Vodafone Business Strategy: A Comprehensive Report

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BUSINESS STRATEGY

Table of Contents
INTRODUCTION........................................................................................................................2
LO1........................................................................................................................................... 3
LO2........................................................................................................................................... 7
LO3......................................................................................................................................... 10
LO4......................................................................................................................................... 14
CONCLUSION.......................................................................................................................... 19
REFERENCES........................................................................................................................... 20

INTRODUCTION
Business strategy is mainly about formulating policies and goals of an organization. It
provides a performance framework that helps in achieving goals. The main objective of this
assignment is to create a strategic growth plan for a large enterprise (In this assignment
Vodafone) and also use various analytical tools that can help in achieving the company
objectives of growth and expansion. This assignment also increases the understanding of
various models (Porter five forces model) and theories that help in interpretation different
strategic direction of an organization. This report also helps in understanding the impact of
the macro environment on an organization. It also accesses the internal and external
capabilities of an organization.

LO1
As a strategic planning manager, it is important to analysis various factor that will influence
the economy, spending, inflation, employment and monetary policies of an organization. It
is essential as a manager of an organization to anticipate the impact of changes in the macro
environment on the business as well on its market so as to take proper measure towards it
and adjusts the product and policies accordingly (Rothaermel, 2015).
Brief profile of Vodafone
Vodafone is one of the leading telecommunication networks. It is a British company and has
it’s headquartered is in London. And its customer base is almost 46 million customers
worldwide with 26% of market share in the UK (Azab at al, 2016).
Mission of Vodafone
The mission is something that defines the existence of the company. The mission statement
of an organization helps the shareholder to get an idea about companies overall objective.
Vodafone mission is to deliver connectivity for sustainable living (Rothaermel, 2015). Its goal
is to connect and empower people and communities with the help of innovative techniques
and also create value-adding jobs.
Vision of Vodafone
Communication technology plays a vital role in transforming people’s life. Technology helps
in connecting with peoples all over the world and contributes to global trends like access to
the internet. The core vision of Vodafone is to contribute to sustainable living through
technology services to 434 million customers with 70% from whom living in an emerging
market. It aims in creating an opportunity to grow and expand business by developing
technology, services which contribute to sustainable development and differentiate a brand
from another network. Efforts are made to introduce technology that helps in improving the
livelihoods of people like Vodafone’s mobile money transfer product M-Pesa (Azab at al,
2016).

Objective and goals-
• The main objective of Vodafone is to maximize profit without any compromises on
the quality they serve.
• Vodafone is constantly making efforts to increase the speed of their network.
• Their objective is to create a simple process that will help their customer,
shareholders, and employees.
• Vodafone is trying to build more trust over its customer and pursuing results that
matter to the business.
• The first priority of Vodafone is ensuring customer satisfaction and their marketing
and communication strategy is working properly or not.
• To ensure that their shareholders are getting a great return on their investment in a
business.
• To monitor the working of the supply chain and ensure that suppliers get paid on
time.
Applying an appropriate framework to analyze the Macro Environment
There are many factors that affect the operation of a business and also impact on the
business cost of capital, therefore, It influences what extend company grow and expand.
Therefore it is important to make proper analyses of such factor that has a direct effect on
business strategies of an organization. PEST analysis is one of the popular macro
environment analysis tools for scanning the business environment.
PESTEL Analysis
It is one of very powerful strategic tool for the analysis of the business position, market
growth, opportunities and measures for possible action.
1. Political Factors
Political factors comprise of government influence and economic factor. These
factors are very important for strategic management. Various fiscal policies, labour
law, restriction over trade and political stability of economy are check before making
any business strategy. Vodafone required to closely analyze various factor before
formulating any policy or investing in a certain market-

 Stability of the wireless communication sector
• Trade and tariff regulations.
• Taxation policies and wages relation.
• Safety regulation in the technology sector.
• Pricing related to government regulation.
2. Economic Factors
Economic factors have a significant effect on the profitability of a business. It
includes factors like interest rate, inflation, exchange rate, wireless communication
industry growth rate. Following are the economic factor that requires analyzing –
• UK economic system of operation.
• Technology related to government intervention.
• Skill level required for the wireless communication industry.
• The educational level of the economy.
• Business cycle stages and economic growth rate.
• Technology and wireless related advantage in the economy.
• Interest, inflation rates, unemployment rate etc.
3. Social factors
Society is changing continuously with the change in taste and fashions of the
customer. Use of digital technology and social networking sites like Facebook and
Instagram become very popular nowadays. All these things affect the marketing
policies and operational strategy of Vodafone. It is important for the marketers of
the Vodafone group to understand various factors related to society that may
change the macro environment of the wireless communication industry. Different
aspects of society that influence the business environment come under this
category. In order to create a marketing strategy of Vodafone, it is important to
understand the customer of the given market. The social factor that Vodafone
analyze are –
 Health, environment, consciousness-related attitude of the customer.
 There luxurious interests, gender roles, conventions.
 Education and skill level of customer in society.
 Power and class structure of society.
 Nature and demographic aspects of society.

