Corporate Strategy of Vodafone: Business Environment Analysis

This report provides a comprehensive analysis of Vodafone's corporate strategy within the telecommunications industry. It begins with an examination of the external business environment, utilizing a PESTLE analysis to identify political, economic, social, technological, environmental, and legal factors impacting the sector. Furthermore, it employs Porter's Five Forces framework to assess competitive rivalry, the bargaining power of buyers and suppliers, the threat of new entrants, and the threat of substitutes. The report then delves into an internal analysis of Vodafone, evaluating its resources and competencies, including physical, human, and intangible assets. This internal assessment is further evaluated using the VRIO framework to determine the company's competitive advantages. Finally, the report concludes with a TOWS matrix and SAF strategies, offering recommendations for Vodafone's future strategic direction, considering factors of suitability, acceptability, and feasibility.

CORPORATE STRATEGY
OF VODAPHONE

Table of Contents
INTRODUCTION...........................................................................................................................3
Main Body.......................................................................................................................................3
Q1. Analysis of Business Environment of Telecom Industry......................................................3
Q.2 Internal analysis of Vodafone...............................................................................................7
Q.3 TOWS Matrix and SAF of strategies for Vodafone...........................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Corporate Strategy aims at making decisions by implementing many strategies. Strategies
are planned according to the overall evaluation of the business and to create most of the value. Its
main components are resource allocation. Design of organization, managing the portfolio and
strategic trade-offs (Rizomyliotis and et.al., 2020). Vodafone Group is a leading telecoms and
provide different technology services which also has a wide experience of connectivity,
convergence and internet and also provides services of mobile financing to boost up in the
emerging markets.
The report will analyse the business environment with the help of external analysis by describing
the opportunities and threats to the telecom industry. The research will be followed by evaluating
the internal resources and competencies to the company. The report will be finalized by
describing the SAF strategies (Suitability, Acceptability and Feasibility) with the help of VRIO
model.
Main Body
Q1. Analysis of Business Environment of Telecom Industry
The main aim of telecom industry is spreading messages over long distances. Today, this
is done by various means like telephones, televisions etc. there are numerous factors which affect
its services (Sako and Zylberberg, 2019). Some of them have positive impacts which give them
opportunities while some of them become the threats. Depending on their impact, they are
described according to the factors of Pestle Analysis which are as follows:
Political
The political disturbance within the countries can create a problem to telecom company
to expand itself. For example, if a country is advancing in terms of social networking, but the
other country does not allow its users to use those sites, then it becomes impossible to provide
services to those people.
The regulations and the taxes imposed on the service providers also became threat to industry.
They will not be able to provide services with freedom. The political laws becomes barrier to
their expansion.
Economical

The financial stability of the consumers decides the numbers of consumers investing in
the telecom services. When the economic condition of the people is good, then only they will
prefer getting these telecom services. The telecom services will be provided only in the regions
where the people are financially stable. It becomes opportunity to provide services in the
economically stable regions but on the other hand, the economic condition becomes a threat to
telecom industries as they will not be able to provide the services in the areas where people are
not financially stable.
Social Factors
When the society in which the service providers are providing the services is stable
socially, then they will realize the need for using the social networking sites. They will
communicate and fulfil their purposes by using the advancements in telecom industries (Ahmadi,
Petrudi and Wang, 2017).
The services like mobile phones, emails, digital marketing will all be expanded in only those
areas where the people are broad minded and socially active. So, social factors will give
opportunity to the telecom service providers to boost their services in the developed areas where
people need mobility and comfort.
Technological
Technology plays a big role in the growth of telecom industry. To increase the
productivity of any business, the use of advanced technology is required which is provided by
the services of telecom industry. The technological trends provide many opportunities to the
telecom sector like expanding their services like IOT, clod computing, biometrics, remote Wi-Fi
and many more. The main impact will be expected by the 5G which will create many
opportunities like it will solve the issue of the speed of internet and the service providers will be
providing 2G to the backward areas which will satisfy the people living there.
Environmental
These factors including climatic and weather changes slow down the telecom services.
So, it becomes a threat to the service providers as they have to resolve these issues otherwise

