, there is increment in people's
ethics and consumer also expect something new from their favorite brand to be more socially
responsible and they always want to play better role in betterment for the society. Even the
working condition of the company should be best and attract enough to individual to become a
part of Vodafone family.

2. Ansoff's growth vector matrix
It is strategic planning tool which give a overall view and help executives, managers and
advisors to add more strategies for future growth of the business. Ansoff matrix helps to know
basic strategy position of company and mainly focuses on 4 key factors which are mentioned
below:
Market development: in this, Vodafone may try to target new market with different area
in order to attract many people of new geographical market. Vodafone also uses segmentation in
order to target many people they may be of young or old age, gender and demographic profiles
from usual or old customers. It can also use different marketing mix strategy to understand the
reposition the product. Vodafone can use sales channels like selling online product or direct sale
with discount to increase the sales and attract people.
Diversification: it is basic strategy used by many companies because it is use to increase
the economy scale of the product. There is little scope for using existing item and trying to sell it
in totally different market to people. But this strategy is used to expand business of Vodafone
and it also faced adverse situation or circumstances which may effect the growth of the company
(Martinez-Simarro,Devece and Llopis-Albert, 2015). Even it may tie up with many small
dealers, disrtibutors or retailer to provide services in rural areas. It also sells its product using
franchise and exclusive dealer all around.
Market Penetration: with this approach, Vodafone try to develop new marketing
strategies like sell product in different discount offers, also introduce loyalty scheme in order to
increase the selling. It become official partners with different T.V. Shows in order to promote its
brand. This strategy also helps to buy the rivals company in order to save his brand name and
protect it self. It done so many activities in order to sale the product and even encourages people
to choose his product and use it more by proper advertising. In social sites, Vodafone uses many
advertisement to show his name and brand and become successful leading production in the field
of telecommunication sector.
Product Development: when a company selling different product to one individual then
it became more popular in the market because in this busy routine not even a single person has
time to buy things in different store. But Vodafone offers many things in a single store, which
attract people. It develps many products for easiness and conveince of an individual. The
customer service of Vodafone is best among all telecommunication as they pick customers to the

right time and free them in very short period (Cascio, 2018). They also focus that which product
is on demand and which one can be repackage in order to increase the selling.
TASK 2
1. Strategic Capabilities
In this competitive world, a business competes with one another for customers,
revenue,and even they employ tactics to expand strategies. But it is duty of leaders to give
shape the strategies and put them into the action for business growth. A business strategic
capability is a major component in the financial growth. Even there are many rivals who try to
attempt to measure and track strategic plans of the Vodafone Company. In the context of
Vodafone, it uses different strategies for performing well in market and increase in selling of
product, like they start selling online and give the postpaid and prepaid Sim to the customers in
such a cheap rate, even they attract different people by their offering system where they can give
best offers and buy one get one free option (Amran and et.al. 2016). It also helps in reveals the
overall data in the annual report, from public survey and market trends. However, it is also
proved that not all the company gets the advantages of using this strategic capability when it
comes to developing and employing strategy.
2. VRIO analysis of Vodafone
VRIO Analysis is a technique to evaluate the company's resources. It is used to know
about competitive advantages and weaknesses. It is a complement to a Pestel analysis and used
to assess situation of an organization- its resources, competitive implication and potential
improvement for given resources. It deals with four factors such as value, rareness, imitability
and organization. Resources that meet all the factors can bring about competitive advantages.
The VRIO model particularly useful to analyse a firm's internal environment and evaluation of
company's resources.
In context of Vodafone VRIO analysis is done to know basic resources. And to evaluate
them all four factors are consider which are as follows:
Value: business such as Vodafone, it is not easy to find a suitable place to locate it but it
is quite expensive to hire the place and adjust the basic necessary of the firm. There are many
challenges in valuing the business like change in demographic, technological, cultural and
economic change. It is related to the outcome like increase or decrease in cost, thses things
affect the market .