4. Technological Factor
Analysis of technological factor is important for the business to understand the
technological capabilities. It is important to analyze different variables that can help
in evaluating alternatives with respect to technology. Technology analysis help in
understanding the technological capabilities of business as well as the speed at
which technology disrupts the industry. Strategic leaders of Vodafone analyze these
factors for development and updates of technology in the industry.
 Technological development of competitors of Vodafone.
 Change in the cost structure of the wireless communication industry.
 Changes in marketing strategies and operational activities due to technology.
 Internet and automation related changes in technological trends.
5. Environmental factors
Every business is influenced by the environmental factors of the market. There are
certain environmental standards which impact the profitability of the organization. It
is important to analyze environment standards for the correct operation in that
market. Every country has different environmental laws and liability that the industry
should consider before forming policies strategy. Following elements that Vodafone
should consider before creating any policies-
 Climate condition, weather.
 Pollution and regulating laws of pollution.
 Different endangered species.
 Attitude towards waste management and Support of renewable industry.
6. Legal factors
There are different forces related to laws and regulation of the economy that
adversely affect the functioning of a business. It is important to consider these
factors in order to protect the business from any legal consequences. Following laws
and regulation of government that Vodafone should consider-
 Regulatory bodies like advertisement standards and bureau.
 E-commerce laws, copyright, and patent laws.
 Employment laws, health and safety laws.

LO2
Internal environment includes all those factors of business that affect the success and
operational approach of a business. It is important to understand the various internal
factors involved in the business. It helps a business to understand their strength and
weakness and provide an opportunity for growth. Internal environment includes the
objectives that a firm needs to achieve. It also includes the nature of the organization
structure and the value system. Quality of human resource is also considered in the internal
environment of an organization. Hence, it became important to analyze these factors of the
internal environment to ensure the success of business plans and strategy of Vodafone.
SWOT analysis of Vodafone – SWOT analysis helps the industry to understand its internal
strength and weakness. It is an internal environmental audit of the industry. Vodafone is
mainly located in the UK and it is one of the renowned brands in the network industry which
is famous for its distribution and marketing tactics. Below is a description of SWOT analysis
in order to understand the potential and opportunities along with weak aspects of Vodafone
(Sammut, 2015).
STRENGTH
The main strength of Vodafone is its international expansion of the market that increases
the possibilities of profitability in business. Vodafone has a huge market share and brand
value that will increase the opportunities for market leadership (Sammut, 2015). Vodafone
is the second largest mobile network company that aims to customer satisfaction. Vodafone
strength includes-
 Huge market scope- Vodafone is famous for its widespread network.it has become
second largest telecom network provider that operates more than in 31 countries all
over in the world and ranked 395th in top 2000 brands according to Forbes. It has
21% of the market share in the UK.
 Customer base-Vodafone has a huge customer base of a total of 350 million people
that create the big possibility of profit to the industry.

 Income generated- It is one of the biggest telecommunication provider companies
and whose headquarter is situated in London. It is the second most valuable brand in
the UK with 47.6 billion euros of annual revenue (Sammut, 2015).
 Surcharge over Cost-Due to efficient marketing strategy Vodafone has built trust
over the customer that helps Vodafone to get premium and profit above the margin.
 Value of brand –Vodafone has become the UK's one of the most valuable brand by
increasing its value by 6% to $28.9 billion (McCarthy, 2018).
 Marketing strategy- Marketing strategy of Vodafone is known across the globe. Due
to various attractive campaign like zoozoo, Vodafone pug, people started becoming a
fan of Vodafone.
WEAKNESS
Analyzing the weakness of business is important to understand and eliminate various
limitations that become a barrier to success and help in understanding the scope of
improvement. Below is a proper analysis of various limitations in Vodafone (Bhasin, 2018).
 Decreasing rate of subscribers-Vodafone is losing subscribers from the past four
years. It is important for Vodafone to strengthen its core value and strategies to
increase their subscribers (Bhasin, 2018).
 Dropping Brand valuation-With the drop in subscription rate the brand value of
Vodafone UK is also dropping drastically over 3-4 years (Bhasin, 2018).
 Data tariff – With the abatement of unlimited data tariff in market usage of data
does not remain fair anymore which result in great loss in product development in
Vodafone.
OPPORTUNITIES
It is important to evaluate various opportunities that can help a company to improve the
company’s position and create effective strategic planning. For the proper analysis of
various opportunities, it is important to understand various internal and external factor and
current potential of a business (Sammut, 2015).