they will not be able to provide their services in the coming years because the inefficient services
can break the customers. They also have to make devices which can bear the climatic alterations.
Legal
There are many laws including the common labour, employment and many more which
can create risks to the telecom industry (Rugman and Verbeke, 2017). The telecom providers are
pressurized by the telemarketing laws to introduce only those services which comes under the
norms of the county.
The laws and the acts become a threat to the telecom industry as they cannot expand their
services with freedom and the laws are not same in every country. It can be possible that the
services follow the laws in which it was introduced but does not follow the laws of the country in
which the service is to be provided.
Besides these external factors, there are many more factors which decide the progress of telecom
industry. These factors are the Porter's 5 forces which are as follows :
The above figure shows the Porter's 5 forces.
Figure 1: Porter's 5 Forces

Competitive Rivalry
The degree of rivalry is high in those areas where there are options of the substitutes and
the power of buyer and supplier is high. Sometimes, being unable to compete in the industry,
some organizations will to exit the industry. So, the industry faces a threat due to high exit
barriers (Rashidirad and et.al., 2017). The requirement of more finance for the entry in the
industry also proves to be a threat. The offers launched by any company will be counter-attacked
by the new offers by competitive company. So, the company faces problem of taking advantage
by innovation. This increases the rivalry among the companies.
Bargaining power of Buyers
The bargaining power of consumers is high only when choices of technology increases.
The various means of communication are accessible to the customers like emails, messaging
which have lowered the demand for voice message services. So, the buyers take this advantage
and their high power becomes a threat to the telecom providers.
Bargaining Power of Suppliers
This is decided by the supplier's concentration and the supplied inputs. The power of
supplier is high when the supplier has many providers to provide its services and the buyers are
restricted to gain the services because the telecom equipment makers are not in large number.
They are mainly the one who manufactures switch boards, fibre optic cables, network
equipments etc.
Earlier, in telecom industry, the bargaining power of supplier was moderate as the demand is
falling due to excess capacity, so they had to negotiate with the company. But, nowadays when
the demand for fibre optic cables is increasing they have to buy it at high prices also. It proves to
ba threat to the service providers of telecom companies.
Threat of New Entrants
This is based on the entry barriers of market. Threat to new entrants is high as the new
entries need a higher capital to own any company (Cosenz and Noto, 2016). So, the companies
take this as an opportunity to boost themselves and compete only among the existing
competitors. They have to use unique technologies in their services to make themselves unique

among the existing ones. There are barriers for the new entries as they doesn't have enough
capital to introduce and maintain a physical network. So, the existing players can take advantage
of this barrier.
Threat of Substitutes
This impacts the telecom industry in a significant manner as it becomes very easy for the
consumers to substitute the product. Due to technological advancement, the landlines are
replaced by wireless mobile phones, the voice calling is now getting replaced by the instant
messaging and the emails. So, this becomes the biggest threat for the telecom industry. For the
convenience and mobility, consumers are shifting to the wireless technologies.
So, the telecom companies must make use of the opportunities and must try to resolve the threats
to be able to emerge in this competitive industry.
Q.2 Internal analysis of Vodafone
Resources Of Vodafone
Physical resources: Products and services: Vodafone provides a wide range of products services such as
Handsets, Smartphones, Company branded smartphones and voice and messaging
services which basically covers all data as well as fixed line devices and solutions for
customers covering their complete communication needs. For European consumers, the
company provides a range of mobile phones, fixed broadband services, TV, and a
dedicated IoT network- V by Vodafone. It also provides secured IoT solutions, Cloud &
security both public and private and carrier services. There has been a declining usage in
some of the brand products and marketing is not effective(Kerl, 2018). Technology and resources: These primarily include telecommunication licences that
Vodafone holds, Related networking infrastructure that enables Vodafone to operate the
telecommunications network across the globe. The company has established an extensive
coverage of networks with more than 200,000 sites of base stations for transmitting
wireless signal which provide high download speeds up to 30 Mbps. The company has
built a Gigabit Society via hyper-connection creating social and economic benefits

