Vodafone UK Market Analysis: A Strategic Management Plan

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BUSINESS STRATEGY
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TABLE OF CONTENTS
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................5
P1 Apply appropriate frameworks analyze the impact and influence of the macro environment on
a given organization and its strategies.............................................................................................5
M1 critically analyze the macro environment to determine and inform strategic management
decisions..........................................................................................................................................8
Task 2...............................................................................................................................................9
P2 Analyze the internal environment and capabilities of a given organization using appropriate
frameworks......................................................................................................................................9
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organization’s internal capabilities, structure and skill set............................................................11
D1 Critique and interpret information and data applying environmental and competitive analysis
to produce a set of valid strategic directions, objectives and tactical actions................................12
Task 3.............................................................................................................................................13
P3 Applying porter’s five forces model evaluate the competitive forces of a given market sector
for an organization.........................................................................................................................13
M3 Devise appropriate strategies to improve competitive edge and market position based on the
outcomes........................................................................................................................................16
Task 4.............................................................................................................................................17
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organization.......................................................................................................................17
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives.......................................................................................................................................20
Conclusion.....................................................................................................................................21
References......................................................................................................................................22
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LIST OF FIGURES
Figure 1: PESTLE model.................................................................................................................6
Figure 2: VRIO framework.............................................................................................................8
Figure 3: Porter's five forces model...............................................................................................12
Figure 4: Strategic management....................................................................................................14
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Introduction
In the modern era, the market where companies are conducting their operations has become
highly competitive, and this is affecting long term performance of the businesses in the market.
Further, analysing internal and external environment has become necessary as through this it
becomes easy to know the range of factors that are affecting business performance. Several tools
or frameworks are present through which it is possible to analyse the external environment of the
business such as PESTLE, porter five forces etc. Further, analysing the internal along with the
external environment contributes a lot to know about the factors that are affecting business
performance in the market.
The present study carried out is based on the organization selected Vodafone which is a British
multinational telecommunications conglomerate. The firm is headquartered in London, and at
present, it operates in different areas such as Europe, Asia, Africa etc. The organization operates
networks in more than 25 nations. The study highlights the analysis of the micro along with the
macro environment of the firm. Along with this, the strategic management plan has been
developed for the firm so as to carry out all the operations efficiently. So, these are some of the
key areas covered in the report.
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Task 1
P1 Apply appropriate frameworks analyze the impact and influence of the macro
environment on a given organization and its strategies
The market where Vodafone operates is highly competitive and in turn, various factors are
present that affects the long term survival and growth of the firm in the market. For analyzing the
external environment of the Vodafone PESTLE framework has been applied that represents the
series of the factors that affect the performance of the entity in the market. The key factors that
are affecting business performance involve political, economic, social, technological, legal and
environmental (Kolk, 2016). The detailed description of all the factors has been provided below:
Political: The market where Vodafone carries out its operation is highly regulated and it has
somehow affected the performance of the firm in the market. Further, the situation of political
stability is present in the UK and this has a positive impact on the performance of the business.
Laws and regulations do not change frequently. Government regulations are quite strict due to
frequency limitation (Georgescu and Popescul, 2015). Apart from this, due to the excessive use
of mobile phones health issues are increasing and in turn, it is negatively affecting children also.
Further, to deal with the political issues Vodafone has focused a lot in building the infrastructure
that supports the network. In short, if any practice has to be carried out then in such case
permission from the government is a must. Very high regulations are present as per the customer
need along with the overall environment where companies are conducting operations in the
market. In some nations, communication acts have been developed where it is mandatory to
comply with the act and in turn, better telecommunication service can be offered to the target
market. Hence, all these political practices are affecting the performance of Vodafone in the
market (Erasmus, et. al., 2016).
Economical: It is a well-known fact that the economic condition of Vodafone is sound.
Implementation of major projects such as 4G etc has taken place at a faster pace. Along with
this, people living in the society have strong purchasing power like they can easily purchase the
costly services of Vodafone easily (Hair Jr, et al., 2015). So, this is also favourable for Vodafone.
Somehow it has been found that economic factors have led to poor access in the areas and
buildings that are obstructed. The situation of economic downtime also arises where the main
reason behind the same is economic downtime. In past, the situation such as recession has
adversely affected the performance of Vodafone in the market and due to this reason, the
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practices of the firm were adversely hampered. Hence, in this way, the economic factor has
affected the performance of Vodafone in the market.
Social: This factor has a direct impact on business operations (Chang, 2016). Further, it is a well-
known fact that market trends are changing at a faster pace. People living in society are shifting
towards social media for communication purpose such as chat, instant messaging etc. are
responsible for reducing the overall dependence on network-based calls. Apart from this, it has
been found that the fear of radiation from mobile towers and phones is leading to a change in the
perception of the people regarding the use of mobile phones. People living in the UK are
becoming more health conscious, and they are avoiding the use of mobile phones to protect their
health. Therefore, this is having an adverse impact on the business practices of Vodafone. The
company is unable to deal with the changing perception of the customers, and in turn, on a long
term basis, it can affect the long term survival of Vodafone in the market.
Figure 1: PESTLE model
Technological: This factor is also most crucial where it is a well-known fact that with the
adoption of advanced technology the company like Vodafone is able to deliver better
telecommunication service to its target market (Gambhir, et al. 2016). In the country like the UK,
almost every firm prefers to operate with advanced tools and the level of technological up-
gradation is very high. The company is frequently adopting new platforms such as 4G etc. so as
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Political
Economic
Social
Technological
Legal
Environmental

to render better services to the customers in the different markets. The company is positively
responding to changing technological trends in the market, and it is somehow providing long
term benefits to the firm in every possible manner. Hence, through this, it can be stated that the
technological factor has benefitted Vodafone.
