Vodafone: Strategy and Innovation Report - Business Analysis

This report provides a comprehensive analysis of Vodafone's strategy and innovation within the telecommunications sector. It begins with an overview of the company, its global presence, and financial performance. The report then delves into the micro and macro environments, analyzing key factors such as the company's internal structure, suppliers, public relations, competitors, and customers, as well as external elements like economic, political, and technological influences. A detailed examination of Vodafone's current strategies follows, including its mission, values, vision, and competitive strategies, such as differentiation and expansion. The report evaluates Vodafone's strategy, assessing its micro-environment, suppliers, and overall performance. Finally, it discusses Vodafone's competitive advantages, including cost leadership, innovation, marketing, and core competencies, such as global scale, cost efficiency, and capital discipline. The report highlights Vodafone's commitment to innovation, customer satisfaction, and expansion into new markets.

Strategy & Innovation

Table of Contents
INTRODUCTION...........................................................................................................................1
COMPANY OVERVIEW...............................................................................................................1
Analysing environment..........................................................................................................1
CURRENT STRATEGY.................................................................................................................3
EVALUATION OF CURRENT STRATEGY................................................................................5
CONCLUSION AND RECOMMENDATION ..............................................................................7
REFERENCES................................................................................................................................9
APPENDIX....................................................................................................................................11

