Analysing Vodafone's Strategies: Macro, Internal Factors & Telecom

This report provides a comprehensive analysis of Vodafone's business strategy, focusing on the impact of the macro environment and internal capabilities. It examines political, economic, social, technological, legal, and environmental factors influencing Vodafone's strategies, utilizing PESTLE and Ansoff matrix frameworks. The report evaluates Vodafone's internal environment through VRIN/VRIO analysis, highlighting strengths such as a large subscriber base and weaknesses including exposure to sluggish European economies and intense competition. Furthermore, it assesses the UK telecommunications sector using Porter's Five Forces model and explores strategic options for Vodafone to improve its market position. The analysis concludes with a strategic management plan, offering tangible and tactical recommendations for the organization's future direction. Desklib offers students access to this and many other solved assignments.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION................................................................................................................................3
Task 1- The external environment........................................................................................................3
P1 analyse the impact and influence macro environment of Vodafone and its business strategies.
.....................................................................................................................................................3
M1 Critically analysing macro environment...............................................................................4
TASK 2- The internal environment and organisation capabilities..............................................4
P2 Vodafone internal environment and its capabilities.........................................................................4
M2 Critically evaluating strengths and weakness.......................................................................6
TASK 3 analysing the telecommunication Sector......................................................................6
P3 Evaluation of United Kingdom telecommunication sectors using Porter's five force model.6
M3 Most appropriate strategies to improve edge and market position.......................................7
P4 Evaluation the strategic direction and option available for Vodafone...................................7
M4 Producing strategic management plan that is tangible and tactical......................................8
CONCLUSION....................................................................................................................................9

INTRODUCTION
Business strategy refers to establishment of firm objective and benchmarking that enhance
and encourage existing approaches of company. The aim of these report is to understand and
awareness about the various types of plan of action which could be utilised in an functional, tactical
or important part for any company. Further, to more specific knowledge the chosen organisation
Vodafone from a telecommunication sector of United Kingdom which will highlighted on impact
and influence the macro environment and it business strategies as well strengthen and weakness of
the cited firm. The proper analysis of telecommunication industry of UK which the help of Porters
five force model. At the end, analysis the strategic direction and option available for the selected
organisations.
Task 1- The external environment
P1 analyse the impact and influence macro environment of Vodafone and its business strategies.
For each and every organisation there are certain factors which will impact on firm
performance and it business strategies. There are various way in which firm can get effective
evaluation outcomes to determine the impact and influence such as follows:
Pestle analysis of Vodafone
Political Factor: These is the main macro environment factor which had impacted on the company
and its business strategies. The regulation introduce by the government in which the mobile phone
licences are force fully controlled and are highly costly. In various instance this tight measure are
implemented by the ruling part in terms of decrement mobile gadgets' utilisation for kinds due to
some health problems. The another aspect is infrastructures to create an assistance with the help of
high facilities and the network usually need prior approval from the supreme body as well
government.
Economic Factors: It is also a main factor which can be impacted on the Vodafone due to slow
economic performance of the nation. The recession has been decrement the overall consumer
paying capacity hence, there is price war in between various firms which were deal in the
telecommunication industry provide the similar services to drive the price of calls and SMS to
increase more clients. The other aspect is cost of involves in licensing in which new technology of
3G and 4G which was initiate and face the situation of bid war in between organisation but end with
up with a huge expense of acquiring this advancement of technology
Social factor: This can be the major factor for the Vodafone in which there is various nation
specifically in Europe it is in pattern to individual feel better to have a mobile phone. The market in
such continent is so high that each and every mobile company is associate there business (Pisano,
2015). The demographic in the aspect in which the mobile phones tend to be utilised by youth in
society. In a nation where the crowd is ageing which is the trend across the UK.
Technological Factors: This is factor had changes the entire Telecommunication industry as well
Vodafone. The introduce of 3G technology have assisted to the cited firm to interact easily through
their telephone and they were capable to content work like the mobile net or famous interpersonal
web sites like Facebook straight approachable from the telephone set.
Legal Factor: The changes in legislation and other rules as well regulation which will impact on the
Vodafone. There are various laws which are regulated by the activity of enterprises for instance, the
Sales of Goods Act 1974 which state that each and every goods must be effective for the aim of
intended.
Environmental Factor: These are the another factor which can be impacted and influence to
Vodafone. But the firm had accepted a usage session for gadgets in terms to assist the situation and
reprocess and utilize the raw material utilised in the phone.
Ansoff growth vector matrix to analyse the firm strategic positioning.
These frame work will help to make strategy assist to find out corporate growth opportunities as