 Network coverage Company has the opportunity to gain the customer by improving
their network coverage. It is possible when a company increases the number of
towers in the UK.
 Fourth generation technology- It is a great opportunity for Vodafone to increase its
revenue by providing 4G plans to their customer. Vodafone has the opportunity to
provide the most powerful 4G network and dominate in the wireless telecom
services.
 Opportunity to improve quality –In this new and emerging market where
communication becomes a very important part of people’s lives, there is an
opportunity for Vodafone to improve their quality and emerge as a market leader
between telecom companies (Sammut, 2015).
 Prominent market-There is an opportunity for Vodafone to expand all over the
globe by providing quality services and mounting tower at some emerging market in
upcoming years.
THREATS
 It is important to analyze various issue related to business interruption, losses, and
liability, in order to create the proper strategy to tackle them and helps in the
smooth running of a business. Following are emerging threats for Vodafone
(Sammut, 2015).
 A competition-the major threat to any business is generally from its competitors. In
the UK Vodafone have competitors like Verizon, AT&T, and Nippon that are strongly
affecting the market share of the company. It is important to create an effective
marketing strategy for Vodafone UK.
 Portability rate- Customer never thinks twice while they switching to another
network so it is one of the major threats of telecom to check the portability rate of
the company. Customer switches to another network whenever the competitor
introduces any cheap attractive plan for them. Therefore Vodafone needs to
introduce effective pricing with a better quality of network so that Vodafone can
maintain brand equity.
 Saturation point- Saturation occurs when the company spends more on customer
acquisition than what they really get a result. It is important to analyze the

saturation point of Vodafone because of emerging competitors with various
premium offers.
LO3
The telecommunications industry is very flexible by its nature and its competitiveness in the
United Kingdom. Vodafone produces a different kind of products and services to the
customers. Telecommunication ‘Sector' does not include only one company or specific firm;
sector refers to the bunch of companies that produced similar products and services and
that is very close to each other which fulfil the need of customers. They provide voice and
data communication services to the customers at a very massive level. Vodafone company’s
priority is to analysis the need of the customer and provides them with that level services so
that Vodafone use different strategies to evaluate the competitive forces in the market by
using Porter's Five Forces Model, stakeholders’ Analysis and also use of Balance scorecard
which can influence competitions are followings:
Figure 1 Porter’s Five Models (Porter, 2013)
1. The threat of new Entrants – Low
This is the analysis of how high-low is the barriers to entry in a field. Sometimes
there is a requirement of very high capital at the time of entry in the market, it
includes manufacturing cost, research and development cost and some licensing cost
(Porter, 2013).
 Government rules and regulation vary the condition from the expectations and they
impose different conditions in telecommunication.

 To set up the brand name is very difficult because some existing brand already
captures the market.
 Vodafone analyses Newly Setup Company has a lot of pressure to establish their new
product in the market with some innovative way.
2. Bargaining power of customers – High
Customers can dictate prices; they can reduce the pricing policy of the company.
Customers have a very big opportunity to choose, they can move anywhere in any
other company. A company cannot deal with the quality of the product, it should be
best at the time of the starting period. Company actual strength is based in his large
numbers of customers, if an organization has less number of customers so that they
can lead the prices. Basically, buyers are price sensitive (Porter, 2013).
3. Bargaining Power of Suppliers – Moderate
If the number of suppliers is high in the company, they can dictate the prices policy
which is not good for the Vodafone and also it makes an impact on the profit
structure of the company. Suppliers have moderate bargaining power can allow
them to sell on the higher priced and low quality of raw material to the buyers.
Maximization of suppliers can hold the resources and increase the cost of raw
material. Limited suppliers cannot guide and lead the terms; the company should be
concern about the direct interaction with the customers to make a better profit
(Porter, 2013).
4. The threat of Substitute Product and Services – Moderate
In the Telecommunication industry, the ability to substitute product and services is
moderate. Generally, customer can switch the product and services from one
company to another by the extremely attractive prices and better quality of product
and services (Bertozzi at al, 2017).
Example: EE is a company who provides unlimited data to its customers without any
restriction but it doesn't mean that Vodafone customer switched to the other
company EE, Vodafone has extremely better network range. Customers move to the
other company because of the prices factor.
5. Rivalry among Existing Competitors
There is a high-level competition among the existing companies for the same
product and services and there is a lot of similarity between them (Bertozzi at al,