Vodafone Business Strategy Analysis: Macro Environment and Models

This report provides a comprehensive analysis of Vodafone's business strategy, focusing on the impact of the macro environment and the application of various strategic models. The introduction highlights the importance of business strategy in achieving organizational goals, particularly within the telecommunications industry. Task 1 delves into the macro environment, utilizing PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors affecting Vodafone's operations. Furthermore, it applies Ansoff's growth vector matrix to evaluate Vodafone's strategic positioning and growth strategies, including market penetration, product development, market development, and diversification. Task 2 examines Vodafone's internal environment and capabilities, emphasizing strategic capabilities and the VRIO/VRIN model to assess competitive advantages. The report also explores the competitiveness of the UK's telecommunications sector using Porter's five forces model and concludes with an analysis using Bowman's strategy clock model. The report aims to provide insights into Vodafone's strategic approach and its adaptation to the dynamic telecommunications market.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and influence the macro environment........................................................................1
TASK 2............................................................................................................................................4
P2 Internal environment and its capabilities of an organisation.................................................4
TASK 3............................................................................................................................................6
P3 Competitiveness of UK’s telecommunications sector using Porter’s five forces model.......6
TASK 4............................................................................................................................................8
P4 Bowman’s strategy clock model............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
As per current scenario, every business organization make effective strategies to attain set
goals and objectives. By preparing as well as developing appropriate strategies, company easily
enhance their performance level and at the same time also capture larger market share form its
rivals. Business strategy is refer to an action which leads in accomplishing organization goals.
Through this, firm can attain their mission, vision, goals and objectives by utilizing all the
activities of the company (Ackermann and Audretsch, 2013). In addition of this business strategy
is consider as a long term planning which help firm to attain long term benefits. This will
contribute in attaining better success at market place by establishing strong image. Present report
is based on Vodafone, is a British multinational telecommunication which serve fixed line
telephone, mobile phone, broadband, digital televisions, internet television and many more in
over the world. This report also discussed about impact of macro environment on Vodafone
company. Along with this, Ansoff growth vector matrix is also mentioned in this report which
may leads in analysing strategic position of the company at market place.
TASK 1
P1 Impact and influence the macro environment
Strategy is one of the important activity for business organization through which
company design an action plan to attain long term goals and objectives in appropriate way.
Basically, business strategy define the way and direction to company in order to attain set goals
and objectives in appropriate period of time. In this, it is important duty of top level management
to develop appropriate strategy which may leads in attaining desirable results in allotted time
frame. In this context, macro environment is also consider as an important factors which directly
impact on the business and its activities which exist in outsider of the company. All these are
directly affect the overall performance of the company in positive and negative manner. In
today's market, mobile telecommunication industry is developing sector in over the world. In this
larger number of companies operate their operations with the aim of attaining better success at
market place. Vodafone is also a famous company which operate their business in telecom
industry as they provide better services in overall the world in order to improve their
performance level at market place (Alsoboa and Aldehayyat, 2013). This company founded in
1991 in which they cover all the world as they deliver quality services to its customers. Now
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company operates network in various countries to provide telecommunication and IT services in
approx 150 countries.
PESTLE Analysis of Vodafone
Pestle analysis is strategic tool which is used to examine external factors which impact on
the business. Vodafone organisation determine all its external factors which affect on business
activities in negative manner.
Political- This factors influence in a way to progress of organisations such as Vodafone
as it develops better infrastructure for an organisation to operational in specific state. This firm
conduct its business in many countries or at global level (Bentley, Omer and Sharp, 2013). In
addition to this, political factor affect Vodafone by including regulations of EU roaming which
aims is to reduce the usage of mobile phone through 70%. In the Mexican telecom market,
licence is not easy to met and it is very expensive. Government of Mexico does not give
permission top enter in telecom market because the growth in this country is high. For ex., Due
to having strict legislations in many countries not easy for Vodafone to operate their functions
effectively with ease and expertise.
Economical- Recession affect on income level of people and customers as well. In which
customers are fails in buying new and innovative products which larger effect the overall growth
of the company. In addition of this, company also change their policies as per recession which
may leads in inviting as well as attaining larger number of customers to purchase company
phone (Williams and Figueiredo, 2011). Along with this, cost of new licensing is also affect the
company performance as current Mexican market, Vodafone also use new technologies within
their process to increase the profitability level of the company at market place. For Ex.,
Vodafone has their business operations in all major developed nations where economic condition
is better which is beneficial for Vodafone to get the desired results in stipulated period of time.
