Strategic Management Plan for Vodafone: Improving Competitive Edge

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Business Strategy
1

Contents
Introduction.................................................................................................................................................3
LO1.............................................................................................................................................................4
P1 Applying appropriate frameworks analyze the impact and influence of the macro environment on a
given organisation and its strategies........................................................................................................4
M1 Critically analyse the macro environment to determine and inform strategic management decisions
.................................................................................................................................................................9
LO2...........................................................................................................................................................10
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks............................................................................................................................................10
M2 Critically evaluate the internal environment to assess the strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.....................................................................13
LO3...........................................................................................................................................................14
P3 Applying Porter's Five Forces model evaluates the competitive forces of a given market sector for
an organization......................................................................................................................................14
M3 Devise appropriate strategies to improve competitive edge and market position based on the
outcomes................................................................................................................................................16
LO4...........................................................................................................................................................17
P4 Applying a range of theories, concepts, and models, interpret and devise strategic planning for a
given organisation.................................................................................................................................17
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives...............................................................................................................................................19
D1 Critique and interpret information and data applying environmental and competitive analysis to
produce a set of valid strategic directions, objectives and tactical actions.............................................20
Conclusion.................................................................................................................................................21
Reference...................................................................................................................................................22
2

Introduction
Business strategy can be simply defined as a plan which is created for running a venture
smoothly and efficiently. This must be prepared before starting a new business in a place. The
main motive of designing the present report is to develop awareness regarding different kinds of
strategy which can be applied in an operational, strategically or tactical role for any company. In
this context, Vodafone is considered which is dealing in the mobile telecommunication sector.
The critical analysis of the macro environment of Vodafone will be discussed by applying a
PESTLE analysis tool. In addition to this, Ansoff’s growth vector matrix will also be going to be
described for analysing the strategic positioning of the enterprise.
3

LO1
P1 Applying appropriate frameworks analyze the impact and influence of the macro
environment on a given organisation and its strategies.
This is important to analyse the implications of macro environmental factors on the working of
Vodafone. This can be understood by using PESTLE analysis. Vodafone Group plc is a British
international telecommunication conglomerate whose headquarters is situated in London and
Newbury, Berkshire. They are operating their business in different regions like Africa, Oceania,
Asia and Europe. Vodafone has secured the fourth rank amongst a series of mobile operator
groups. The impact of the macro environment on the business and performances of Vodafone
can be understood by examining below-mentioned points:
 Political factor: The political factor plays an eminent role in determining the factors
which are influencing the Vodafone Group plc for long term profitability in a specific
nation or market. These ventures are operating in wireless communications in a large
number of countries and are exposing itself in front of different kinds of political
environment and risks related to the political system. Governments of various nations
impose several kinds of rules and regulations which impact directly to the business
operations of a venture like Vodafone. For example, the government body of a certain
nation can impose a high rate of taxations and due to this Vodafone has to pay a huge
amount of money in the form of tax (Alawiyah, Humairoh, 2017). Thus, big amounts of
money of company get to spend on paying such taxes only. Thus, political factors are
impacting negatively on the working of Vodafone. Thus, if a company would make an
effective strategy, then they get affected by the norms and legislation made by the
government bodies. For example, the strategies of Vodafone like working freely in a
specific nation may get impacted by the strict rules and regulations of the government
of that country.
 Economic factor: This is considered as one of the important dimension for the venture
like Vodafone. If any state or country get develop, then there are high chances of the
company to expand and enlarge its business in the other newly developed zones. If
there is a good GDP in a nation; this shows that civilians living over there are having
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more income (Pinto, et. al., 2019). Thus, they can easily invest money in the new
schemes launched by the venture. Thus, the overall financial condition of Vodafone
gets improved. But this situation can also become vice versa if the economic situation
of a country would not be good. Thus, the strategies related to the business of Vodafone
get impacted greatly by the economic situation of a place where they are operating. For
example, if the company has made a strategy of selling more and more products or
services to the customers of a particular place, but the economic condition of that place
or nation is not god, then people living over there are not able to buy the services and
products offered by them. Thereby, Vodafone has to face a huge loss after that as their
strategies get failed in that situation.
