Strategic Analysis of Vodafone: Macro and Micro Environmental Factors

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BUSINESS STRATEGY
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Table of Contents
Introduction...........................................................................................................................................3
LO1.......................................................................................................................................................4
P1 Applying appropriate frameworks analyse 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............................................................................................................................................6
LO2.......................................................................................................................................................8
P2 analyse the internal environment and capabilities of a given organisation using appropriate
frameworks........................................................................................................................................8
M2 Critically evaluate the internal environment to assess strengths and weakness of an
organisation’s internal capabilities, structure and skill set...............................................................10
D1 critique and interpret information and data applying environmental and competitive analysis to
produce a set of valid strategic directions, objectives and tactical actions.......................................11
LO3.....................................................................................................................................................12
P3 Applying Porter’s Five forces model evaluate the competitive forces of a given market sector for
an organisation................................................................................................................................12
M3 Devise appropriate strategies to improve competitive edge and market position based on the
outcomes..........................................................................................................................................14
LO4.....................................................................................................................................................16
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given organisation...........................................................................................................................16
M4 produce a strategic management plan that has tangible and tactical strategic priorities and
objective..........................................................................................................................................18
Conclusion...........................................................................................................................................19
Reference.............................................................................................................................................20
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Introduction
In this scenario explain the strategies and approaches which can effort by the Vodafone. In
this it cover about the impacts and influence of the macro environment on the organization
and business strategy in which they need to use PESTLE approach to make the company
better than the competitors. In this explain about the work performance about the internal
environment and how to make more efficient which can grow the scale of economic rate of a
company. They can also apply the porter five forces which can help to give better outcomes
from the market.
They also use the SWOT analyses which can help to analyse the companies’ strength and
weakness from the competitors. It is important for the Vodafone because they found the
original state of the company and also analyze what are the increment will essential to stay in
a market and customer will satisfy with the product. They also need to apply theories and
concepts of the author which can help to compete with the competitors. How to make an
efficient strategy by the manager which can achieve the goals of the organization for the
future and what are the services they provide to a customer which helpful for them.
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LO1
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies.
Macroeconomic environment shows the aspects of the business environment which company
was not controlled. In this company can see the output of the goods and services in the
economy. They can also see how much export the good out of countries. A Vodafone is a
telecommunication company which can give the services in twenty-seven countries. It is a
large scale company so they need a study about the environment. Macroeconomic consider
the whole market system which include businesses, households, and governments.
In the macro environment, the company needs to analyze the work performance of the
company so Vodafone uses PESTLE analysis. The full form of PESTLE is.
P- Political
E- Economic
S- Social
T- Technology
L-legal
E- Environment
Political: Politics affects the future of the company. It also provides sustainable energy which
can anyone access. Vodafone will not provide services in some countries by political parties.
They can ban the services for the people.
Economic: For stable, a business company need economic growth and make a profit.
Vodafone can cover a better market at the global level by giving good services. Vodafone
provides mobile data, calling services and network which can attract the customer (Kolios, &
Read 2013). If the customer will satisfy with the services then the economic rate of the
company was increased and also increases the country’s economy. They will also need to
compete with the competitor for increasing economic growth.
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Social: The social company can also help to grow the environment and society because they
are part of the local society. If the company can develop them socio-environment then people
will influence this and do trust in the company. This is a good source to get the trust of
customer and that is one need of a company. The company have a stakeholder group which
gives there involvement with market energy developments.
Technology: Today in the telecommunication market has a fast growth rate. As watching this
Vodafone need to do changes in technology as per the needed of the customer. If the
company will depend on the old technology and not do changes then they losing the customer
and market (Khilji, & Tarique, 2015). Today change in the market in telecommunication is
come on 3G to 4G, provide wifi in public places and need a network in every area. They also
need to provide a good connection and services to influence the customer.
Legal: Vodafone follows all the rules and regulations made by the government. Some private
companies have also owned rules and regulations which employees want to follow in a
company. If the company will not follow the rules which the government make then they will
take legal action on the company. The company can also follow the laws which the court will
make. These rules were made because the company will not do fraud from the customers and
not do any illegal work which can harm to society and people.
Environment: If Vodafone gives the services by watching environment. The company can
also take care of the environment. They can save by decreasing the tower radiation frequency
but not compromise the services. Company changes the old machines which can harm the
environment.
