Business Strategy of Vodafone: A Comprehensive Analysis

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Business strategy

Table of Contents
Introduction......................................................................................................................................1
LO1..................................................................................................................................................2
P1 Apply appropriate framework to analyse the macro environment for a given organisation. 2
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 analyse the internal environment to assess the strength and weaknesses of an
organisation’s internal capabilities structure and skill set.........................................................13
LO3................................................................................................................................................15
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation...........................................................................................................15
M3 Devise appropriate strategies to improve competitive edge and market position based on
the outcome................................................................................................................................17
LO4................................................................................................................................................18
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation.............................................................................................................18
M4 Produce strategic management plan that has tangible and tactical strategic priorities and
objectives...................................................................................................................................21
D1 Critique and interpret information and data, applying environmental and competitive
analysis to produce a set of valid strategic directions objectives and tactical actions...............22
Conclusion.....................................................................................................................................24

References......................................................................................................................................25

LIST OF FIGURES
Figure 1: LOGO of Vodafone..........................................................................................................2
Figure 2: PESTEL Analysis and its components.............................................................................3
Figure 3: Strategies specified by Ansoff Matrix..............................................................................5
Figure 4: VRIO Framework.............................................................................................................8
Figure 5: VRIO Framework for Vodafone......................................................................................9
Figure 6: Summary of VRIO Analysis of Vodafone.....................................................................11
Figure 7: Porter Five Force Model................................................................................................15
Figure 8: Positioning strategy defined under Bowman model......................................................18

LIST OF TABLES
Table 1: SWOT Analysis of Vodafone..........................................................................................12

