Vodafone's Business Strategy: Macro, Micro, and Strategic Analysis

This report provides a comprehensive analysis of Vodafone's business strategy. It begins with an introduction to business strategy and its importance, followed by an examination of Vodafone's vision and mission. The report then delves into the impact of the macro environment on Vodafone, utilizing PESTLE and Ansoff matrix models to analyze political, economic, social, technological, environmental, and legal factors, as well as market penetration, development, product development, and diversification strategies. Next, the report assesses Vodafone's internal environment and capabilities, defining strategic capability and employing the VRIO model to evaluate Vodafone's resources. It also identifies Vodafone's strengths and weaknesses. The report further analyzes the telecommunications industry using Porter's Five Forces. Finally, the Bowman Strategic Clock Model is used to analyze Vodafone's strategic direction. The report concludes with a summary of the findings and references.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and influence of macro environment on Vodafone....................................................1
TASK 2............................................................................................................................................1
P2 Assessment of Vodafone internal environment and capabilities............................................1
TASK 3............................................................................................................................................3
Five Powers on the Tele communication organization. ..............................................................3
TASK 4............................................................................................................................................5
Bowman Strategic Clock Model.................................................................................................5
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Business strategy refers to high-level plans formulated by the top management of
organisations which helps them in gaining competitive advantages through which they enhance
their business growth and development (Astrachan, 2010). To sustain in the competitive
environment, it is essential for the business organisations to devise precise and efficient
strategies.
In this context, the focus of assignment is on different kind of strategies which are used in
operational, tactical and strategic roles for an organisation. In United Kingdom, mobile
telecommunication sector is growing rapidly and this concentrates on analysing business strategy
by focusing on Vodafone one of the leading mobile telecommunication companies. The impact
and influence of macro environment on Vodafone is analysed by using precise strategic models.
An assessment of internal environment and its capabilities will be made in this report. The
competitive analysis of Vodafone will be made in this assignment and eventually with Bowman
Strategic clock model analyses of its strategic direction will be made.
Vision of Vodafone: To be the communication leader in an increasingly connected world.
Mission of Vodafone: To enrich our customers' lives through the unique power of mobile
communication.
TASK 1
P1 Impact and influence of macro environment on Vodafone
Macro environment is the external environment that surrounds an organisation. External
environment includes political, legal, social, economic, environmental and technological factors
that greatly affect the business organisations. To gather deep insights of these factors which
affects Vodafone business strategy, two renowned strategic model will be used which are
PESTLE and Ansoff growth vector matrix.
PESTLE model for environmental analysis
 Political Factors: Political factors refer to the governmental policies laws, legislations
and regulations. Political factors greatly influenced the business strategies and operations
of Vodafone (Meskendahl, 2010). To sustain in the market economy of UK, Vodafone
has devised precise strategies and plans. The main political factors affecting Vodafone
include EU Roaming Regulation that aims to decrease charges for mobile phone usages
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abroad by 70% and increasing level of consumer rights within Europe, and decisions
made by European Union Regulatory Framework for the communications sector.
 Economic Factors: Economic factors include the economic policies, inflation rate,
unemployment rate, fiscal policies, GDP level, etc. which affects the strategy of
Vodafone directly and indirectly. Due to BREXIT, the economic condition of United
Kingdom becomes unstable affecting majority of business organisations operating in the
country (Woodcock, Green and Starkey, 2011). Thus, in order to survive in unstable
economic condition of United Kingdom, Vodafone has formulated strategies to expand
their operations and increase their target customers.
 Social Factors: Social factors are the tastes and preferences of consumers and society of
the country. Due to enhancement in mobile telecommunications systems, many new and
emerging mobile companies stems out in United Kingdom, giving stiff competition to
Vodafone. Consumers are diverting towards companies which provides high-speed
internet and many facilities at reasonable cost affecting business of Vodafone (Chang and
Chuang, 2011). Thus, this factors needs to be considered appropriately in order to fulfil
the need and expectations of customers.
 Technological Factors: Technological factors involve technological growth and
development. Vodafone has been famous in the world for its innovation since a long
time. Vodafone has its mission to always follow the contemporary trends in technological
and communication sphere. With the raise in 5G technologies, Vodafone business
strategy has been greatly affected.
 Environmental Factors: It is the duty and responsibility of the business organisation to
contributes to protect the natural environment and resources. Vodafone has a vision of
zero environment harm safety culture in which they focused on using renewable source
of energy in majority of their departments (Hsieh and Chen, 2011). Furthermore, as a part
of their corporate social responsibility, management has led many campaigns to aware
people about the importance of environmental protection.
 Legal Factors: Legal factors include the corporate and national laws, legislations,
regulations and policies. In order to conduct business operations in United Kingdom,
Vodafone has to follow certain laws and legislations. The management is required to
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follow Data Protection Laws, Employment Rights laws, Consumer health and safety
legislations, etc. This helps them to avoid any legal uncertainty.
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Ansoff growth vector matrix
Ansoff growth matrix helps the business organisations by providing a roadmap through
which they can enter a new market or launch a new product.