INTRODUCTION
Making strategies is significant part of a business because it play crucial role in moving
forward toward organisational goals. Importance if innovation at the time of making tactics has
enhanced because many multinational companies earned competitive advantage on other players
of market by developing and using latest technology (Bessant and Tidd, 2015). This assignment
is based on Vodafone, one of the most successful organisation in telecommunication sector. An
overview of this firm will become part of this file along with evaluation of current strategy.
Micro and macro environment will be analysed and strategic direction of the organisation will be
explained in this report.
COMPANY OVERVIEW
Vodafone is UK based corporation who is also present in many other regions like Asia,
America, Europe etc. This company started in 1982, they were known for making military radio
but at the time of entering in new industry, they initiated a joint venture with Millicom in 1991
and made Vodaphone (Bridge, O’Neill and Cromie, 2013). In present scenario, they are among
top five firm, of telecom industry, who are operating in UK and their sound global presence also
assist them in attaining significant amount of market share of this sector. This organisation is a
public limited company and they are registered in LSE i.e. London stock exchange. They second
listing is in NASDAQ and they are present in the list of FTSE 100 index. Almost 1,11,000
people are working in this firm and their net profit is around 6.3 billion pounds(Look out for the
sky(net), 2017).
Recently this company came in limelight because they invented huge amount in
improving developing 3G network at rural locations. They also earned free publicity for
removing any charges on roaming. Vodafone firmly believes in improving the level of customer
satisfaction. They are focusing on quality of network and affordable plans. This corporation
understand significant of training and they spend huge sum on honing present skills which are
currently present in their employees. UK is an importance market for this firm because it is their
domestic region and most of the work relating to innovation is done in this region (Bilton, 2007).
Analysing environment
Understanding business environment is important for every company because this is
prime area where they run their organisation. Their are mainly two types of environment, micro
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and macro. Prior one is related to internal and later is connected with external. Their are six key
factor in micro environment which are mentioned below:
The Company – Employees are its various department comes under this section. Worker
of this company is high qualified and trained and they are prime region behind continuous
success of the corporation. Although this enterprise has many divisions but main are finance,
marketing and research & development. In UK, less than 300 employees are present at the most
of senior manager in Vodafone and at middle level management, around 1500 people are
working. All other worker are employed lower level which is responsible for execution of task.
Strength of male personnel is more than female (Christensen, Antony and Roth, 2004).
Suppliers – Importance of suppliers in recent time has increased because their role is
crucial in effectively managing supply chain management. Vodafone has divided their supply
division in three part, first one focuses on procurement, second concentrate on operations and
last team deals with controlling.
Public – Social factors comes under this section. It is related to society and all the work
which an enterprise for public (UK CLOUD COMPUTING MARKET REPORT, 2017).
Competitors – O2, Everything Everywhere are main competitors of this corporation.
Vodafone is currently holding a spot in top five companies of communication sector of UK
market, they do not have many competitors but those who are operating are giving good
competition to this organisation.
Customer – This firm is generally known for mobile network but they provide dish
connection and optical fibre for fast internet (Davenport, 2005). They have prepaid and postpaid
customers and consumer are considered as prime stakeholder of this company.
Intermediaries – A company cannot directly reach to their customers, they have to work
with intermediaries in order to run their business in effective way. Vodafone has zonal structure
and they have distributor in cities and mini retail stores in rural areas.
Beside this micro environment factor, there are some external (Macro) element which can
also impact performance of an organisation like economical, political, technological etc. The
may not be directly related to the enterprise but they have potential affect a firm in an effective
way.
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CURRENT STRATEGY
Vodafone is a renowned name in telecom sector because of their past and present
strategy. This organisation known that they cannot attain growth without entering and expanding
their business in new territories like India, African countries. Economic growth of European
nations including UK is slow and the goals set by this firm cannot be achieved by running
business in single economy (David, 2012). Developing more products and providing better
service is key part of their current strategy. This is the main reason behind spending huge sum on
5G technology and merging their business in countries like India with another same sized firm
for surviving and expanding business in highly competitive market.
Mission – Mission statement of this company is “To become table leader in
communication sector, an enhancing connected world” . They are already a leading company and
they are doing everything to attain number one spot in global telecom sector.
Value – This company is very serious about innovation and developing new services and
product is significant for this organisation. Earning loyalty of customer make them ''customer
obsessed''. One of the main value of Vodafone is that they want to make a company with where
ambitions and passionate people work (Vodafone 'sorry' for signal issues affecting Wester Ross,
2017).
Vision - Vodafone want to deliver connectivity and product innovative product in order
to increase quality of life which people are living and improve their livelihood (Dodgson, Gann
and Phillips, 2014). They are focused on operating their organisation in responsible way and
without conducting any unethical practice.
Environment – Vodafone has made different types of plans for controlling and attaining
success in their internal environment. But there are various factors of macro environment which
are not in their hand. They have made a unique strategy that if a new challenge will come up
because of external factors like economical or technological change then they will make quick
decision and keep their focus on aggressive expansion and introduce new technology.
Competitive strategies – Vodafone is investing in new regions specially Asian and
African. They understand that these continents will drive growth in forthcoming time so if they
capture significant share in these market in currently scenario then it will assist them in earning
huge profit in upcoming time. Besides geographical expansion, their competitive strategy also
include acquisition of new costumer without loosing old one (Von Stamm, 2008). An important
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part of their tactics is to use innovation for earning more revenue. Business and sustainability
strategy of Vodafone are connected to each other. They do not launch a product or service for
only earning profit, they check its usability for public in order to make sure that needs of society
are met in appropriate time. Some of competitive strategies are as follows: Differentiation – Some of the services offered by Vodafone cost more amount, they
provide these products only in premium segment because they know that only laymen
would not prefer to but them. Differentiation strategy concentrate on charging different
price for a little different product.
 Expansion – This company is working on a effective strategy where they are trying to
attain more market share in developing regions so they can reduce their dependency on
their current market and increase their overall profit (Battistella, Biotto and De Toni,
2012).
Competitive advantage – Their are some crucial factors which differ Vodafone from
their competitors. Quality workforce is one of them, this company do not hire someone because
of its degree, they analyse whether the employee is passionate about his/her work because it they
will not enjoy their enjoy then performing significant tasks like doing innovation and providing
high level of customer satisfaction to service users is not possible. Global presence also provide
them extra edge on other market players. Vodafone has below mentioned competitive
advantages:
 Cost leadership – If cost of product is low then selling product, even at market price, will
provide more profit to a company. Vodafone is en-cashing this opportunity and
registering more revenue.
 Innovation – Vodafone is known for introducing various innovations, their research and
development team is working better than most of the other companies and they are trying
to their sound financial position is assisting in development of sustainable technology.
 Marketing – Marketing specially advertising is department which has always performed
better than the expectation of top level management of this company (Cavalcante,
Kesting and Ulhøi, 2011). They are play an important role in increasing the number of
loyal customer which is very significant in this industry (EE and Vodafone named best
UK networks for mobile internet in study, 2017).
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Core competencies – These are strengths of an organisation which make them
competitive in business environment. Core competencies are those factor which provide