Social- Under this, life style of customers, their taste and preferences are also affect the
whole performance of the company at market place. In this context, Vodafone serve quality
services to its customers in order to satisfy their needs which may contribute in attaining better
success in Mexican market. This market always change new technologies as it largely affect the
customers and company strategy as well. Thus, Vodafone serve better services as per customers
needs and wants which may leads in improving their performance level. For ex., society is
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hugely depends upon telecommunication sector even after having their adverse impacts. This
will proves as positive factor for their business operations to grow with continuous rate.
Technological- New and advanced technologies are also affect the whole performance of
the company. Mexican market is growing and developing market in which number of companies
tries to operate their business with the purpose of attaining better growth (Cadle, Paul and
Turner, 2010). So that Vodafone provide better upgraded products as per customers convince.
Along with this, GPS also a major term which is available in entire handset as Vodafone also
provide better navigation programs to its customers which help in improving overall growth at
Mexican market. For ex., There are large number of technological changes are happen in
telecommunication sector on regular basis which has positive impact on working Vodafone to
effectively grab the future opportunities.
Legal – Number of laws and regulations are introduce by government, which is important
for Vodafone to follow it effectively in order to maintain their performance level at market place
(Curwen, 2011). With the help of this company enhance their productivity level and at the same
time also manage their business activities in an effective way. For ex., There are may regulations
which are required to fulfil by the management of Vodafone while operating their business
functions. This will have negative impact upon the image of Vodafone if such regulations are not
fulfilled.
Environmental – For improving their performance level at market place, Vodafone have
set a recycling programs in which they reduce the resources as well as materials. With the help of
this company help the environment and also reduce the negative aspect which affect the
environment. They also give incentives to customers for exchange the old phone for new one
which may helps in improving the performance level. For ex., There are large number of
radiations are coming out from the networks which has negative impact upon environment. In
this regard Vodafone is required to adopt such measures which helps in removal of such impacts
and getting the support of society.
Ansoff's growth vector matrix of Vodafone
It is an effective matrix which helps in determining the overall growth of the company at
market place. By using this strategy company enhance their performance level by serving new
and quality products to its customers (Tavitiyaman, Qu and Zhang, 2011). This will aid in
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accomplishing positive brand image of the firm in market place. In addition of this, this matrix
include four various growth strategies are as follows:
Market penetration: It is an appropriate strategy in which company serve their quality
and current products and services to the current customers in order to attain better profitability
level at market place. With the help of this company invite as well as attract larger number of
customers towards company products. With the help of this company capture larger market share
from its rivals and at the same time also create strong customers base.
Product development: It is also an important aspect in which company provide their new
and innovative products in existing market with the purpose of attaining better profitability level.
Under this, company enhance their performance level and also attain competitive place in
market.
Market development: Under this, the main purpose of company is to serve their existing
products in new market by determining all the factors (D'Aveni, Dagnino and Smith, 2010). For
attracting larger number of customers, Vodafone provide their services in new countries which
may leads in capturing larger market share form its rivals. By introducing their existing products
in new market Vodafone create strong customers base.
Diversification: It is one of the important aspect which used by company in strategic
development in which firm develop new and innovative products in new market. Basically it is
an effective option but it also include risk factors (Dobbs, 2014). By using this company enhance
their performance level at market place.
TASK 2
P2 Internal environment and its capabilities of an organisation
In current market scenario, internal environment play vital role in evaluating as well as
determining the strength and weakness which may leads in actual performance of the copay at
market place. Thus, it is important for company to consider all the factors in order to manage all
the activities in an appropriate way. It includes employees skills, working capabilities of the
workers, management efficiency and many more. All these are major factors which have to be
control by the company to attain desirable goals and objectives in appropriate way. In this
context the core competencies are also helps in improving the quality of the firm which
contribute in attaining competitive advantage.
Strategic capabilities
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It is an effective procedure of business organization which may leads in executing entire
business activities in increasing the profitability level at market place (Sumer and Bayraktar,
2012). For making better improvement in capabilities company, it is important for manager to
utilise all the available resources which may aid in attaining positive outcomes in adequate way.
Along with this, there are various requirement like market position, assets of the company
resources and many more that helps in developing positive brand image at market place.
Basically the main aim of developing strategies is to enhance productivity level which contribute
in attaining set target of the company in most effective manner. With the help of this company
also compete their competitors by delivering better services in front of customers. In context of
Vodafone, they also use various effective strategies through which they also serve better
telecommunication services to its customers in order to attain their better satisfaction. AS per
today's market, changes are rapidly take place in which company use updated as well as
advanced technologies to produce quality services to its customers. In this context, various
advantages are also develop in relation of strategy to effectively manage all the financial
activities as per daily basis (Firnkorn and Müller, 2012). This will helps in determining the
stakeholders in order to attain competitive advantage at market place. With the help of this
manager also take right decision by using available resources which motivate their workers to
perform well and also bring better relationship at market place.