Rarity: in the context of Vodafone, it is rarity in a firm can lead to competitive
advatange. Rarity comes when a firm has valuable resource which are absolutely unique in all
factors whether they are unique in cultural and from rivals. For Vodafone, it is rare to find
similar product in whole world because it uses different strategic capabilities which is not found
in any other firm.
Imitability: The capabilities of Vodafone is different, it always used its own strategy to
gain more profit and never use it's rival's plan to grow more. Sometimes it is hard for the
company to cop up and get access to the resources, as a result the innovative company who
implement its strategy can gain long term competitive advantages.
Organization: for oganize the company in order to exploit those resources and done
successfully, then the company can enjoy a great advantage. Basic components of the company
are incentives, bonus, stock or salary increase and can also include non- monetary incentives like
vacation days etc. in order to add up all the resources then company definitely goes higher and
can sustained competitive advantages (Cascio, 2018). Without correct organization chosen, even
firm with valuable, rare and imitability can suffer competitive disadvantages.
3. Strength and weaknesses of Vodafone
Strengths of Vodafone is measurement of market coverage of Vodafone which is ranked
395th among the world's top brands. It is known for its wide distribution and coverage of
network. It generates billion of dollars of revenue every year and result boosting the ranking
and expectations and it leads to a successful brand in whole world. As time flows, Vodafone
come up with its new innovation and techniques and grab the focus from customers. With other
telecom operators, it is totally different from its services. Due to its marketing and
communication, users think that Vodafone is best from rest and feel proud to be a user of
vodafone. As a result, it is considered the best operator and get some premium from their
customers. The brand valuation of Vodafone is 28 billion dollars in 2016. Besides, its equity is
also high. It also uses its national and international submarine cable in order to get more
business, this cellular company tied with many international sports. It also has its unique quality
of advertising campaign and also introduced Zoozoo concept which linked people with each
other.

On the other hand, Vodafone also have many weaknesses like the subscriber base of the
company which is dropping from last few years and is the main problem at the global market
scenario. It needs more strength and core values with implementation of new strategies to
acquire more customers. Dropping subscribers user is happen due to decline in brand valuation.
Initially at the starting time, both subscriber base and brand valuation was strong but it may
affect from last 2 years and reduces its valuation power. It also loss share in USA and did not
perform well in many countries due to brexit and many other economical conditions which result
it is not generated much revenue. Many departments of the company are not so effective that
result in failed to provide the latest information and solution of their own product. It is also not
having proper distribution service channels in order to provide product to those who as living
very far to the country. The biggest weakness of this cellular company that it is still not link to
rural market, as there are many peoples who live in rural areas.
TASK 3
P3. Analysing the Vodafone using Porter's five force model
Porter's five model help to analyse the factor that influence the nature of competition. It
deals with five factors which determine the level of competition of a firm within industry. This
model is useful because it may affect the environment directly or indirectly which leads to effect
on the profitability of the business. Strength of these forces may leads to lower profitability of
the company. Thses 5 factors are :
Bargaining power of buyers: In telecommunication sector, Vodafone have very strong
buyers as compares with other company. These powerful buyers can reduce the price but not past
the level of their closest rivals. This proves that Vodafone has a biggest profit with average
returns compared . Having such a good power of buyer, may help to make Vodafone financial
strong and can lead to more success (Brewster, 2017).
Bargaining power of suppliers: it also have large supplier power from yhe company
operates with great margin as compared to its competitors which in turn absorb them the prices
increase from its suppliers . By being a large and focused player in the field of
telecommunication, Vodafone hold down the suppliers cost to make the profit even if its rivals
are making average returns. Suppliers can affect the financial growth of the company as the
fewer suppliers may affect the strong position of the company.

Threats of new entrants : If it takes little money and effort to enter the market and
compete effectively must take little protection related to new technologies then competitors can
quickly enter the market and weaken the position .To make attract towards the product,
Vodafone continue to reduce the cost below its competitors. Many companies wish to enter the
market must pay huge amount of license fees to maintain the regulations of the company.
Similarly, as the new cost of new network infrastructure are high, and rapid change in
technologies make difficult to cope with new entrants (Cascio, 2018). But Vodafone make it
easier by maintaining the high level of efficiency of its services.
Threats of substitutes: Vodafone faces threats for the product and services. The landline
services are fast declining while broadband services are fast growing and common. The focus
cost leadership strategy that vodafone perates makes it difficult to produce new product with
such a low range by their excellent use of economies of scale, as it have high buying power and
their absorption of temporary price may increase that come from suppliers which do not need to
passed to the consumers.
Rivalry withing the market: Vodafone faces extremly high rivarly from its competitors
due to low call rates price charged by its closest rivals. Similiarly, the competitors constantly
provide many innovative product and services to the consumers that means Vodafone has to
provide it as it is to them.
In order to improve the competitive edge and market position there are many strategies
which adopt by Vodafone such as, it use smart supply chain management to distribute its product
in the market, it gives its best service to the customers and did not take their too much time.
Vodafone always uses its different ideas and innovation to their product and help to make its
connection wide. It also protect the patent technology so that no one can leak their market
stratgies in front of the rivals (Amran and et.al. 2016). Always invest in productivity and tries to
improve with their existing product. To improve the competitive positioning organisation focus
on its 4 different point which are – supply chain, innovation, manufacturing and marketing –
sales. In the context of Vodafone compmany, it keep focus on these four in order to gain more
profic and increases it sell. Vodafone differnciate from other company in all form like it takes
less time of delivery, upgrade from the latest technologies, rethink on the manufacturing model
and existing product.