through digital developments. 4g is enabled in all the markets and 5G is commercially
available in 8 European countries.
 Locations: Vodafone manages business operations in 22 countries and 3 geographic
regions primarily Europe, US and the rest of the world. This has enabled a worldwide
service reach with 43 partner markets, 75 countries containing IP-VPN and 170 countries
of 4G roaming. Despite its strong technological infrastructure, the position of Vodafone
in the US is weak. US being a leading telecom market can be a huge source of revenue
but Vodafone has not been able to achieve growth there.
Human resources:
The key people, employees and other workers are valuable resources for the company. The board
of Vodafone consists of–Chairman, Chief Financial Officer,Chief Executive, Non-Executive
Directors, Company Secretary who provide entrepreneurial leadership and develop group
strategies through executive management within a transparent governance framework. The
employees of Vodafone are highly skilled and valuable. In FY20 around (2,963 people were
employed full-time with 11,244 contactors of a diverse 136 nationalities across 21 markets. They
are the strength of the company who work productively and under the “spirit of Vodafone”
towards achieving business objectives.(Kleiousis, Valsamidis and Tsourgiannis, 2019)
Intangible resources:
 Goodwill and Brand value: Vodafone has established itself as a leader of global
telecommunication provider and achieved high goodwill over the years.
 Stakeholder engagement: There is appreciation of the fundamental need for a holistic
view of the business and promotion of strategies takes account of broader operating
environment. Directors focus on the insights of stakeholders and promote discussion of
potential opportunities and risks in business and evaluating the potential effects on
stakeholders. The integration of acquired Liberty Global assets was a strategy to become
fully convergent in Europe and boards focusses ion the interest of stakeholders to drive
revenue growth and operation of margin in core markets.
 Licences and spectrum, Trade secrets, trademarks and patents of the company value a lot
and has helped it grown in a distinct way over the years. The idea of “Vodafone zoo-
zoos” is an example of its unique brand image.

The strengths of Vodafone are :
 Strong technological infrastructure
 Wide range of Products and services
 The Human capital of the company
 Established Brand value and Goodwill of the company
The weakness of Vodafone:
 Its inability to tap the US market in-spite of good technological infrastructure
 Declining usage of its own- brand of mobiles and certain services due to high pricing
strategy.
Competencies of Vodafone using VRIO
Valuable Rare Inimitable Organisatio
nal support Competitive effects Performance
Yes Yes Yes Yes
Sustained
competitive
advantage
Yes Yes No
Temporary
competitive
advantage
Above Average
Yes No Competitive rivalry Average
No No Competitive
disadvantage
Below average

From the VRIO Framework it can be evaluated that all physical resources are considered highly
valuable. All its products and services for European consumers, range of mobile phones, fixed
broadband services, TV, and a dedicated IoT network- V by Vodafone. And its technological
infrastructure and IoT solutions are also valuable. Human resources which provide product
services and strategic management are considered valuable and helps them to achieve the
competitive advantage (Ariyani and Daryanto, 2018).
The global brand image which provides Vodafone with huge customer base is a rare aspect and
distinguishes it from others. Vodafone brand is considered for its prompt services with highly
specialized process of unified mobile services. By applying the effective low cost pricing policy,
Vodafone achieves a temporary advantage in competitiveness. It doesn't give any sustained
competitive advantage as better product and market development is required to attain that.
Thereby, applying the product development strategy and practising an aggressive marketing
strategy, The company may attain competitive advantage.
Q.3 TOWS Matrix and SAF of strategies for Vodafone
Strategies:
SO:Vodafone has an extensive operations' infrastructure across its extended network and there is
high revenue generation. This strength can be used to grab new markets and expand its
Broadband services. By expansion geographically in intense manner, Vodafone can achieve the
advantage for expanding its 5G services with fast speed and offer good speed internet to new
social media users.
WO:Currently, due to its high pricing policy, it is unable to explore new customer base. Its
strong infrastructure is not supporting its growth in US, so new marketing strategies should be
devised accordingly. New marketing strategies to tap US market using 5G technology should be
worked upon and improving products and services with focus on usage and remove unnecessary
variants.