Legal: Several regulations affect practices of Vodafone in the market such as telecommunication
act, the sale of goods act and along with this employment acts have to be followed for
conducting operations in the UK market.
Environmental: The practices of the firm are affecting the environment in every possible
manner (Lee and Klassen, 2016). Further, in the case of Vodafone, the company has taken
actions to save surroundings such as recycling of used mobile phones where disposable handsets
are collected by the firm. So, through this Vodafone is working in favour of the environment.
Further, for knowing the strategic position of Vodafone in the market Ansoff matrix has been
applied that undertakes several strategies such as market penetration, product development,
market development and diversification. In the case of Vodafone, the organization’s strategic
positioning involves product and market development strategies. The company focuses a lot on
introducing new products in the market such as 4G security camera, car dongle, pet location, bag
location tracker etc. Through all these products, the company like Vodafone is focusing a lot on
enhancing its overall performance in the market (Vodafone, 2017).
Along with this, the firm is entering into new markets such as the US mobile market, India etc so
as to improve market coverage.
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M1 critically analyze the macro environment to determine and inform strategic
management decisions
As per view ofPrajogo and Oke, (2016) the macro environment of Vodafone is quite complex
and it is posing different types of threats on the firm in the market. The most crucial factors that
are affecting the business performance involves political, legal, economical etc and firm has to
take corrective actions for dealing with the same. However, Morrell (2017) argued that for
dealing with the factors in the external environment it is necessary for the firm to focus on the
formation of effective strategies. Further, all the strategic management decisions are taken by
Vodafone after analyzing its external environment such as adopting technology on the basic
trends prevailing in the market. For instance, if the economic environment is not favourable like
the purchasing power of the people in the society is not favourable then Vodafone has to lower
down prices of its prices. Hence, in this way, the macro environment informs strategic decision
making.
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Task 2
P2 Analyze the internal environment and capabilities of a given organization using
appropriate frameworks
For developing the real strength of the firm in the market it is necessary to analyse the internal
environment of the firm (Banica and Hagiu, 2015). Further, for analyzing the internal strength
VRIO framework has been applied that reflects the real efficiency of the firm to carry out its
operations in the market.
Figure 2: VRIO framework
Valuable: Different resources are present with Vodafone UK through which the firm is able to
operate efficiently in the market. Further, one of the most valuable resources is human where all
the employees working within the firm are skilled and they are able to render effective services
to the target market as per their expectations (Wheelen, et. al.,2017). The managerial expertise
within Vodafone is also valuable where all the managers are highly skilled and they can conduct
business tasks efficiently. The technological know-how is also valuable in case of Vodafone
where advanced tools are adopted for conducting operations in the market. Strong customer
relation is also valuable in case of Vodafone and at last service level.
Rare: The managerial expertise, skilled human resource and technological know-how are rare.
Every company operating in the market do not possess all these resources that directly provide a
competitive edge to the business in the market.
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Valuable Rare
Inimitable Organize
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Inimitable: The resources that are present with Vodafone in the market are not easily inimitable.
Further, other firms operating in the market cannot acquire the resource as they are costly and a
certain sort of limitations are present. The resources such as technological, customer service,
managerial expertise cannot be easily acquired by other firms in the market (Grosanu, et al.,
2015). Therefore, it is a kind of opportunity in front of Vodafone in the market.
Organized: It is a well -known fact that organizing resources in a proper manner it necessary
and in the case of Vodafone the company is effective enough in doing so. The
Internal planning of the firm is highly effective in order to exploit the key resources that are
present with the organization and it directly leads to effective utilization of resources in the
market. Vodafone is highly organized to take full advantage of its resources in the best possible
manner and this is one of the main strength of the firm in the market.
Hence, the applicability of the VRIO framework has clearly demonstrated the key resources that
are present with Vodafone and through this, the organizational efficiency has been increased in
the best possible manner (Bocken, et. al.,2015). The best part is that Vodafone holds the ability
to manage all the key resources and this is one of the main strength of the firm in the market. The
key competitors of Vodafone such as BT, EE etc do not operate with the same resource and this
is one of the main reasons behind the success of the firm in the market where operations are
being carried out. Along with this, the company focuses on effective management of all these
resources as the market is highly competitive and in turn the resource management is one of the
main ways through which the firm can easily sustain in the market for the longer time period.
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M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organization’s internal capabilities, structure and skill set
As per the view of Otache and Mahmood (2015) when the internal environment of the firm is
quite strong then it becomes one of the main strength of the firm in the market. Further, the
internal analysis has clearly demonstrated the key strengths and weaknesses of the Vodafone.
One of the main strength is optimum utilization of the resources where it has been found that the
company holds the ability to utilize all the resources in the most effective manner. According to
when any business enterprise is able to utilize all the resources efficiently than it builds the real
strength of the firm. Strength is a wide customer base along with a strong position in the market.
Skilled human resource is also the strength of the firm. On the other hand, some weaknesses of
the firm have been identified where the performance of Vodafone is weak in the European
market where the firm is not able to utilize the key resources in the proper manner and this is
hampering the business performance in the market. Along with this, another weakness is
declining subscriber base that needs to be managed in the proper manner by Vodafone. As per
view of Okeyo, et. al., (2016) when any business enterprise is unable to manage its weaknesses
then in such case it adversely influences the long term performance of the entity in the market
and in turn, various challenges are faced in accomplishing the desired goals and objectives also.
Analysis of the internal environment has represented that corrective actions are required to be
taken by the management of Vodafone to overcome or manage the key weaknesses as they can
affect the long term survival of the company in the market. For maximizing the overall strengths
in the market, one of the main aspects that are required to be undertaken is ensuring that all the
resources are utilized properly so that firm can gain competitive advantage with the help of this.
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