The Ansoff Growth matrix for Vodafone is described as below:
Market Penetration: Market penetration occurs when marketing of existing products are done
in a way which helps the organisations to enhance their market share (Boyer, Frank and Van De
Vanter, 2010). This is also considered as minimal risk strategy as Vodafone has to do is to
enlarge their marketing efforts and improve on its marketing share. In simpler terms,
management has to ensure that it leverages the current capabilities, skills, resources and gears
towards a growth-oriented strategy.
Market Development: Market development occurs when organisations seeks to expand into
new market with their existing products. For example, Vodafone desires to enter Indian markets
with their existing products means that Vodafone is following market developmental strategy.
Market development is considered as more risky than market penetration as firms has to put
enormous efforts in comprehending the new market, devising marketing strategy and targeting
segmented customers (Brewster, 2017).
Product Development: Product development is the strategy of developing new product in
existing markets. Vodafone followed this strategy in United Kingdom by innovating and
providing new products to the customers of United Kingdom. This strategy is considered as
optimum strategy which helps the organisations to sustain in the competitive environment. By
leveraging brand image and values, firms developed new products in order to increase the
customer base and profits of companies.
Product Diversification: Product diversification occurs when firms launch new products in new
markets. This is considered as risky strategy as in order to that, firms must have robust brand
image and values (Brewster, 2017). Here, the maximum efforts are laid on marketing and
product development. Vodafone in order to launch new products in new market must have
extensive knowledge about the particular markets.
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TASK 2
P2 Assessment of Vodafone internal environment and capabilities
To sustain in a competitive environment, firms must have a robust internal organisational
structure with proper allocation of resources and adequate use of internal capabilities.
In this context, an assessment of Vodafone internal environment and capabilities are described
below:
Meaning of strategic capability
Strategic capability refers to the business ability to meet competitive strategies that
enables them to sustain and enhance their value in period of time. Strategic capability takes
business strategic decision into account and concentrates on organisation assets, resources and
market positions (Boyer, Frank and Van De Vanter, 2010). A business strategic capability is
most essential and crucial element in remaining financially viable and thrives despite the
presences of competitors. The strategic capability refers to the process of utilising organisational
resources, skills, capabilities, assets in a precise and appropriate manner so that the desired aims
and objectives of the organisation can be accomplished effectively and efficiently.
VRIO model to determine the strategic capabilities possessed by Vodafone
To analyse the internal capabilities and resources of firm, VRIO framework model has
been used. It was developed by Jay B Barney in 1991 and is considered as a precise model to
analyse the strategic capabilities of firm. In this context, the analysis of internal capabilities of
Vodafone is described as below:
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 Value: The resources utilised by Vodafone are indeed valuable which helps them to gain
competitive advantages. This resource includes financial resource, human resource,
physical resource and information technology resources (Hsieh and Chen, 2011). The
resources are partly competitive and provide competitive advantage to Vodafone. Thus,
from the analysis it can be understood the resources implemented by the Vodafone are
valuable which helps them to sustain in the competitive environment.
 Rare: From the analysis of internal capabilities of Vodafone, it was identified that the
resources implemented by the organisation are rare that helps to provide temporary
competitive advantages (Chang and Chuang, 2011). The resources are implemented in
the precise manner so that the common goals and objectives of the organisation achieve
effectively and management will able to thrive. This resource is not rare as Vodafone’s
biggest multinational competitors also have substantial capital or can raise cash at will
 Imitable: The resources employed by the management of Vodafone are rare and
expensive which are difficult to imitate by the competitor organisation. From further
analysis, it was identified that Vodafone uses their own-patented resources to enhance the
effectiveness in the quality of products and services provided by them (Woodcock, Green
and Starkey, 2011). This helps them by providing them a competitive environment
through which they are able to accomplish their aim and objectives.
 Organised: The resources employed by the management of Vodafone are partly
organised and exploited by the organisation. In order to sustain in the competitive
environment, it is essential for the management of Vodafone to allocate and exploit the
internal resources in an appropriate and precise manner (Meskendahl, 2010). From the
analysis, it was identified that the human resources employed within the organisations are
not organised in effective manner thus affecting the internal capabilities of the company.
Strengths and weaknesses of Vodafone
In this section, the strength and weakness of Vodafone will be identified. This will help
in assessing the internal environment and its capabilities more effectively and efficiently.
Strengths Weaknesses
 Massive Market Coverage
 Higher Revenues
 Dropping subscriber base
 Dropping Brand valuation
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 Effective Marketing
 Premium costs
 Subscriber Base
 Brand Value and reputation
 Losing market share in UK
 Poor performance in Europe
Strengths: The strength of Vodafone is massive market coverage across UK and all over the
world. With its quality products and services, the management is able to generate higher
revenues. Furthermore the management of Vodafone is known for its effective marketing
strategies which help in attracting more and more customers towards it. Its subscriber base is
enormous which helps the management to sustain in competitive environment.