TS:Brexit impacts can be minimised through Good brand value and network. Legal restriction
can be combatted by patents and trademark. (Dandage, Mantha and Rane, 2019)
TOWS Strengths
 Strong technological
infrastructure
 Products and services
 Human resources
 Goodwill and Brand value
Weaknesses
 Its inability to tap the US market
in-spite of good technological
infrastructure
 Declining usage of its own-
brand services and high pricing
strategy.
Opportunities
 Expansion in financiall
stable countries
 Strong technology
infrastructure for
upcoming services like
5G
 Growth of social media
usage.
S-O
 Geographic Expansion for
broadband services
 Using the 5g infrastructure
to capture US markets
W-O
 New marketing strategies to tap
US market using 5G technology
 Improving products and
servcices with focus on usage
and remove uncessary variants.
Threats
 Climatic changes
 Legal restrictions
 Political disturbances
like Brexit
S-T
 Brexit impacts can be
minimised through Good
brand value and network
 Legal restriction can be
combatted by patents and
trademark.
W-T
 Change its products and services
which are not generating revnue.
 Lower pricing strategy should be
adopted in times like corona
pandemic and Brexit.
WT:Change its products and services which are not generating revenue. In order to limit their
weaknesses of their high pricing policy and less attraction from the customers , Vodafone can
conduct an extensive market audit to determine the best pricing strategy which is acceptable by
the consumers. Lower pricing policy should be adopted in times like corona pandemic and

Brexit. After determining a pricing strategy Vodafone should cut the cost of the operations to
charge less from service users and attain competitive advantage in UK's markets.
SAF of Strategies
For selecting any strategy, it is important for Vodafone to analyse its suitability, acceptability
and feasibility.
1. Suitability: The most suitable strategies according to use the company's strengths
effectively and in line with objectives of the company are: Technology and resources:
Vodafone is presently performing inefficiently because of their less focus upon global
expansion, so they need to adapt the strategy of market development. These primarily
include telecommunication licences that Vodafone holds, Related networking
infrastructure that enables Vodafone to function its telecom networks across the globe.
The company has established an extensive coverage across networks with over 200,000
base station sites for transmitting wireless signal.Geographic Expansion for broadband
services and Using the 5g infrastructure to capture US markets.
2. Acceptability: The acceptability is majorly regarding measurement of the return, risk and
reactions of stakeholders resulting from a specific strategy. Returns have to be measured
based on benefits from the strategy and its financial as well as non-financial effectiveness
(Kerr and Moloney, 2019). Returns calculations need to be done using cost-benefit
analysis, real-options analysis, profitability analysis and shareholder value analysis. In
terms of risk, the probability of a strategy’s inefficient performance and loss should be
measured. The most acceptable strategies are: New marketing strategies to tap US market
using 5G technology. Improving products and services with focus on usage and remove
unnecessary variants. The most acceptable strategies are usually beneficial for long term
in an organisation. The acceptability also differs from cases to cases and situation to
situation. Therefore, 5g expansion can be affected by many things but is most acceptable
in terms of performance .
3. Feasibility
The feasibility is the selection of any chosen strategy. Measuring the resources and
abilities to effectively enact the strategy is necessary for its success, hence financial

feasibility in monetary terms has to be evaluated through forecasting cash-flows,
evaluating break-even analysis and other financial tests. The evaluation of quantity of
manpower, equipment and material power Vodafone has, as well as the organisational
structure and the new markets. (Anwar and Hasnu, 2017) The best strategies are: Change
its products and services which are not generating revnue. Lower pricing strategy should
be adopted in times like corona pandemic and Brexit.
From the above assessment it can be concluded that the internal environment of Vodafone is
favourable and the strengths high. This has helped develop valuable strategies for expansion and
other objectives. All the strategies are suitable, feasible and acceptable and can be implemented.

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