This PESTLE framework analysis can show how Vodafone do the work in the market and
provide the services to the customer.
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M1 critically analyse the macro environment to determine and inform strategic
management decisions.
Inform strategically is to use the save the company from the risk and market issues. The
company can use the Ansoff matrix to strategies for diversification. This matrix is given an
idea to think about the risk of growth in generation of business and market (MindTools,
2017). In the Ansoff matrix, they have four levels in which they can major the risks are
• Market development
• Diversification
• Market penetration
• Product development
Market development: If a new company will develop they will also develop the market for
product selling. They need to identify the opportunities and threats in the different markets to
sell the product (Halmaghi, et. al., 2017). They can also analyze before launching the product
in the market that customer will like the product or not. The company also use pest analysis
or CAGE distance framework to analyze the threat. Vodafone target different groups of
people or a different age, demographic and gender by using market segmentation to
generating the profits. They use marketing mix for understanding the reposition your product.
Diversification: In this company can analyse the strategy based risk in which if they can
make a new product and trying to sell different products or services to the customer how
much they can get the economic scale from the market. Sometimes a company can expand
beyond the opportunities. The main advantage of diversification is one business will effect
from risk other businesses will not affect and get the economic growth.
Market penetration: In this approach, the company can find the risk that when they sell the
same product to the same market. So the company needs to make the new market strategy
which is different from the other competitors or encourage the people to purchase only your
product and use more of it. The company wants to launch the offers or decrease the price of
the product and do promotions. The company also increase efficiency in services to sales
force’s activities. Vodafone needs to use the Boston Matrix which can decide that the
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company need to invest further in the product or they should disregard. If the company
growth rate is good then they want to buy a competitor company in a mature market.
Product development: In this approach, a company can analyse the risk when they can sale
different product to the permanent customer. The company can analyse how to extend the
product and do the variants in the product or change the packaging of the old product. The
company can develop a new product but they are related to the old product. The company
needs to improve customer services or quality.
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LO2
P2 analyse the internal environment and capabilities of a given organisation using
appropriate frameworks.
Organization is a complex socio-economic system which has open character. In company
internal environment is related to employees and management team. Vodafone can make a
theoretical and practical plan in the internal environment and implement an external
environment. They need a team to implement a plan of the organization for achieving the
goals. They have capabilities to make a different strategy from the skill and implement it step
by step for achieving the goals by skills. The company appoint manger which can handle the
team and do the work informal manner. The company make the cultural environment and
give leniency to the worker for making stress free environment.
To analyse the strategic capabilities of the company they use VRIO model. VRIO model is
used to get the qualitative researcher in which a company can focus on quality. If the quality
of the product is good and the customer will satisfy from that then the company making the
profit and increase the scale of the economic. The things which are helping to develop the
VRIO framework project are:
• History: History can give the lesson to the company that what the mistake will do in the
past year. It can also show the weakness and strength of the company (Cardeal, & Antonio,
2012). history can show how much they can gain or loss in the market from this what the new
things they want to do to make the future better.
• Leadership: Company wants to need a skilled and experienced manager to lead the
workers and make an effective strategy to achieving the goals. They are also able to handle
the employee by developing the skills of the worker by giving them training and appreciating
which can give good performance in a work.
• Knowledge-Sharing and social networking practices: today the company see that social
media is a good source for promoting our products (. The company need to give continue
efforts and aware of the market.
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The full form of VRIO is Valuable, rare, inimitability, organization.
Value: If a company has a good resource and they will implement the strategy that improves
the quality of outcome efficient and effective. In this SWOT analysis also use in which they
can analyze strengths, weakness, opportunities, and threats. If the Company makes a valuable
product that customer will also like it because customer needs good product within a
reasonable rate.
Rare: Most of the company make a similar type of product which is the sale by the other
company. This is not give efficient value from the market (Jugdev, 2019). So the company
needs to create a creative strategy which is new for the market and give the profit to the
organization. Vodafone also needs to make a new strategy which customer can like and
available in rarely in the market.
Inimitability: After doing value and rare imitable is easily doing. Competitors will also copy
the company’s product so they need to give offers and other exclusive aids which can make
the customer permanent and they will not distract from the competitor product.
Organization: organization will be made by the management, structure, workers, and
resources. They can make the product for the market for fulfil the needs of the customer and
get the profit from them.