VRIO/ VRIN model
This model is related with analytical technique which help business organization to
maximize their profitability level. Basically it is used by the human resource department of
Vodafone to set their goals and objectives and also accomplishing the strong place in competitive
market (Grover and Kohli, 2013). With the help of this, company easily capture larger market
share form its rivals. Along with this, VRIO tool consider as an important aspect which
contribute in improving the positive image of the company by which firm attain desirable results.
In context of this, it includes four aspect which can be understood by following points:
Valuable: Under this, valuable products are the important aspect which helps in improving the
performance level of the company. With he help of this firm gather as well as collect information
by which company increase their profitability level at market place. Along with this, quality
resources are vital for company to attain competitive success at market place by delivering
quality services to its customers.
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Rare: This term is related with the resources which are produce by some specific companies in
market place (Scholes, 2015). It is effective in improving the performance level of the company
at market place. In addition of this, competition are much high in telecommunication industry so
that it is required for Vodafone to improve their efficiency level of the company in order to attain
desirable results. In context of Vodafone, they needs to provide better training and development
programs to their staff members in order to enhance their skills and knowledge at workplace.
Limitability: It is refer to effective resources which is more expensive in nature. With the help
of this, company easily develop their positive brand image at market place by serving quality
telecom services. In context of Vodafone, they increase market share by delivering quality
services to its customers as per their needs and wants. Through which company create strong
customers base in most effective way.
Organisation: Vodafone operate their business in various location with their positive brand
image. In this they offer quality services to its customers in order to provide them better
satisfaction. This will aid in maintaining positive relation with its customers (Johnson, 2016).
Along with this, it is also important for company to make necessary changes within their process
and technologies which may leads in improving the performance level of company in market. In
addition of this, structure of the company should be systematic in which firm effectively use
available resources in appropriate way.
Strengths and weaknesses of Vodafone
For determining the actual performance of the company, it is important for them to
determine their strength and weaknesses (Klettner, Clarke and Boersma, 2014). In addition of
this, strength is related with capabilities and weaknesses are limitation. By using this, Vodafone
improve their performance level by implementing appropriate strategies. In this, strength and
weaknesses of Vodafone can be understood by following points:
Strengths:
 One of the main strength of Vodafone is that they have international expansion which
may leads in improving the profitability level at market place.
 Company has huge market share which leads in attaining leadership in market.
 Vodafone is second biggest mobile communication company in which they create strong
customers base.
 Number of loyalty customers is also a main strength of the company.
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Weaknesses:
 The price of the Vodafone products is comparatively high in which some time they fails
in inviting customers (Porter, 2011).
 Vodafone have weak performance in European markets which reduce their profitability
level at market place.
TASK 3
P3 Competitiveness of UK’s telecommunications sector using Porter’s five forces model
As per today's business environment, company use effective and appropriate tools which
helps in determining the competitiveness of business at market place. Along with this, it also
define various opportunities in which company increase their profitability level. In addition of
this, Vodafone also develop strategies through which management take better decision which
may contribute in attaining better success at market place. Furthermore, Porters-five-forces
model also play vital role in determining the competitiveness in telecommunication industry.
With the help of this company evaluate their overall performance from their competitors. In this
strength of the company may aid in improving the performance level of the company which
directly contribute in attaining competitive advantages (Bowman Strategy Clock, 2017).
Basically this model define five forces by which manager of marketing determining some strong
and positive points which may contribute in enhancing profitability level at market place. These
forces are understood by following points:
Competitive rivalry: Under this, competitive rivalry is high because number of
competitors are operate their business activities in telecommunication industry. So that it is
important for company to set their product price affordable which may leads in increasing
profitability level of the company in appropriate way. For attaining the same, company may
collaborating with competitors which may increase market share from its rivals. For example,
large number of competition is present in market such as BE and EE which impact the working
of Vodafone adversely.
Threats of Substitutes:Under this, number of products are available in market place with
different varieties which may directly affect the profitability level at market place. In this
context, threats of Substitutes of products is high which affect the overall performance of the
company in an adverse way. For attaining better success in market place, Vodafone set
affordable cost of the products which may leads in improving their performance level of the
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company at market place. For ex., there are many organisations which are provides
telecommunication services which results is biggest threat for Vodafone. The organisations like
BE have high market share in UK which adversely impacts the working of Vodafone in UK.
