Business Strategy Report: Vodafone's UK Telecommunication Analysis

This report provides a detailed analysis of Vodafone's business strategy, focusing on its operations within the UK telecommunications market. It begins with an introduction to business strategy and Vodafone's global presence. The report then delves into a PESTLE analysis to assess the macro-environmental factors impacting Vodafone, followed by an application of Ansoff's matrix to evaluate strategic positioning. The internal environment is analyzed using the VRIO model to identify Vodafone's strategic capabilities, strengths, and weaknesses. Furthermore, the report evaluates competitive forces to inform decision-making and strategic actions. Finally, it explores the application of various theories and concepts to devise strategic plans for the organization's future, concluding with a summary of findings and a list of references.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
P1 PESTLE Analysis for UK telecommunication market.....................................................3
TASK 2 ..................................................................................................................................6
P2 Analyse the internal environment and capabilities of the organisation. ..........................6
TASK 3 ...........................................................................................................................................8
P3 Evaluate competitive forces for making better decisions and actions. ............................8
TASK 4 ................................................................................................................................11
P4 Apply a range of theories , concepts and devise strategic planning for the organisation. 11
CONCLUSION ............................................................................................................................13
REFERENCES..............................................................................................................................14
.......................................................................................................................................................15

INTRODUCTION
Business strategy is related with the plans and policy formulation which is basically done
with the motive of achieving appropriate goals and target in the best possible manner. Such
policies and strategies are undertaken after evaluating the marketing conditions. As with the help
of these organisations are able to achieve the competitive position in the best possible manner.
Measures for the formulation of business strategies are generally taken by the top authorities of
the organisation. The major motive behind this is to satisfy the needs and demands of the
potential customer's. Better competition can be given to the competitors if the management of the
organisation is successful in making better strategies. The organisation chosen for this report is
Vodafone which is the top multinational telecommunication company of UK. The organisation is
currently operating in 25 countries across the world. Vodafone was introduced in 1991 with the
motive of satisfying the customer's in the best possible manner(Anderson and Bieniaszewska,
2015). Major topics covered in this report are analysing the impact of macro environment on
Vodafone, identifying the capabilities of the organisation for sustaining in the market for longer
period of time, evaluating competitive forces and using some theories for making better plans
and strategies for the future.
TASK 1
P1 PESTLE Analysis for UK telecommunication market.
PESTLE analysis is the framework which help company to monitor the macro
environmental factors that help an organisation to understand different situation that impact on
business activities in the upcoming future. Usually it is used when an organisation wants to enter
in new market or they want to start new business. In this task PESTLE is implemented along
with Ansoff's matrix in context of telecommunication market of UK.
Political factor- The political factor covers all policy that are created by government to
avoid discrimination in different companies. It includes trade policy, foreign exchange policy
etc. by which company manage their business in particular country which help them to operate
their business operations easily. As in this factor company has to develop their strategy by which
they do not go against any law that is create by ruling government parties. It is essential for

Vodafone that they operate their business operation in each country as per laws of their
government.
Economical factor- The economic factor includes economic growth, interest rate,
exchange rate and unemployment factors by which economy of country is directly impacted. As
purchasing power of consumer is directly relating with economic factor. In the circumstance of
telecommunication sector Vodafone has to manage with its daily operation factors. For this
Vodafone has to manage its prices for its products as economy of country.
Social factor- Generally social factor present demographic characteristic of society. In
which company want to operate their business as compare to each country it is different from
their origin country of organisation. It includes trend, gender and attitude of customer to buy
product. In context of Vodafone telecommunication industry is very dynamic for this company
make strategy by which they sell their product without effecting the value and norms of society.
As they are major factors which impact on sell of company products by increasing or decreasing
the sale of their products.
Technological factor- The innovation or changes to make product that bring more
effectiveness or increase value by which company increase the number of sale of its product. The
motive of an organisation in technological sector is to bring innovative ideas it help them to
develop competitive advantages against their rivals. Need and demand of society is changing day
by day so for this Vodafone develop and execute technique by which they provide best services
in all segments of market. It also helps management of Vodafone to cover unexplored area which
increase their customer base.
Legal factors- This factor help business to follow the law and legislation by which
organisation does not violate rules of country. As different laws such as employment law,
copyright and patent law help business to operate business activities ethically and successfully in
each country. Vodafone is operating their business at global level so it is essential for them to
aware about law and legislation of country in which they are organising their business activities.
As if more restriction is present that organisation has to bound their business which generate loss
for company.
Environmental factors- The environmental factors include all ecological aspect of
society. The aspect which relate with this is weather, climate and environmental policy by which
sale of company product is impacted. In order to achieve growth and success Vodafone has to