competitive advantages to a company. Below are some core strengths of Vodafone: Global scale advantage – This company is present in almost every part of this world.
Global presence is helping them in maintaining a stability in their business, if they fail to
register decent amount of profit from one country then other market can assist them in
compensating that amount (Gobble, 2012). Cost efficiency – Vodafone is doing everything for becoming a cost efficient company
and they have attained remarkable success in this work. This strength made them
competitive and assist them in attaining a position in main player of different market.
 Capital discipline – Vodafone is using their capital in correct way, they are making
crucial decisions relating to investment in right time. Using money in appropriate way
provide more strength to this firm and support them in getting some extra benefits on
core competitors.
Portfolio – In different nations, Vodafone is offering various kind of product and
services. They have launched their handsets in 2010 which include smartphone tailored by this
company. Beside mobile network, they are also working in area of mobile network
(Govindarajan and Ramamurti, 2011). They has 2G, 3G and 4G network. They are also going to
launch more 5G services in next couple of years. Their services is related to providing voice calls
and messages along with data packages. Their smartphones gained lot of popularity and it was
successfully sold in various part of Europe.
EVALUATION OF CURRENT STRATEGY
Regular evaluation of current strategies of any company is important for finding the
mistakes which they are making on regular basis. Their are different elements which are related
to strategies made by Vodafone, their evaluation is as follows:
Micro environment – As mentioned earlier, there are six main parts of micro
environment.
 The company – An organisation is made by various employees who are working in
different departments. Most of the current workers of this enterprise is happy with
policies of this firm and all of their departments performing well. Their finance division
is performing well by lowering down the investment which Vodafone was going to
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make because they known that post Brexit, some significant changes will come in
market. R&D department in working in 5G technology and because of their fine work
Vodafone may launch this services in 2021. Other wings of organisation like purchase
and operations are key players at the time of execution of plans (Moehrle, Isenmann
and Phaal, 2013).
 Supplier – Suppliers play key role in providing cost benefit to this firm. Because of
good connection with suppliers, Vodafone is still getting competitive advantage. Their
supply chain management does not involve wastage of resources and it ultimately
support profit of the firm.
 Public – Image of Vodafone in public is good. This company is doing lot of work for
community and all of their services and product are assist people in improving their
life. Public is queries about Internet of Things and this organisation has recently
appointed Global director for this work.
 Customers – Number of customer who are using network of Vodafone is increasing.
Service users choose this organisation because of their fine network and good customer
relationship. According to an estimate, there are 444 million customers of this firm. Out
of this huge figure, 20 millions are from UK.
 Competitors – BT and Three UK are two companies who may create more problems for
this company in upcoming time. BT is very strong in UK and they have acquired EE.
With Vodafone, their competitors is also getting strong. Intermediaries – Vodafone has made partners like Teleena, their main work is fulfil
technical needs of this company and concentrate on proportion management (Nybakk
and Jenssen, 2012).
Macro environment – Macro environment contain various factors which are not in control of
this firm. Below are some of them:
 Economic – Slow economic growth will reduce demand of premium services in UK. Poor
shape economical condition is negatively impacting this company.
 Technological – Vodafone is serious about using innovation, they are among few
companies who are proactive for launching 5G services.
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 Cultural – Trend is UK has completely changed and customers are ready more money for
getting good services. This shift in culture is one of the reason behind Vodafone's focus
on premium services. Political – Political incidents like Brexit made a huge impact on performance of
Vodafone, they may have to change their among term plans because of major changes
political environment of UK (Oke, Walumbwa and Myers, 2012).
Strategic capabilities
Analysation of the resources of this firm will assist Vodafone in finding their capabilities.
They have deep pocket and in term of technology they are capable of bring major changes in
telecom sector. By launching premium service at low price they can steal many permanent
customer of their major competitors.
Sustainability
Plans and product of Vodafone is likely by their customer. They are regularly modified
by this company but they are sustainable. 4G technology sustained for significant amount of time
and 5G will also remain in market for decent time period (Reijneveld and et. al., 2014).
Strategic direction
They are acquiring and merging their foreign business in order to become more strong
and improve their global position. They are entering in every developing economy so their
overall revenue and number of customers can increase (Wang and Wang 2012).
Innovation
5G and creative marketing campaign are best examples of innovation done by Vodafone.
They have done appreciable work in this filed and this is assisting them in achieving fine
position in market. Emergency drone, Chat anywhere etc. are some innovation which shows that
they are going to invest more money in developing something which fulfils needs of customers
and society (Zott, Amit and Massa, 2011).
CONCLUSION AND RECOMMENDATION
Vodafone has advantages of high margin. Their main aim, at the time of introducing 5G
services, should be at targeting more people including village areas because this will assist them
in attaining number one position in domestic and global market. Their prime focus is on
expansion of business and they should keep concentrating on this strategy and invest more
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money in India and African regions because these developing economy has potential of
providing billions of revenue.
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REFERENCES
Books
Bessant, J. and Tidd, J. (2015). Innovation and Entrepreneurship, Wiley
Bridge, S., O’Neill, K. and Cromie, S. (2013) Understanding Enterprise,
Bilton, C. (2007) Management and Creativity: From Creative Industries to Creative
Management, Chichester, Wiley.
Christensen, C., Antony, S., Roth, E. (2004) Seeing what’s next: using the theories of innovation
to predict industry change, Boston, Harvard Business School Press.
Davenport, T. H. (2005) Thinking for a Living: How To Get Better Performance and Results
from Knowledge Workers, Boston: Harvard Business School Press.
David, F.R (2012) Strategic Management: concepts and cases. 14th ed. Upper Saddle River, New
Jersey: Pearson Education
Dodgson, P., Gann, D. & Phillips, N. (2014) The Oxford Handbook of Innovation Management,
Oxford: Oxford University Press.
Von Stamm, B. (2008) Managing Innovation, Design and Creativity, Chichester, Wiley.
Journals
Battistella, C., Biotto, G., & De Toni, A. F. 2012. From design driven innovation to meaning
strategy. Management Decision. 50(4). 718-743.
Cavalcante, S., Kesting, P. and Ulhøi, J. 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). 1327-1342.
Gobble, M. M. 2012. Innovation and strategy. Research-Technology Management. 55(3). 63-67.
Govindarajan, V. and Ramamurti, R. 2011. Reverse innovation, emerging markets, and global
strategy. Global Strategy Journal. 1(3‐4). 191-205.
Moehrle, M. G., Isenmann, R. and Phaal, R. 2013. Technology Roadmapping for Strategy and
Innovation. Charting the Route to Success. Berlin et al.: Springer.
Nybakk, E. and Jenssen, J. I. 2012. Innovation strategy, working climate, and financial
performance in traditional manufacturing firms: An empirical analysis. International
Journal of innovation management. 16(02). 1250008.
Oke, A., Walumbwa, F. O. and Myers, A. 2012. Innovation strategy, human resource policy, and
firms' revenue growth: The roles of environmental uncertainty and innovation
performance. Decision Sciences. 43(2). 273-302.
Reijneveld, A. and et. al., 2014. Strategy for innovation in soil tests illustrated for P
tests. Communications in soil science and plant analysis. 45(4). 498-515.
Wang, Z. and Wang, N. 2012. Knowledge sharing, innovation and firm performance. Expert
systems with applications. 39(10). 8899-8908.
Zott, C., Amit, R. and Massa, L. 2011. The business model: recent developments and future
research. Journal of management. 37(4). 1019-1042.
Online
Look out for the sky(net). 2017. [Online]. Available Through:
<https://www.spotless.co.uk/trends/telecoms-trends-2017/>.
UK CLOUD COMPUTING MARKET REPORT. 2017. [Online]. Available Through:
<http://store.mintel.com/uk-cloud-computing-market-report>.
Vodafone 'sorry' for signal issues affecting Wester Ross. 2017. [Online]. Available Through:
<http://www.bbc.com/news/uk-scotland-highlands-islands-42424707?
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intlink_from_url=http://www.bbc.com/news/topics/crr7mlg0vg2t/
vodafone&link_location=live-reporting-story>.
EE and Vodafone named best UK networks for mobile internet in study. 2017. [Online].
Available Through: <https://www.standard.co.uk/tech/ee-and-vodafone-named-best-uk-
networks-for-mobile-internet-in-study-a3712006.html>.
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APPENDIX
SWOT
SWOT analysis of Vodafone:
Strengths:
 Effective customer base