 Social factor: Such factors are mainly or purely based on the local tradition, culture,
and beliefs of the citizens whereby firm is operating. Vodafone should make plans by
the social life of their customers since this is very important to satisfy all the users. If
the customers would not get satisfied, then they would not prefer Vodafone. Therefore,
it is essential to building a healthy and positive relationship with civilians of a specific
nation where the company is operating. Vodafone is normally a European corporation,
but this has modified its preferences and the norms or policies according to the regional
social factors whereby the company is operating its business (Fern Fort University,
2018). Thereby, it can be said that the strategies made by the Vodafone get impacted by
the social factors. For instance, if people of a particular country is not getting satisfied
with the services and products offered by the Vodafone, then they will not prefer them
and move their rivals in search of better services. Thereby, it is important for Vodafone
to follow the culture and traditions of their customers and offer them services according
to that. For instance, Vodafone can identify when the seasons of festivals would arise of
a particular community and can provide additional facilities and benefits at those
period. This will definitely help them in seeking the attention of more and more
customers towards their services.
 Technological factor: In the world of innovation, Vodafone has made its good image.
They always used to follow the contemporary trends in the communication and
technological sphere (Harlow, 2016). But due to the advancement in the technology,
along with benefits Vodafone has faced a lot of issues. For example, the level of
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competition has been increased after the development of technology as all other firms
are using modern technology and giving competition to their rivals. This causes a
decrease in the overall quantity of customer base. Therefore, it can be said that the
technological factor is impacting positive as well as negative ways to the business of
Vodafone. By this way, such factors are also influencing the strategies of the venture
since due to the rise in the competition level, all the schemes of the venture is getting
failed. They are not able to make more profit now. Therefore, Vodafone has to make
the business strategies as per the existing technological as well as competitive levels. If
they will do so, then they would not face many issues in the future and present as well.
 Environmental factor: By the rise of globalization, civilians have now become more
ethics and ethical oriented. People expect from their favorite corporation or brand to be
more responsible towards the environment and society. They wish that their preferred
brand would follow a great role in the welfare of the society as a whole. At the same,
Vodafone get greatly impacted by the sudden change in the weather or climate since the
network of the company gets down and the customer also suffers from the same. Some
of the sudden changes in nature like the occurrence of a natural disaster like flood,
drought, heavy rainfall, cyclone, snowfall, etc. damage the network of the
communication channel like Vodafone (Akman, and Mishra, 2015). Thus, the company
is getting negatively impacted by the environmental factors of a particular place, and
the strategies of the Vodafone are also is being impacted in this context. For example,
the firm has made a certain strategy, and some random change in the climatic situation
of the specific nation has occurred. Then, the whole plans of the venture get destroyed.
Thus, it is important for the Vodafone to consult with predictors of climatic conditions
so that they can create schemes as per that and would not face any issue.
 Legal factor: For the global venture like Vodafone that are having different
competitors has to be very aware regarding legal problems such as copy and other
pirated issues. Different states have blamed Vodafone for the legitimate issues about
the sphere of infrastructure. Thus, in this context, Vodafone has faced many penalties.
Besides this, the corporation has also been accused of paying very fewer wages to their
workers about the competitors. This is the reason that most of the employees leave
Vodafone and join their rivals. Due to this, the probability of leaking of innovative
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ideas of the venture gets increases. Thus, Vodafone has to chalk some legal bindings in
this perspective.
Furthermore, the company should always abide by legal norms made by the
government of a particular nation so that they can run their business in an ethical and
disciplined manner. This has been seen that the legal factors are influencing the strategy
of the Vodafone. For instance, legal bodies of the specific nation would impose strict
norms associated with the telecommunication sector, and that would not be followed by
the venture (Kadono, 2015). But this can make them guilty in the eyes of the
government and some punishment or penalties would be given to the corporation.
