Detailed Business Strategy Report: Vodafone UK's Strategic Analysis

This report provides a comprehensive strategic analysis of Vodafone UK, examining its business strategy through various frameworks. It begins with a PESTLE analysis, assessing the political, economic, social, technological, legal, and environmental factors influencing Vodafone's operations. The report then utilizes the Ansoff matrix to analyze strategic positioning, exploring market penetration, product development, market development, and diversification strategies. Strategic capabilities are assessed using the VRIO/VRIN model, identifying strengths and weaknesses. Porter's five forces model is applied to evaluate the competitive landscape, and Bowman's strategy clock model is used to analyze strategic choices. The report highlights Vodafone's technological innovation, market strategies, and resource management, offering insights into its competitive advantage and strategic direction within the telecommunications industry.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.2 PESTLE analysis...................................................................................................................3
1.2 Ansoff matrix of Vodafone UK for analysing strategic positioning.....................................5
TASK 2............................................................................................................................................6
2.1 Strategic capability................................................................................................................6
2.2 VRIO / VRIN model for determining strategic capabilities.................................................7
2.3 Identifying strength and weakness of Vodafone...................................................................9
TASK 3..........................................................................................................................................11
3.1 Porter's five forces model....................................................................................................11
TASK 4..........................................................................................................................................13
4.1 Bowman's strategy clock model..........................................................................................13
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
The mobile telecommunication sector is reflecting growth worldwide. Its trend in UK is
also same. The present report will be giving awareness of various types of strategy which should
be applied in tactical, strategic and operational role of any organisation. In the present report it
has given all explanations by referring Vodafone along with key concepts of strategies of
business which lays special focus on different micro and macro factors of environment. In this
specific report wide range of theories, concepts and models are elaborated which will be
enhancing understanding and knowledge which gives appropriate support for strategic choice
and direction.
TASK 1
1.2 PESTLE analysis
Political factor: this aspect is very influential in effective way of the overall progress of
the Vodafone so they it has develop their infrastructure for the operating their work in particular
manner. From assessment, it has identified that growth of the company is highly affected from
the political stability takes place in the country. Further, government is also change some rules
and legislation in prices, taxes. The main political reasons affecting this company EU Roaming
rules the purpose of this aspect is decrease the charges of smart phones and increasing the level
of customer right within Europe and making all the decision by European Union Regulatory
Framework in telecommunication sector (Abushova, Burova and Suloeva, 2016).

Economical factor : it is refer to the essential dimension for the Vodafone. Company
will develop p in higher state so the lot of chances organisation have to expand their and open
new business. The main problem of economic is financial crisis of 2007- 2010 so Vodafone is
also affected is economical forces. This aspect is very crucial for the company it will help to
develop their business and it is also the great chances of the organisation to expand their
business and open units for the new development . If the condition of GDP is good in nation, so
that the people has earn more income and using latest technology. The overall profit is also help
to this company will achieve their goal of the business and run their work in smoothly manner.
social factor: the impact of this factor is based on the local beliefs and culture of the
people in which the Vodafone is working. Basically this organisation is European firm so they
change its preferences and policies in according to social factor and company is also operated in
according to business policies. It is very dynamical in nature and the success of this organisation
is show their flexibility in its policies that are regarding to the local culture. The main factor of
this aspect is changing business patterns that is very famous it will help to make people work
from home through effective communication while using technologies.
Technological factor : Vodafone has famous inin the latestlatest trend of technology and
it has the great innovation in the world. The main motive of this organisation is providing their
service to the customer quality services with new technological innovation. The impact of this
factor on Vodafone is providing alternatives services in communication such as online chatting,
email. This company make effective business strategies for providing their services in the latest
trend in the market. So they also introduces their latest offer with innovative ideas. They also
providing lot of facilities like internet facilities. The main mission of this company is follow
contemporary trends in their technological and communication system.
Legal factor : Vodafone face legal issues related to their infrastructure and they also
face lot of penalties. Apart many times this company face legal issues regarding to the sphere
of infrastructure so this company has face many challenges. So they people are not paying their
employees in proper compensation as comparison other competitors so its impact on their
profitability because worker leaves and join rival organisation so it is also the great risk of
leakage of innovative ideas. So they always focus on their legal issues so they maintain their
business reputation in market and follow all government rules and regulations. They also sell
their product services in effective price.