Introduction
Business strategy is a set of actions or decisions that assist an organisation in attaining its
specific goals. It can be considered as a master plan that Vodafone can use to secure a
competitive position in the communication industry by carrying out effective operational
practices, and pleasing customers with quality products and services. This report is presented in
the context of Vodafone, which is the largest British telecommunication firm that provides a
wide range of products and services to both the corporate enterprises as well as end consumers. It
has built its brand recognition by establishing its business across the world and reached to the
customers of more than 500 million. Vodafone is ranked at the third position in terms of both
subscribers and revenue against its competitors.
In the present report, the external and internal environment of Vodafone business is analysed to
support effective strategic decisions that contribute in the long term sustenance in the market.
Besides, competitive analysis is also discussed with the help of theories and concepts that
facilitate Vodafone in developing a creative and growth-oriented strategic management plan.
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LO1
P1 Apply appropriate framework to analyse the macro environment for a given organisation
The business environment consists of both internal and external factors that may impact the
business practices of an organisation. Hence, it is essential to analyse them and accordingly
business strategies are framed to minimise its negative impact (Gupta, 2013). Following are the
macro-environmental factors that largely impact the functioning of Vodafone and its business
practices:
Mission, vision and objective of Vodafone
The mission of Vodafone is concerned with gaining competitive advantage with the availability
of high-quality network and integrated telecommunication solutions in the market. The vision of
Vodafone focuses on the provision of products and services to the customers at affordable rates
and at easy availability.
The objectives of Vodafone include:
 Availability of good speed internet to fulfil the essential need of telecommunication
sector
 To fulfil the needs of customers in the telecommunication industry by establishing a
transparent and reliable relationship with them
Figure 1: LOGO of Vodafone
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(Source: https://www.themobileindian.com)
Hence, to fulfil the above objectives, vision and mission, Vodafone has made its brand with a
bigger portfolio by offering a wide range of products, offerings, and services.
Business Strategy
It is referred to as the strategic planning on the basis of which decision are taken to attain the
organisational goals and objectives. It is generally formulated with competitive featured so that
Vodafone can beat its competitors effectively (Verbeke, 2013). To develop effective business
strategies and to obtain a strategic position in the telecommunication market, it is essential to
analyse the macro environmental factors:
PESTEL Model analysis in Vodafone
Figure 2: PESTEL Analysis and its components
(Source: https://www.business-to-you.com)
Political factors: Vodafone has expanded its business in the international market, and therefore it
requires dealing with various governmental policies in different countries. Those areas where
government policies are flexible and effective technologies are available then it provides large
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growth opportunities for its business (PESTEL analysis of Vodafone, 2019). On the other hand,
high taxes on the telecommunication services leads to price rise of final output and reduce the
sales and profitability of Vodafone.
Economical factors: Economic factors include changes in the inflation rates, growth rates,
borrowing cost, foreign exchange rates, economic cycle etc. that influence the aggregate
investment and demand in a country’s economy. Hence, before investing into any project,
Vodafone Group Plc is required to analyse the industrial growth in the wireless communication
sector, technological growth rate, inflation, etc. of the country in which it is going to invest. For
example, good stability in economic conditions will highly improve the purchasing power of
people and leads to Vodafone’s business success.
Social factors: Marketers in Vodafone are required to analyse the customers’ needs, shared
beliefs, and attitude so that marketing strategy can be formulated accordingly for the specific
population (John Dudovskiy, 2012). This helps the Vodafone to gain a competitive edge within a
particular market. Various social factor that is needed to be considered by Vodafone is, the level
of education in society, skill level, culture regarding gender, roles, conversation, etc.
Technological factors: Telecommunication industry is highly influenced by innovation and
advancement. Lack of adaptation with the latest technologies may lead to heavy losses to
Vodafone even may diminish its brand value. For example, the slow speed of the internet will
affect the mindset of customers, and they immediately switch another telecommunication brand
to get quality services at a reasonable cost.
Environmental: environmental laws and standards are different in different countries. Hence, to
make profits along with conserving environment will create a distinct image of Vodafone in the
wireless communication sector (Vodafone Group SWOT and PESTEL analysis, 2019). For
example, the major reason for increases carbon dioxide is telecommunication business practices.
Therefore, Vodafone has adopted the latest technologies to minimise its impact.
Legal factors: Legal obligations and regulations relating to the telecommunication sector are
somewhere strict and somewhere lenient. However, Vodafone is required to comply all the legal
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rules and regulations relevant to the industry, like discrimination law, antitrust law in wireless
sector, health and safety law, employment law, etc. to run profitable business venture without
legal provisions.
Ansoff’s Growth Vector Matrix
This model has provided a strategic marketing tool to the Vodafone that integrate the growth
strategy and organisational objectives to obtain long term standing in the market.
Figure 3: Strategies specified by Ansoff Matrix
(Source: https://www.mbaskool.com)
Market Penetration: This strategy focuses on the enhancement of market share with the existing
products and services of Vodafone. For example, with the extensive and creative use of
marketing tactics, Vodafone can increase its significant market presence. In addition, the set up
of an effective and large number of distribution outlets will increase its customer base and
profitability (Kim Moore, 2013).
Market development: This strategy provides that Vodafone can expand its business in the new
international market with the help of its existing products and services. For example, Vodafone
can leverage its expertise to enter into the market areas of Africa where mobile and
telecommunication sector is still not tapped effectively.
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Product Development: This strategy states that launching new services and products of
Vodafone will leverage the profitability of Vodafone that built its high brand value and strong
relationship with its customers. For example, 5G internet services of Vodafone will attract large
number of customers (Hussain et al., 2013).
Diversification: Vodafone can also focus on launching new products into the new market so that
high growth can be sustained. It is a highly risky, and therefore Vodafone is required to have
strong management support, expertise, cash, and other resources that contribute in its long term
success in the new market.
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M1 Critically analyse the macro environment to determine and inform strategic management
decisions
The strategic management decisions can be effectively taken with the help of macro environment
analysis by PESTEL and Ansoff growth matrix. The political environment where Vodafone
operates is somewhere flexible and stable that brings high brand recognition to the Vodafone
while in some countries, Vodafone is facing political challenges to run its business successfully.
Vodafone has an economical advantage in the urban areas that have high purchasing power for
the residents. The changing needs of customers are analysed and fulfilled with the innovative
technologies that help Vodafone in getting high success in the telecommunication business
environment (LEYVA et al., 2018). Constantly changing technologies in the telecommunication
market is putting pressure on the Vodafone in relation to matching its products and services with
it to beat the competition in the market. Vodafone is taking effective steps in protecting the
environment so that it can contribute a good amount in the betterment of society. Various legal
provisions and regulations are in compliance by Vodafone so that legal penalties and actions can
be avoided.
Also, the strategies as per the Ansoff growth Matrix model, Vodafone can establish a good
competitive position in the telecommunication market. For example, improvement in the
network coverage and establishment of more network channel will help the Vodafone in
attracting a good number of customers towards it.
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