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M2 Critically evaluate the internal environment to assess strengths and weakness of an
organisation’s internal capabilities, structure and skill set.
Analyzing the strength and weakness of the organization were using the SWOT analysis. It
can help to people and organization what the condition of the company like weakness,
opportunities, threats, and strengths.
The organizational strengths: organization strength will major by the value which is different
from the other company. Strength means what are the advantages and skills of the company
which make it unique from the others (Gurel, & Tat, 2017). Strength shows positive favour
and creative characteristic. The strength of the organization is denoted that what they gain an
advantage over the other firms and competitor need to analyse in the internal environment
what the problems are coming. Strengths can show how it will do efficient and effective work
when it will come in the problem. How they can solve the problem which is possible when
how skillful workers in the company and how experience employee in the company. If the
company can give good training to the worker they give an efficient result for the
organization. There are five ways to cheque strong, equal or weak from the competitors are
relative financial structure, technical capacity, relative production, relative research, and
market situation.
The weakness of the organization: Weakness shows the mismanagement of the company. The
company will bear the loss again and again. Weakness means disadvantageous which
compare from others. It also show the characteristic that unfavourable and negative. In the
company of any level of management is weak it will affect the whole process of the work like
if the strategy is a manager is not efficient and unique then the outcomes will come wrong
which cannot give the profit and increase the economic scale. If they compare from the other
company the skill of the company will low and give a negative impact in the market.
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D1 critique and interpret information and data applying environmental and
competitive analysis to produce a set of valid strategic directions, objectives and tactical
actions.
Telecommunication Vodafone is the biggest service giving a company in the world. So they
need the strategy to run the company and how to give better services and product to the
customer. Management can focus on management level and planning, from this they can give
less focus on management strategy (Bassligil, & Ozkir, 2013). An organization needs to focus
all the level of management if any level they can miss then project work will disturb and
outcomes will not effect.
Current trends say that professionals, management level effectively apply competitive
intelligence approach, which can show the crucial knowledge about the research and analysis
of the business strategy.
There are different types of competitive advantage are.
• Competitive advantage can show the growth out of the value of the firm which can create
buyers from the market and exceeds the firm cost to create it. If the competitors can create the
same product and launch in the market with the low cost so the company can also down the
cost of the product and give an offer on the product from which old customer will not leave
the product.
• The company can also use the porter five models which are useful for help to make the
strategy for the organization strategy is used to characterize the firm strategic position which
at a small level of broadest level.
• In an organization, there are five forces framework strategy analysis and tools which
determine the potential profit of the company and industry. Vodafone gives the best plans to
the customer in the 4G plan which attract the customer from that which profit they gain use to
analyze the profit by PESTLE approach and also analyse how to make the future profit of the
company.
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LO3
P3 Applying Porter’s Five forces model evaluate the competitive forces of a given
market sector for an organisation.
Porter five forces can analysis the level of the market competition within the business
strategy and industry development. The attractiveness of the customer and investors refers to
overall profitability. These five forces of the porter have referred microenvironment and these
forces close that company which can do fraud from the customers and makes the brand to a
company which provided a good quality product.
Forces normally require for the business unit to recess market place and change the industry
information (Porter’s, 2012). The company can apply to network or business model achieve
the profit above the industry expectation. The five forces of the porters are:
The threat of new entrants: In the telecommunication market there are many companies are
given the services to the customer and they also get the profit from them. So new small
companies will also try to come in the market and gain profit. These companies are a threat
for old companies because small companies can give the services in the low price so old
companies also decreased the rate of services and product from this strategy customer will
not move to other company and use other services of the company which provides benefits to
increase the sales rate of the new product. Sometimes old companies also take over the small
companies which growth rate increase in the market. The nonperforming firms need to exit
easily by economic scale, brand equity, absolute cost, follow government policy,
differentiation of product, distribution of access etc.
A threat of substitute products or services: In this, if a new company can open and sale the
same product in the market then the product was a substitute. An example is Vodafone has
Airtel competitor coca cola has Pepsi competitor etc. This can decrease the customer of the
old company because the customer can like to taste or use the new product and check what’s
different. The potential factors are ease of substitution; provide the level of product, customer
switching costs, buyers substitute to propensity, depreciation of quality, increase the product
standard.
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