Strategic Management Plan for Vodafone: Improving Competitive Edge

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Business Strategy
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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
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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.
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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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