Hence, it is important for Vodafone to make their business plans according to the legal
system of a particular place where they are operating so that they can smoothly run
their business.
Thus, it can be that the macro environmental factors are impacting a lot on the business as well
as upon the commercial strategies of the Vodafone. Therefore, the corporation should act and
make their strategies as per the external environmental factors.
Apart from this, Vodafone should also determine its organisation’s strategic positioning by
applying Ansoff’s growth vector matrix. This matrix comprises four matrixes which are
described below:
 Market Penetration: If Vodafone wants to increase the volumes of the sales of their
existing goods and services in their current market, then they can use this strategy.
 Market Development: This strategy is used for developing the business in the new
marketplace. In this context, the product remains similar, but that would be selling in the
new region.
 Product Development: This strategy should be used by Vodafone in seeking the
attention of existing customers (Tshabuse, 2017). Here, a new product or service is being
catered to the existing audiences so that more and more people can be easily attracted.
The main motto of doing so is to increase the profitability of the company.
 Diversification: This is completely a new scheme where new merchandises are being
sold into a new market. There exist so many risks as the company is going on a different
path. Vodafone should not use this strategy as they may face different risks.
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Figure 1: Ansoff's matrix
(Source: Ansoff's matrix)
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M1 Critically analyse the macro environment to determine and inform strategic
management decisions
According to the views of Prasetiawan and Tricahyono (2016), the microenvironment analysis
should be done Vodafone if they want to attain success in their business. If they do not do so,
then they might face losses in upcoming days. The company should decide and make strategic
management decisions by examining such factors. For example, if Vodafone has made a strategy
of starting their business at a new place and does not inspect the norms and policies made by the
government of that particular place. Then, they may issues as they may not go to follow the rules
made by the legal bodies due to unawareness of that. By this, the government would understand
them guilty and may give some punishment to them. This may also impact antagonistically on
the branding image of the venture. Therefore, it is essential to determine the macro
environmental factors before entering into the new market so that proper decisions can be made
effectively.
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LO2
P2 Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks
Strategic capability can be simply defined as the ability of a business to successfully employing
competitive strategies. This allows it to survive and enhance its value time to time. The strategic
capabilities of Vodafone can be determined by using a model known as VRIO. This model is
used to identify and analyze the resources existed in a venture. This can be understood by
examining below-mentioned points:
 Value: The resources offered by the Vodafone are affordable and also can be easily
available in the marketplace.
 Rareness: The resources or products offered by the Vodafone are rare in nature. They are
providing various offers to the customers about the other competitors.
 Imitability: The resources offered by Vodafone can be considered as less imitable as no
other company can copy the same easily and present that in front of customers (Harish,
and Kumar, 2014).
 Organization: Since the company has passed in all above three requirements, they are
known as organized in nature. The company can exploit the competitive benefits and can
earn a huge amount of profit as a result.
This shows that Vodafone has good strategic capabilities and they can compete easily with their
competitors who are giving similar resources and services to the customers. Apart from this, it is
important to understand the internal environment of Vodafone, and this can be determined by
knowing the strengths and weakness of the corporation.
Strengths of Vodafone:
Vodafone is a powerful brand that is known for its deep telecom roots across multiple nations.
The strengths of Vodafone are listed below:
 Revenue generated: Vodafone is generating billions of dollars in every year. In previous
year, i.e. 2016, the company has an amount of 87.3 billion dollars. Thus, it can be said
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that they are earning a huge profit every year. They have secured a rank of 104 in its sales
figures all over the 2000 list of the globe.
 Massive market coverage: This Company is present at the rank of 395 in the world’s
top 2000 brands in the telecommunication industry. Vodafone is known for its wider
distribution and network cover. This is known as the second largest subscriber base in
India. They are operating in more than twenty-five nations all over the globe.
 Premium cost: The different other telecom operators are penetrating the
telecommunication market, but Vodafone is differentiating its services on a regular basis.