Environmental factor : Eco- friendly environment is also important for maintaining
work efficiency of the employees. They need to create healthy environment in their workplaces.
Worker feel comfortable they share their ideas in front of senior manager. It is helpful for
improving the sustainability of the business. Making effective environment company attract their
new customer though existing clients and people buy good and services in in friendly
environment. Vodafone is dynamic in nature so they order to maintain market stability and
increasing their network. This factor is related to the internal and external forces of the business.
Now day globalization is rising many problem so people have more ethical and ethic so it is
related to the social responsibility aspect.
1.2 Ansoff matrix of Vodafone UK for analysing strategic positioning
It is considered as one of the most powerful tools which helps business for enabling on
specific goods and marketing growth strategies. It gives outcome in context of different
strategies which are used for growth are mentioned below:
Market / Product Existing New
Existing Market penetration Product development
New Market development Diversification
Market penetration: In this strategy of growth, business lays special emphasis on
selling its existing products in the existing markets . In context of Vodafone its market
coverageis very wide and deep whose speed capability is also very high so it is leading in
European market. Data networks should be developed in the existing market. Data adoption is
encouraged and adjustments on basis of pricing is according to data usage for its existing
customers. The customer care has been enhanced and support and customer care as well as retail
presence and online services are also present. It had marketed portfolio in balanced way related
to all smart phones and devices which are connected with all specific brands (Hajir and et. al.,
2015).
Product Development: Under this growth strategy, business has attempted for
introduction of new products in markets which are existing. In this, it has introduced a new
4G/LTE technology which is most popular in present scenario. In the same series, it has given

very smart connection devices such as Vodafone 3G station and Wi-Fi. It has given customers all
integrated solutions for mobile communication. In the recent era, it has combined mobile and
fixed services such as Vodafone DSL route. All the application services are also given along
with the introduction of modern and simple methods for payments. The most innovative product
which has been developed is Vodafone TV.
Market development strategies: In this specific business, it has attempted for selling its
all existing products to new market. In the series of market development, it adopted mobile
voice, SMS and data at an affordable which is present in attractive market across many countries
especially India and Africa. It has introduced Vodafone Web box, M-pesa and browser of Opera
mini. All these strategies are used for developing the market in a significant manner.
Diversification: In this diversification strategy, business has been introduced and even
new products in new markets. It is considered as a risky strategy but usually, it mitigates risks
and give higher returns. In context of Vodafone, it provides new services such as machine to
machine facility. It also diversifies in smart metering, mobile advertising is pushed, care
telematics are tracked and near to field communication and most essential aspect is 3rd part
billing. It has also involved itself in partnership with Samsung, HTC and Microsoft.
TASK 2
2.1 Strategic capability
Strategic capability refers to competitive position which creates ability for performing at
a high level in various ways or in simple words it can be illustrated as strategic success which
has been enabled by different organizational capabilities in very distinctive manner. In the
present era, various requirements for identifying and developing innovative capabilities for
responding on basis of customer demands or different competitive threat. If this is not performed
in a systematic manner then organization will be at risk and it will become obsolete. Vodafone
has achieved success because of its various strategic capabilities and it’s interlink with different
internal and external factors.
For sustaining in competition, it is mandatory that organization should be innovative and
before that, there should be presence of identification on factors which make it innovative
(Khanagha, Volberda and Oshri, 2014). For assessing the Vodafone’s capabilities, it has