Diversified portfolio
Weaknesses:
 Weak presence in United States

Ineffective marketing strategies
Opportunities:
 Utilization of new and unique methods

Use of innovative methods
Threats:
 High competition

Continuous change in requirement of people
PESTLE
Political Factor: Political instability in the UK has made a negative impact on Vodafone. It
created many problems for company at the time of making long term strategies.
Economical Factor:Low economic growth of UK is a challenge for many firms. Vodafone is
failing attain high growth in domestic market because of poor economic growth of European
nations.
Social Factors:Few years ago, telecom sector saw a major trend. People started spending more
money on getting better telecommunication services.
Technological Factors:Vodafone is focused on 5G technology and they have already spend a
huge sum in its successful launch.
Legal Factors: After Brexit, there can be major changes in the taxation policies, employment
law and some other regulations which are present in telecom sector.
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Environmental Factors:Vodafone has a vision of not harming environment. This helped them in
maintaining a good image in the market and it ultimately resulted in more number of customers.
Porter's five
Buyer power – High Power, they can easily switch to new company.
Suppliers power – Low power, there are various suppliers so they are not considered as any
major threat.
Threat of new entry – It is low. Communication industry need lot of investment which is not
possible for most of the companies.
Substitute – It is low. Technology may get outdated but it do not become outdated in short period
of time.
Competitive rivalry – Vodafone has many rivals and they have high power.
Ansoff matrix
Market penetration – Vodafone can increase their market share by offering more discount
on their services or maintaining same aggressiveness in their advertising strategy.
Product development – 5G will be best example of developing new product in same
market.
Diversification – Entering in new territory and launching latest i.e. 2G,3G or 4G service
in some African countries.
Market development – Offering mobile phones in different part of European countries is
an example of market development.
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