Because of the marketing and communications of Vodafone, the customers are feeling
proud of being the user of it (Minds tool, 2018). This is the reason that the premium
prices are being afforded by the customers while other telecom operators are struggling in
spite of maintaining the positive margins.
Figure 2: Vodafone
Weaknesses of Vodafone:
Besides this, there are some weaknesses of the company which are mentioned below:
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 Losing market share in the USA: Vodafone is losing its market share in the USA to
Verizon Wireless and AT&T. Therefore, the corporation has to face a huge loss in this
market.
 Poor performance in Europe: The performance of the Vodafone is getting down in its
home market due to the Brexit and other economic situation of Europe. The company is
not earning so much profit. Thus they are suffering from a loss in Europe (Vijay, 2015).
Thus, it is important for Vodafone to improve its performance in a nation like Europe and USA,
if they want to earn more profit in these places.
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M2 Critically evaluate the internal environment to assess the strengths and weaknesses of
an organisation’s internal capabilities, structure and skill set
According to the viewpoint of Magede (2018), the performance of Vodafone is quite impressive
since they are being counted in one of the popular telecom brands across the whole world. They
have secured a rank of 395 amongst the globes’ 2000 other brands by Forbes. They are now
performing in more than 25 countries. In addition to this, the venture is earning a great profit at
the end of each year. They have earned or generated an amount of 87.3 billion dollars in the year
2016. The value of the resources offered by them is quite good. They are offering affordable
services and products to their customers along with some premium cost products. At the same
time, the quality and resources offered by them are rare in nature. Such services are not being
very less available in the competitors. Apart from this, there are some weak factors of the
venture. They are not performing well in its marketplace that is Europe. In addition to this, they
are losing their market share in the USA. This may also become a threat for the Vodafone if they
will not take an immediate step for controlling their business and performances in those nations.
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LO3
P3 Applying Porter's Five Forces model evaluates the competitive forces of a given market
sector for an organization
This is important for Vodafone to evaluate the competitive forces so that they can make a proper
strategy for dealing with the same. This can be done by applying Porter’s five forces model:
 Bargaining power of buyers: Since there are various companies are working in the
telecom industry; the customers are having so many options in their hand. They can choose
any of the company according to their needs and demands. Thus, clients are doing the
bargaining with Vodafone at a higher scale. By examining this, it can be said that the
bargaining power of customers in the industry of telecommunication is very high.
 Bargaining power of suppliers: The negotiating power of suppliers for Vodafone is
also quite high as the firm is operating with greater margins in comparison to their
challenges. There is less number of suppliers existing in this telecom sector, thus are
demanding high prices from the corporations (Ghezzi and et. al., 2015). As a leader in the
marketplace, the share would be larger meaning it can absorb any increment in the prices that
are imposed by the suppliers more than its competitors can. By doing so, Vodafone can
overcome from the situation of high bargaining power of their suppliers and can earn
effective profits.
 Threats of new entrants: The threat of new entrants is quite low in the
telecommunication sector since entrepreneurs have to invest a huge amount of money as well
as time if they want to enter into this market place. In addition to this, they also have to pay
huge licensing fees along with spectrum availability and regulatory issues associated with the
telecom industry (Fern Fort University, 2018). Besides this, the costing of setting up the
network is also very high. The rapid and fast change in the technology has made it difficult
for the other new entrants to cope. But Vodafone can compete with such new entrants by
maintaining high-level efficiencies of its services.
 Threats of substitutes: Vodafone is facing a considerable threat to its goods and
services. This has been seen that services like landline and CDMA are declining at a faster
rate. At the same time, broadband services are increasing in the market's trend. There is a
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different substitute of the mobile services that are Video Conferencing, Google Talk, VOIP
like Skype and Yahoo Messenger, email and other social networking platforms. Thus, this is
important for the venture to come up with new and attractive plans if they want to seek the
attention of more and more customers.