manage resources and try to save the environment it help increase their goodwill and attract more
customer for business by promoting them as CSR practice.
Ansoff's matrix to analyse organisation's strategic positioning
Ansoff matrix work as strategic marketing planning tool which relate with marketing
strategy it includes four ways which help business to expand and grow their business in market.
For this Vodafone implement this matrix as it helps to expand business in unexplored area. In
this task Ansoff table is shown in context of Vodafone.
Market penetration- In this company promote their existing product in present area it
helps them to gain loyal customer for their business. This is cost effective as for this company
has not to invest more amount of money and efforts to sell their product in society. For the case
of Vodafone, management apply strategy to monitor their daily operations because it reduces risk
and increase sell of company products and services. As it is easy for company to sustain and
retain business for longer period because Vodafone is operating their business at global level.
Market development- With implement of market development company try to enter into
new market with their existing products. As it help company to enter into different segments and
attract more customer for the business. Along with this the number of transaction is increased
that generate more profits because new customer purchase the product. In circumstance of
Vodafone it provide more benefits because existing products of company are design and
developed in a way which fulfil need and demand of customer.
Product development- For product development, research and development team of
company explore innovative ideas by which their new products match with the need or demand
of existing customer or market. For this difference options are present that help management to
find new products such as merger, acquisition, joint venture etc. For Vodafone it is difficult and
complex process because exiting customer does not want update product as there are substitute
products are present in market which provide inferior quality products at low price.
Diversification- This is the last strategy for growth and also most challenging situation.
Diversification process refer to develop new product with in new market it is challenging
situation because has to bear heavy risk as it is totally new process with different
strategy(Chrisman, Hofer and Boulton, 2013). In the case of Vodafone company invest huge
money as strong research is required for develop new products in market.

TASK 2
P2 Analyse the internal environment and capabilities of the organisation.
Strategic capability – It is concerned with analysing the ability of the organisation for
achieving the competitive advantage in the best possible manner. Strategic capabilities are
generally used to compete in the market in order to increase the market share and profitability.
With the help of strategic capabilities management of Vodafone will be able to shape strategies
with the motive of implementing them into action plan. Satisfaction level of the potential
customer's can also be increased by making best use of the strategic capabilities. It basically
includes analytical and creativity thinking.
VIRO Model- It is the method of analysing the capabilities of the organisation and
making appropriate plans for achieving the competitive advantage for the longer period of time.
With the help of this each and every aspect related to internal resources of Vodafone can be
analysed in the systematic and coordinated manner. This model includes four elements which are
valuable, imitable, rareness and organisation. These factors can directly or indirectly help the
management of Vodafone to achieve its goals and objectives in the effective and efficient
manner. This model is briefly discussed below-
Resources Valuable Rare Inimitable Organised
Phone Phone - - -
Networking
System
Networking
System
Networking
System
- -
Spectrum Spectrum Spectrum Spectrum -
Accessibility Accessibility Accessibility Accessibility Accessibility
(Source: VRIO Model, 2019)
Valuable- It is related with analysing that the resources of the organisation are able to
add value for using the opportunities in the best possible manner. If the available resources are
valuable than it can directly help the organisation in increasing the customer value in the
systematic manner. Some of the valuable resources of Vodafone are its networking system and
accessibility. The financial resources of the organisation are valuable as it helps in making best

use of the available opportunities in the external environment. Vodafone also considers its
employee's as one of the best valuable resource. As they help the organisation in increasing the
productivity in the best possible manner.
Rare- These are such resources which can only be used by some of the organisations in
the market. It is very much important for every organisation to have some rare resources, as with
the help of such resources best use of the available opportunities can be attained. The patents of
Vodafone is rare. Distribution network of the organisation is also rare and competitors will not
be able to copy this because it generally requires high investment.
Imitable- It is the condition where resources of the organisation can be easily copied the
competitors available in the market. The financial position of Vodafone is easily imitable
because its competitors can easily achieve this by increasing their profit in the limited period of
time. The skills and knowledge of the employee's working in Vodafone can also be copied by
other employee's of organisations. As competitors can make plans for providing proper training
and development programmes, so that special skills can also be acquired by them(Ghezzi,
2013).
Organisation- It is quite essential for Vodafone to make proper plans for using its
resources in the best possible manner. As this can directly or indirectly help the management of
the organisation in achieving individual and organisational goals. Plans and strategies of
Vodafone can help in increasing the satisfaction level of its employee's and customer's in the best
possible manner.
With the help of above VRIO model Vodafone will be able to properly analyse its
strategic capabilities for making better plans and action for the future course of action. By
identifying the strength and weakness organisation will also be able to know what steps and
measures can be taken improve the present situation of the market. As with the help of this
management of Vodafone can make necessary changes in its working structure. The strength and
weakness of Vodafone is briefly discussed below-
STRENGTH
Market coverage- The organisation is famous for its wide distribution and good network
coverage. Organisation is currently operating in 25 countries all over the world and the
satisfaction level of its customer's is also continuously increasing. Vodafone is able to cover
large market because of its unique strategies and plans.