Weaknesses: Due to current political instability and rise in mobile telecommunication
companies, Vodafone subscriber rate is diminishing rapidly. Not only in UK but also in India
and US, the subscribers are decreasing due to higher competition. Due to its poor performance in
Europe, the management have dealt with losses and losing subscriber rate (Astrachan, 2010). As
mobile telecommunications companies are keep on increasing in United Kingdom, customers
prefer other companies as they provide cheap and effective services as compared to Vodafone.
TASK 3
five powers on the Tele communication organization.
This is helpful in order to determination of the external position of the company. Thus, it
can be said that this five forces are having direct effect on strategic competitiveness of operation
of Vodafone. With the assistance of this, the working of the endeavor can be comprehended in
the viable way. This is defined in the following manner as are-
Bargaining power of consumers- The buyer in the mobile telephone industry are very
strong. The powerful buyers can buy the product at the high prices. In addition to this, it can be
said that the braining power of the buyers in the industry like Tele-communication is high due to
cutthroat competition and lack of differed products in the market. The strong buyers in the
market work as to reduction in the prices of the products though not to level of its rivalries in the
market (Blondiaux and et.al., 2017). Due to this kind of situation Vodafone is able to make
reasonable profits as compare to its competitors in the market. With the assistance of this, the
firm is capable to do its exercises in the well and productive way. This is useful in connection to
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deciding the focused disputation in the market. By knowing the quality of the firm, the business
venture can play out its exercises in the market in powerful and effective way. The request of
the customer mirrors the situation of the firm in the market. The efficiency and gain-fullness are
both the elements which converges each other (Blondiaux and et.al., 2017). With the assistance
of this the firm is capable to embrace its business exercises in the powerful and effective way.
Threat of substitution- -In portable media transmission there are different number of substitute
accessible in the market. With the assistance of the undertaking, the business enterprise need to
take initiatives to have the modification in the products as it is helpful to enlarge the profitability
and productivity (Gray, Smart and Bennett, 2017). By bringing advancement in the products, the
firm can attempt the business exercises in the correct way. TWith the assistance of understanding
the need of the customer the firms can capable to perform their work effectively and efficiently
in market.
Threat of new entry- In this it can be said that Vodafone is facing threat for its product and
services in the market. In order to cope up with this Vodafone need to work with the cost
leadership strategy in market. With the help of maintaining the high level of efficiency they are
able to maintain sustainability of firm in market for longer period (Burke, 2017). The present
market is extremely aggressive to manage it is fundamental to understand the need of the
customers. There are number of firms accessible in connection to discourse with the
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competitions of the market it is fundamental to experience business exercises adequately. By
having rapidly changes in the products becomes difficult for new entry as they have to pay huge
amount of license fees.
Bargaining power of supplier- Vodafone suppliers are having the high bargaining power so
that firm can able to operate its function with the high margin as compare to its competitors. In
the market the capacity of business undertaking can work its business work in the best and ability
mode (Amato and et.al., 2017). The solid provider of the firm will fill in as to effect the
productivity in the market. Thus, it can be said that Vodafone can easily maintain the low prices
from their suppliers and they are able to make their profits in continue manner.
Competitive rivalries- They are facing the extremely high rivalries as compare to their
competitors due to the low prices charge by it the closest competitor in market. Thus, rivalries in
the market are taking various kind of initiative in order to provide innovation products to its
customers (Gordon, 2017). The modification in the product will be helpful in order to attract the
large number of the customer in the market. Focused contentions The Mobile Tele-
communication organization is having the different firm who are aggressive to it. Under this they
have to deliver those items which will be useful to manage the different system supplier in the
market as are GIFF-GAFF, EE, and BT etc.
TASK 4
Statement on Bowman Strategic Clock Model
It is a model to analyse the competitive position in the market. The main of bowman
strategic model is to perceive the value of the product (Gray, Smart and Bennett, 2017). This is
one of the compelling setup which is useful keeping in mind the end goal to decide and break
down its focused position. It is the sort of diagrammatic introduction which is useful with a
specific end goal to decide huge connection between the customers and costs.
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Illustration 1: Bowman strategic model
(Sources: Bowman's Strategic Clock (Strategic Positioning). 2016.)
Bowman system show is utilized to characterize the key position to examinations the
vital position of the organization in showcase. Under this model, the non-specific procedures
should be utilized which is useful in connection to contend with the adversary firm in the market
so consumer loyalty can be improved (Blackburn, Hart and Wainwright, 2013). It is the clock
demonstrate which is useful keeping in mind the end goal to investigates the alternative for key
situating that is the way items ought to be situated and it is useful with a specific end goal to give
the most focused position in advertise. By giving the great and administration on the viable costs
rates they can pull in the customers in the market. With the help of implementation of Bowman
strategic tool the firm is bale to bring improvement in the quality of services. This kind of things
helpful in order to attract the customer in the market. With the help of suing of the precise
strategies the entity can able to have systematic operation in market.
Under these, there are different sort of non-specific systems as may be-
 Cost initiative
 Item separation
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