 Rivalry within the market: Vodafone can face extremely high competition as the world
is converted into a battleground and everyone to secure a strong position in the industry. The
competitors of Vodafone are offering the calling at a very low price rate which is attracting
most of the customers towards them. This is not good for Vodafone. Thus, they have to take
an instant step to cope with their rivals. This can be done by offering innovative and unique
services at affordable and low prices.
Figure 3: Porter's five forces
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M3 Devise appropriate strategies to improve competitive edge and market position based
on the outcomes
Vodafone should use an appropriate strategy if they want to overcome the competitive
environment and improve its market position. The strategies that can be used by them are the
following:
 The Company should offer their services at low prices to their customers about the other
rivals so that they get attracted towards them.
 They can also provide attractive offers to them at festive seasons when people used to
talk more with their relatives and friends (Harish and Kumar, A., 2014). Thus, they can
launch new schemes like full talk time, free messages, etc. to them so that clients love to
use the services offered by Vodafone.
 Vodafone can also launch innovative and unique services or products to the civilians and
those at affordable prices so that people belonging to all sections whether it is rich and
poor can use and enjoy the same.

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LO4
P4 Applying a range of theories, concepts, and models, interpret and devise strategic
planning for a given organisation.
The strategy of Porter’s generic competitive strategy would help the Vodafone Group Plc to
analyse its value and strategic position in the market. It would help the company to take an
effective decision which would help the company to enhance its strategic position in market. It
would help the company to analyse the strength which would help to identify the position of the
company either as the cost leader, differentiator or focus leader.
 The Cost Leadership:
The company strategy to provide the lowest possible price among the other competitor
companies that are present in the market would help the company to become the Cost
leader. This would help the company to gain a competitive advantage in the market, and
the company would easily be attract the attention of the customers through its low price.
 The Differentiators:
The strategy of the Vodafone company to provide the best possible services in the market
would help the company to get the positive reviews of the customers. It would help the
company to stand unique among all the other competitors in the market through its
unique services which are only provided by the Vodafone Company.
 Focus:
The above strategy would help the company to target the specific group or audience in
the market to design its strategies to attract6 the customer with the market and to fight
through the competition that is present in the market.
 Struck in the middle:
As the strategy of Porter’s generic competitive strategy considers the company stuck in
between when its stuck between the two choices of leadership and differentiation. Under
such circumstances, the company is generally not able to fight through the competition
that is present in the market.
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The above strategies would of Porter’s generic competitive strategy help the company in the
decision-making process. The strategy that is opted by the company is the Low-Cost
Competency which is unique with broad and narrow targets.
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M4 Produce a strategic management plan that has tangible and tactical strategic priorities
and objectives
The strategic Management plan of the Vodafone Group Plc Company would help the company to
analyse its targets, objectives and goals. It would help the company to work in most organised
and planned manner possible. This would help the company to save time and cost. Strategic
Management plan includes the following process:
 Investigation of the need of the customers
 Research of the project or the product started by the company
 Manufacturing of the product
 Supply of the product to the final user
 Analyse the Risk
19

D1 Critique and interpret information and data applying environmental and competitive
analysis to produce a set of valid strategic directions, objectives and tactical actions.
This would help the company to gain a competitive advantage in the market.
Microenvironmental would help the company to work in the most cost-effective manner through
the strategies such as Porter’s generic competitive strategy, Porter five force model and PESTAL
Analyses (Alawiyah and Humairoh, 2017). It would help the company to analyse the strength
and weakness of the company. It also includes the Ansoff’s matrix which helps the company to
provide its strategic position in the market.
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Conclusion
By going through the above-based report, it can be concluded that this is important to create a
business strategy before starting a new business at a new place or the existing one. In this
context, the company should use different models like porter's five forces, Porter's generic
model, pestle analysis, etc. This will help firm like Vodafone in making a good strategy that
would prove to be beneficial for them and their business. In this project, PESTLE analysis of
Vodafone has been done to determine the implications of macro environmental factors on their
business. Besides this, Porter’s five forces have also been discussed for determining the
competitive forces existing in the telecom industry.
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