Marketing- The marketing strategies used by Vodafone is able to give tough competition
to its competitors. Vodafone Pug and Zoozoo is considered as one of the biggest and successful
marketing strategy for the organisation. As with the help of its strategy organisation was able to
attract more and more customer's all over the world. Organisation is also known for its various
campaigns which is one of the biggest strength for Vodafone(Gupta, 2012).
Brand valuation- Brand valuation of the organisation is the biggest strength for
Vodafone. Organisation has very high brand equity because its potential customer's are satisfied
with the services and products offered to them.
WEAKNESS
Subscriber base- The subscriber base of Vodafone is continuously decreasing in the
global and domestic market. This is because telecommunication industry has very high
competition, so there is huge risk of shift in customer's from one brand to another. Due to this
weakness the sale and profitability of the organisation is directly getting affected.
Legal proceedings- Organisation is involved in various legal cases and due to this brand
image of the organisation is continuously decreasing. There are various lawsuits which have
been filled against Vodafone. It is becoming essential for the organisation to clear its image
regarding such cases. As if the management of the organisation is not successful in doing this
than chances of loss for the organisation will be increased(Hofer, 2012).
Huge debt- Organisation is currently under the situation of high debt. The organisation is
facing this situation because its competitors are charging low mobile tariffs and due to this
Vodafone is forced to decrease the price of its products and services.
TASK 3
P3 Evaluate competitive forces for making better decisions and actions.
It is quite essential for the organisation to properly analyse its internal and external
environment. As by doing this management of the organisation will be able to make better plans
and strategies for the future course of action. Whereas if the organisation is not successful in
doing this than chances of loss and failure for the organisation might be increased. The
telecommunication sector of UK has very high competition and due to this it is essential for
Vodafone to know the plans and strategies for its competitors. As by doing this organisation will
be able to identify right measures and steps for increase the market share. There is also high

chance of shift in customer's form one brand to another, so to reduce this Vodafone needs to
evaluate and analyse the competitors strategy in the proper manner. Porter five force model can
be used by the organisation for making better plans and actions in the systematic and desirable
manner(Igor Ansoff, 2017).
Porters five force model- This model is used to identify and analyse various competitive forces
of the organisations prevailing in the market. With the help of this management of the
organisation will be able to know the strength and weakness in the systematic and coordinated
manner. This model is basically used to identify proper strategies regarding the organisation
structure for attaining competitive strategy in the best possible manner. The various elements of
Porters five force model is discussed below-
Industry Rivalry- It is concerned with the level of competition available in the particular
industry. There high very high competition available in the telecommunication industry and due
to this it becomes essential for Vodafone to make innovative plans and strategies. With the help
of this factor Vodafone will be able to analyse the strength and weakness of the competitors.
Threat from industry rivalry for Vodafone is very high due to stiff competition in the
telecommunication industry. Some of the major rivalries of Vodafone in UK are EE,O2 , etc. if
Vodafone is able to know the strategies of its major competitors than organisation will
automatically able to survive in the market for longer period of time.
Bargaining power of supplier- It is related with the bargaining power of suppliers
regarding the price of products and services. Suppliers of Vodafone has high bargaining power
because organisation generally operates in greater profit margins as compared to its competitors.
The market share of the organisation is very large and due to this Vodafone is able to easily
make changes in the price of the products(Kipley, Lewis and Jeng, 2012). Due to this it
becomes easy for Vodafone to maintain low price from suppliers. With high bargaining power
of supplier organisation is also successful in increasing its sale and profitability in the best
possible manner.
Bargaining power of buyer- The bargaining power of buyers is very high in the
telecommunication industry. This because there are large number of competitors available in the
industry. The products of such type of industry are very limited and also has lack of
differentiation. Due to high bargaining power of buyers it becomes essential for the organisation
make necessary changes its working structure. This is done by reducing the price of products