identified its current capabilities and resources in context of successful organization in industry
of telecommunication. Its resources are categorised in two ways such as:
Tangible resources Intangible resources
Vodafone has segregated its tangible resources
in four categories which are financial,
technological, physical and organizational
structure.
In this category, resources are classified into
people independent and dependent resources.
All these resources do not present similar importance to strategy of Vodafone as
technological, financial and structure play an essential role and ordinary importance has been
gained by the physical resources. On its contrary, people dependent and independent resources
such as innovation and human resources, organisational culture and reputation give a huge
importance to strategy of Vodafone. The most substantial strategic capability which has been
introduced in context of operation is that it gives services of telecommunication at very low cost
along with the best quality which is guaranteed. On the basis of development of technology,
Vodafone has created an ability for exploiting opportunity of technology and it has developed
and applied technology. In context of human resources, capabilities are developed for training
and recruiting competent personnel on the basis of technological creativity. It also motivates and
compensates every employee for technological innovation in large volume.
On the basis of activities of infrastructure, capabilities are developed for promoting and
recognising various aspects of innovation, planning and financing for innovation of technology
which integrates every functional department along with evaluation of technological innovation.
It had also supported legally and helps in accomplishing necessary government support for
finance which usually protects technological innovation. The strategic capability of Vodafone
has been discussed and its resources reflect all strategic capability which are grounded on basis
of technological innovation which gives huge support by its resources which are innovation
friendly intangible and tangible. Because of presence of its extreme association among
capabilities and resources, Vodafone has gained ability for handling its both external and internal
environment as well.

2.2 VRIO / VRIN model for determining strategic capabilities
VRIO analysis provides and very analytical technique for evaluating resources of any
organization along with its competitive advantage (VRIO framework, 2018). It is acronym which
is originated from initials of important dimensions such as:
Value
Rareness
Imitability
Organizations
The strategies which were developed by management for considering as in first option, it
is very innovative and organization has major requirement for utilizing existing technology
which is forming various alliances along with providers of internet communication and
manufacturers of phone. In the same series, second option Vodafone has been recommended for
entering American market place which must use different aspects of models of business which
are existing
Value: In context of analysing its technology and resources, it is providing strong
network infrastructure which gives full support to its operations. It has ability for giving various
mobile services such as 2G, 3G and 4G network via GSM which consists in various subsidiaries
of operating mobiles. It also operates GPRS connection which helps in enabling wireless access
through different mobile devices such as internet. It has also launched high speed downlink
packet access technology which transmitted data speed up to 5.2 megabits per second. The
network infrastructure provides very valuable resource which helps organization for responding
growth of customer requirements with quality services in very efficient manner in present and
future as well (Oteri, Kibet and Ndung’u, 2015).
Rarity: In this dimension, Vodafone consists of very rare or limited resource. It provides
valuable resources but they are not rare as organization is in competitive conformity. It provides
wireless communication which is not rare in telecommunication industry and it might be
expensive for its competitors for imitating. The market share of Vodafone in UK is very strong
with market leader position which is considered as most valuable and rare resource which

increase the brand image of Vodafone and it will replicate its proper foundation for entering in
potential markets.
Imitability: The competitors of Vodafone must not be able to face disadvantage in
context of cost but they should be able to imitates its resources. The organization must
implement strategy in context of financial resources. While leading market position it is
considered as most important resource which is imperfectly imitable and via it all competitors
will face cost disadvantage for developing or obtaining it.
Organizations: In context of association of organization it had drawn its relation with
HTC, Microsoft and Samsung. The market of mobile phone is saturated with very small
differentiation among its competitors. There are various resources which are interlinked with
competitive advantage and simultaneously R&D in very strong aspect and exclusivities. Its own
brand products allows organization for having proper control on their resources which will be
giving outcome very hard for gaining access from its competitors. It has also implements
strategy of low cost which will directly leads for lower margins which might be subsidised by its
alternative operations.
2.3 Identifying strength and weakness of Vodafone
Strength: Its main strength is that it consists of operation of home region as first mobile
network in United Kingdom. It has one of auspicious advantage of popularity and it has history
of excellent customer service along with innovativeness. Ion the context of market influence it
provides competitive advantage.
 Marketing: Vodafone advertise or markets its product in very legendary aspect. Its pug
is known across every country for following its users everywhere. In the same context its
zoozoo's was considered as most brilliant and adorable campaign which has transformed
many users as die hard fan of Vodafone.
 Premium cost: There are most telecom operators which are penetrating in market but
Vodafone is always creating competitive advantage by differentiating its services on
daily basis or regularly. There are various users who has thinking that Vodafone is above
as it is all because of marketing and communications. By its outcome, Vodafone gets
premium from their customer and it helps in floatation of margin and on other side, other
telecom operators are struggling for earning margin in positive aspect.