TASK 4
Strategic direction and options available for organisation using Bowman's strategy clock model.
Strategic direction is the mots important forces within business which establishes the
structure for the internal business responsibilities that each department and workers within
organisation will take on. Company tends to analyse and create strategic direction that lead
towards accomplishment of goals of organisation' strategy (Cândido and Santos, 2015). In this
context, Vodafone is international business environment which has also achieved growth in
market due its clear strategies and well organised course of action which has provided the
support in accomplishment of goals and business objectives. Bowmans strategy clock model is
used to analyses the designing of marketing strategy in comparison to the offering of
competitors. Vodafone uses the Bowmen strategy clock as a framework for creating an edge
against the competition (Bowman's Strategic Clock.2017). It help to show the relationship
between customer value and prices . Allocation of resources and continuous evaluation of
growth towards the strategic goals and objectives are considered as key features of well directed
business enterprise. In order to determine the strategic business direction of enterprise,
Bowman's strategy clock model have been discussed which has been used to explore various
kinds of alternatives for positioning the business of Vodafone in most appropriate and strategic
directions in telecommunication sector. This models is widely being used by organisations to
demonstrate 8 important business strategies such as:
Low prices and low added value: It is analysed as less competitive strategy in which products of
organisation will be differentiated in market at low quality and low cost. Usually this strategy
will be adopted by organisation at initial stage in order to get response of customers but in long
run it will not tend to provide profitability (Ghezzi, 2013). In order to sustain business
operations in competitive business environment, this strategy has been widely used companies in
regulation of their business operations.
Low pricing: Most important and competitive strategy which implies to sustain business by
reducing the prices of products and services in market. More likely customers will tends to buy
products and services which are available in high quality at competitive prices. Competition
amongst organisation in telecommunication sector with low price presence is very intense which
often involving price problems.

Bowman's strategy clock model
(Source: Bowman's Strategic Clock (Strategic Positioning), 2017)
Hybrid: It implies towards position in which company offers products at low prices but offers
products with the high and perceived quality than the other competitors. Sales volume will be
issues in this but companies build reputation of offering fair prices for reasonable products and
services. For example; TESCO and ASDA are two discount store which pursue this strategy.
The quality will good and consumers will be assured of reasonable prices.
Differentiation: It involves companies that differentiate offers for their customers with high
perceived values in order to be able to afford to accomplish this they either increase their prices
and sustain themselves through the higher margins and keep their price low and seek greater
market share (Scholes, 2015.). Branding is considered as very important because it allows
Vodafone to become synonymous with the quality as well as price point.
Focused differentiation: This strategy tends to be adopted by enterprise when they will desire
to position their products and services at high prices levels within the market share where the
consumers buy products due to its perceived values. For example: Apple has adopted this
strategy because their products have high perceived value among customers in market. This
strategy will help in increasing brand image of organisation in market and provide competitive
edge over rivals.

Increased Price and Standard Product: sometimes Vodafone may take chance and
increases the price without adding any extra features but if the the price are accepted by the
customers then company may enjoy the higher profit but on the ther side if it is not then the sahre
of company may fall, until company make an adjustment to their prices or value. This strategy
cannot help for life longer as this is not justified price of the product ans it may cause harm to the
position of the company.
High price or low value : it is also termes as monopoly which means that the strategy
may implemented in market where only single company can offer gioods and services but they
did not added the best quality and value to their product or services . Monopolies do not last for
very long terms because in the world new company start entering very soon and companies are
force to compete on higher level
Low value or standard price : if the vodafone have low value product or services then
only way company will see its is on price. In the context of Vodafone, if it may sell the product
in low value and the quality of its item is best then it may lead to loss in financial term but on
contrary, it sell on high value and best price then it is easy to make new customers and the level
of company may increases in order to maximses more profit.
From overall, Vodafone uses the hybrid part because it will help to sell the product in
average range with offering different types of discount, this can attract the customer to buy more
product with one store. As above discussed, hybrid means selling the product with offering
various types of discount and may apply the policy of buy one get one free, thses are some offers
which may attract the customer to encourages them to but product from this store only and
Vodafone always keeps try to attract more and more customers in order to make itself popular
among other rivals and gain more profit to achieve its target.
CONCLUSION
Business strategies actually helpful in giving the right ideas and new innovations in order
to run the company and take it in another level. From the above report it is concluded that
Vodafone have its strength and weakness and there are many factors which affect the company
by externally as well as internally such as political, social, technological and economical factors.
This report also analyses the stratgic capabilities help in VRIO model in order to get more
success in telecommunication sector. It also gives the porter's five model which help in