with the motive of retaining customer's in the best possible manner. Vodafone is able to achieve
desirable position in the market because better plans and strategies are being made to retain its
potential customer's.
Threat of substitutes- Organisation faces low threat of products and services in the
market. Vodafone operates with focused cost leadership strategy and due to this it is not essential
for the organisation to make desirable changes in its pricing strategies. Organisation is able to
produce and provide the products and services at very low price to its consumers, and it
becomes difficult for its competitors to provide same products with low prices. Due to this threat
from the substitute is generally low for the organisation. Vodafone can improve this situation by
analysing the need and demand of this customer's and than can make plan accordingly. As with
the help of this its sale and profitability will be directly increased.
Threat of new entrants- The threat of new entrants for Vodafone is very low because
there are various kinds of barriers which the organisations has to overcome before commencing
its business in market. Organisations needs to pay high licensing fees and due to this it becomes
difficult for the organisation to sustain in the market for longer period of time. The infrastructure
and setting up cost is also very high and most of the organisations are not able to afford such
high cost. Telecommunication industry also requires to adopt latest technology for attracting
more and more customer's(Oakland, Tanner and Gadd, 2012). It becomes difficult for the new
entrants to make major changes in their working structure as they are not able to invest high cost.
Vodafone can make best use of this opportunities by using new and innovative ideas for
increasing the market share. This will also lead to giving tough competition to the various
competitors which are there in the same industry.
With the help of this model management of Vodafone will be able to know what measures and
steps can be taken to attain a better position in the market for longer period of time. As this
model will allow Vodafone to make necessary and desirable changes in the plans and strategies.
With the help of this model internal environment of the organisation can also be maintained in
the best possible manner because it will help in guiding the superior and subordinate of the
organisation for making plans in the effective and efficient manner.

TASK 4
P4 Apply a range of theories , concepts and devise strategic planning for the organisation.
It is essential for the organisation to make use of proper theories and model for achieving
the targeted goals and objectives in the systematic and coordinated manner. As proper use of
theories will guide the management to take logical actions for the future course of action.
Vodafone can make use of the Porters generic strategy for achieving the competitive position in
the best possible manner(Šebestová and Nowáková, 2013). By using this strategy model
organisation will be able to know that its plans are appropriate or not for thee future. Since the
marketing conditions of telecommunication industry is uncertain and involves high degree of
risk, so by using this strategy organisation can try to decrease the chances of risk regarding its
profitability and sale. Various elements of porters generic model is discussed below-
Cost leadership- It is concerned with making strategies related to the cost of the
organisation. This element help in reducing and eliminating unnecessary cost for the
organisation. The major objective of Vodafone behind using this factor is to become lowest cost
producer in the telecommunication industry. It is related with organisations offering standard
products to its potential customer's. Vodafone is making best use of this strategy by providing
various discounts to the customer's. Major reason behind this is to increase the sale and
profitability in the best possible manner(Shaw, 2012).
Differentiation- It is related with producing and providing different and unique products
to the customer's as compared to the competitors. The major focus of this factor is to create value
in the mind of customer's. Differentiation in the product can be done by providing new and
unique products and services to the customer's. Management of Vodafone is using this theory by
using new and latest technology for increasing the satisfaction level of the customer's.
Organisation has also introduced various new plans for giving better experience to the
customer's. Major changes were also done in the prices of the products this means pricing plans
were made as per the paying capacity of the customer's in the particular market.
Focus strategy- It is related with making plans and strategies as per the need of
particular group of customer's. In this factor customer's are divided into various segments and
groups. This is usually done with the motive of increasing brand loyalty among the customer's of
a particular area. As in this different set of customers are being focused upon with the motive of
increasing sale and profitability. If the management of Vodafone is able to make best use of this

strategy than organisation will be able to achieve competitive advantage for the longer period of
time.
Vodafone can make use of this strategy for maintaining internal and external environment of the
organisation. As in this each and every element will be analysed in the effective and efficient
manner. Proper formulation of strategic management plans will also help the organisation in
sustaining in the market for longer period of time.
Strategic management plan – It is the systematic plan which is basically used to
communicate the goals and objectives of the organisations to the employee's and stakeholders.
This plan is basically used to make best use of the available resources and to increase the
profitability. Major focus in emphasised on reducing weaknesses of the organisation.
Executive summary- Vodafone is one of the biggest telecommunication organisation
which works with the motive of satisfying is customer's in the best possible manner.
Objectives- The major objective of the organisation is to increase the sale within limited
period of time. This objective can be achieved by the organisation by making use of Bowman's
strategy clock model. This model is briefly discussed below-
Low price and low value added- The products of Vodafone is not differentiated and the
customer's demand low price products for satisfying there needs and wants. This means the price
charged by Vodafone is low and the value added is also low.
Low price- The objectives of Vodafone will be attained by charging low price form the
potential customer's, so that competitive advantage is achieved properly. Due to this organisation
will operate on low profit margin.
Hybrid- It is concerned with low price and product differentiation strategy adopted by
Vodafone.
Risky high margins- The positioning strategy used by Vodafone is the riskier process as
the chances of failure is very high.
Monopoly pricing- Vodafone can make plans for charging monopoly price for its
services. Under this strategy organisation is liable to charge high or low price according to the
situation.
Loss of market share- under this strategy generally high value is being charged by the
competitors operating in the market.