 Huge market coverage: Its main feature to be considered as strength as it is referred by
wide network and distribution cover (Yaseen, Dajani and Hasan, 2016).
Weakness: There was a merger which had dropped Vodafone at third position in context
of market share which was of orange and T-Mobile which might decrease its market control and
provides manipulative edge.
 Decrement in subscriber base: The base of subscriber is decreasing from last 4 year. It
is considered as one of major issue for Vodafone which tracks global market scenario.
There is requirement of strengthening its core value and for implementing strategies for
acquiring more customers.
Illustration 1: Decrement in subscriber base
(Source: Jayanthaa and Geethab, 2014)
 Decrement in brand valuation: It is considered as one reason for decrement in brand
valuation of Vodafone. The base of subscriber and brand valuation of Vodafone is
considered as very strong for beginning. There is drop in brand valuation for 1 last year
which was phenomenal.

Illustration 2: Decrement in brand valuation
(Source: Saebi, Lien and Foss, 2017)
TASK 3
3.1 Porter's five forces model
It consists of five components such as:
 Bargaining power of buyers
 Bargaining power of suppliers
 Threats of new entrants
 Threat of substitutes
 Rivalry within market
Bargaining power of suppliers: The suppliers usually comprises form of organizations
which gives technology infrastructure with different mobile operators which is required for
setting mobile operations in country. In the same series, mobile manufacturers are also
considered as suppliers in this specific industry because of presence of huge number of supplier,
its bargaining power is at moderate level. In the scenario of Vodafone, it is termed as most
favourable. It is referred as largest supplier and it creates competitive bargaining edge in case of
supplies over its rivals. It has ability for maintaining cost of customer down and to earn margin.

Bargaining power of buyers: Customers are considered as king of UK's telecom sector
as they prevail benefits of significance of bargaining power. While regulating industry's nature,
there is presence of competition which is cut throat among its rivalry organizations. This
competition provides advantage to customers who got different services and product at price
which is relative. In the context of Vodafone, trend reflects preference of customer and power of
bargaining which decreases tariffs and offers by competitor. There are presence of various
alternative items like communication on basis of internet are threat.
Threat of new entrants: In the UK telecom sector it is considered as most significant
factor because of presence of potential growth. For decreasing level of this threat it can
undertake various measures such as:
 Requirement of huge capital investment for setting up operations of telecom.
 Loyalty of customer of specific brands.
 Benefits of economies of scale by present organizations in market (Moutinho and
Phillips, 2018).
In case of Vodafone, its threat is weak for every operator due to regulations of government and
even spectrum limitations provides restriction for maximum number of operators. The
competition which is already there is considered as most effective threat for new entrants.
Threat of substitutes: The UK's telecom sector has threat due to its substitutes is very
high because of presence of same services and products, less cost for switching and very ease in
accessing information about product. The organizations have to apply new and innovative
technologies for achieving competitive advantage above its competitors. Vodafone consists of
cost leadership program in very cost effective manner which will put it above its competitors. It
is not immediately threatened by its substitutes in direct manner but is alternative might give
danger zone so its services must be diversify.
Rivalry within market: The telecom sector of UK has very high intensity of
competition. The rivalry organisations provides both price and non price strategies. The other
indicator for basis of intense competition is considered on level of budgetary allocation for
purpose of marketing and advertisement. And in same series expenditure on R&D in context of
developing innovative technologies which provides organization for attaining benefit over its
rivals. In context of Vodafone, it can attain competitive advantage by customer loyalty towards