Bargaining power of suppliers: Under this, number of companies operate their business
in telecommunication sector buy raw material form number of suppliers in which company
easily attain higher profitability level at market place. For attaining better success in market
place, Vodafone build effective supply chain which various suppliers in order to make quality
products in order to increase their profitability level. Along with this, company use quality raw
material to enhance their profitability level at market place which may leads in capturing larger
market share. For ex., There are large number of distributors are available with Vodafone in
different nations which enables them to effectively provide their services in all over the world
effectively and efficiently.
Bargaining power of consumers: In market, number of customers ate there who is loyal
for Vodafone. In this context, the bargaining power of customers is high due to its best cost of
the company which may lead in increasing profitability level of the company at market place.
Along with this, they also satisfy customers needs and wants by providing them better services.
For ex., The number of consumers which use the services of Vodafone are high in number which
depicts that high market share is captured by Vodafone in actual.
Threats of new entrants: It is based on the market entry in which company take diverse
products and services to offer its customers. Along with this, it is not much easy for
telecommunication industry to enter in new market because the competition is also high in
market. For attaining better success and generate larger profitability, better communication is
more important in which company easily invite large number of customers towards its products
and services which may leads in attaining better success at market place. For ex., The legislations
which are provided government of nation for entering into telecommunication sector is strict in
nature. This will shows that the threat for entries is low in front of Vodafone in current market
scenarios.
TASK 4
P4 Bowman’s strategy clock model
This model is one of the important and effective which used by the company to
measuring the competition at market place. In this company compare their products with its
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competitors to determine the actual performance of the company at market place. With the help
of this, company also attain better opportunities in market place which may contribute in
attaining competitive advantage. As per this model, company define the variety of products in
front of customers. By using this model, Vodafone effectively analyse as well as determine
customers needs and existing position of the company at market place. In this context all the
position of this model can be understood by following points:
Position 1 Low price and value added: This position define that products and services is
not differentiated and the customers perceives is also very little. In this the price of the products
is very low. Through this company improve their performance by delivering products at low
cost. With the help of this company easily compete their competitors at market place.
Position 2 Low price: It is important and effective strategy which helps business
organization to minimize the overall cost which may leads in attaining better success at market
place. With the help of this, Vodafone easily increase their profitability level by delivering
quality products and services at low cost.
Position 3 Hybrid: It is an effective combination of two strategies in which company use
lower price with differentiation of the products. With the help of this company invite larger
number of customers because company serve variety of products and services to its customers.
Position 4 Differentiation: It is one of the important strategy which helps business
organization to attain set goals and objectives in market place by delivering quality products and
services to its customers. In context of Vodafone, company provide quality services to their
customers as compare to its rivals through which company easily create strong customers base.
In this brand image also play crucial role in attaining competitive advantage in market. With the
help of this Vodafone easily attain better success in market place.
Position 5 Focused differentiation: It is define product price which helps in attracting
large number of customers because company get high return. Basically this type of strategy is
related with this high brand image, high target segmentation. In this context the company
increase their profit margin by delivering quality services to its customers as per their needs and
wants. With the help of this company easily sustain in market for longer period of time.
Position 6 Risky high margins: It is also an important strategy which implement by the
company which define high risk. It define product price which is high in context of Vodafone.
Due to this, some time company reduce their profitability level. So that it is important for
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company to set their product price appropriate which may leads in improving their performance
level.
Position 7 Monopoly pricing: Under this position, only one seller is there in market is
called monopoly market. In this company is free for using any price as per customers needs and
wants. In context of Vodafone, various competitors are there in market in which they face
various challenges and competition in market place. Along with this other companies are serve
same telecommunication services to its customers like Virgin, BT and another
telecommunication companies.
Position 8 Loss of market share: Under this, it is more difficult for business organization
to attain high competitive advantage. In this company should set their standard price of the
products which may leads in increasing profitability level and customers trust as well.
Therefore, Vodafone use position 4 within their business activities. As per their firm offer
diversified services such as 5G network, phones and many more to larger number of customers.
As they can easily enhance their profitability level at market place. In addition of this, by
implementing this strategy Vodafone make their brand image more popular at global level which
directly contribute in capturing larger number of market share form its rivals.
CONCLUSION
From the above mentioned report it can be summarised that business strategy play vital
role in managing as well as implementing all the activities in order to attain set goals and
objectives in appropriate period of time. Basically it is long term activity which contribute in
attaining long term goals and objectives. Along with this, company also develop various
strategies with the purpose of attaining competitive advantage at market place. It also include
PESTLE and SWOT analyse which direct affect the overall performance of the company in order
to attaining better success at market place. In addition of this, Ansoff matrix is also used by the
company to evaluate overall growth of the company which may helps in providing long term
benefits to business organization. All these help company to attain competitive advantage in
market place.
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