well evaluation organisation based on market.
Thee are four growth strategy as per the Ansoff such as follows:
Market Penetration: It is a technique utilised to enhance company share in the market with its
current product line. The Vodafone current strategy is remained a market leader consist of different
stakeholders. Therefore, the customer are more attracted towards the competitor which impact on
the performance of the Vodafone.
Product development: Vodafone is providing the various kinds of services and goods to the
consumer which will help to segment as well positioning the marketplace in this piece of land. The
introduction of 4G services are more effective and offer more the just voice calls and messaging
(Meckling, 2015). The other development in their goods and services to attract more customer.
Market Development: These are the main aspect for the Vodafone to focus on the market
development in which introducing up part excluded market segment through pricing polices such as
offering discounts on various goods and services of the organisations.
Diversification: As the diversification involve in taking new products to new customers. It can be
related to market in which the clients and gods are some brand-new, there is a common sense active
the determination kind awareness to the outer global.
M1 Critically analysing macro environment.
Macro environment are the major factors in the business environment which brings both
positive and negative influences. Vodafone would get affected from the changes in external
environment or might be get new opportunity to grab. Market changes brings new market
opportunity for business firms which is necessary to adopt by the companies. This makes
productive work and better advantage growth. All these supported full scale condition factors
according to the Meckling, (2015) like that of either lawful or natural or that of mechanical would
influence the key basic leadership of Vodafone. Like on the off chance that they would be whenever
intending to dispatch their item into new market then they could examination and note down every
one of these variables which would influence their arranging and basic leadership process also. For
example on the off chance that they are not recognizing expanding expansion rate or diminishing
GDP development rate of nation then they would not have the capacity to set up their cost by them.
Pisano, ( 2015) likewise said that if Vodafone is recognizing every one of those vital factor that are
affecting their business the most then just their choices could be made appropriately
TASK 2- The internal environment and organisation capabilities.
P2 Vodafone internal environment and its capabilities.
The strategic capability refer as the enterprises which have various set of capability, resource
and skill which will forms a large term competitive benefits for the company. In other words,
strategic capability means ability to successful employ competitive strategies which allows it to
survive and increase its value over time.
The VRIN/ VRIO analysis:
It is an analysis of analytics techniques brilliant for the assessment of organisation resources and
thus competitive benefits. VIRO stand for value, rareness, imitability, organisations.
Value: The economic scale due to lager infrastructure of the organisation which brings and value
and shows that Vodafone have huge market credibility. The brand values of the company have also
makes an impact on the customer as well other competitor in the market.
Rareness: The more important aspect is the global presence makes new corner to the United
Kingdom recognised Vodafone brand instantly, huge particular stuff for unifies mobile services.
Imitablity: the brand which provides easy access to the market segment, Vodafone has a culture of
being a market leader however the culture does not promote ceasing opportunities as they arise.
Organisation: It is the firms organized it exploits the full competitive potential its resources and

capabilities.
These all are the factor which considered as the most important for resource capability of the
Vodafone. The more the organisation will focus on these issues which can help to bring an effective
development and growth of the company.
Strength and Weakness of Vodafone:
In each and every firm there are certain strong areas as well weak side. The more they organisation
will focus on the
Strength
World's second greatest adaptable expert association by endorsers: Vodafone's client base of 435
million in assorted environment of global is its most noteworthy quality. It is either the marketplace
innovator or is among the rule 3 maestro gathering in all nation. Such strong place routinely
construes money related utilize, greater capacity to ingest perils and more important ability to
control the marketplace course.
Geographic wide-ranging enterprise: Looking at about at the nation recorded preceding, it is
definitely not hard to induce that Vodafone has a closeness in an extensive variety of compact
markets. Made marketplace like Germany and UK bring larger piece of wage. By then there are
industry like India that have classical improvement possible both in voice and information. So
declining business in one area can be reimbursed by improvement in another.
Created and propelled arrange: While not by any extend of the creative energy the pioneer of
LTE deal with dispatch in its zones of development, Vodafone passed on LTE and speedy remote
systems in a large portion of its business parts inside a few times of range task or regular gathering
change. In 2010, Vodafone had LTE running in Germany all of a sudden. Inside the going with 2
years, they tailed it up by driving LTE in Portugal, Romania, Spain, United Kingdom, Australia,
South Africa and different unmistakable countries. Structures in India, Egypt and Turkey are
likewise in the midst of the time spent upgradation. So furthermore, in the basic bit of the most
recent decade, the director was solid in giving 3G associations. The general point of view of
Vodafone's remote system is sure in various nations.
Solid brand acknowledgement: Aggressive framework, creative progressing, sensible client
association and operator pleasing strategies have helped Vodafone in setting its place among the
better brands of the world. This makes it direct for them to win new clients and hold the present
base.
Weaknesses
Drowsy financial conditions in Europe: The landmass achieves in 66% of the compensation for
Vodafone. Accordingly, the official held on when the European economy was frail over the traverse
recently years. A touch of the most exceedingly evil hit countries were Greece, Spain, Portugal,
Ireland and Italy. By plausibility, Vodafone has gigantic nearness in every last one of these nations.
Lower discretionary capital and high joblessness prompted clients to shed their remote bills. The
region is starting at now demonstrating recovery yet the street to recuperation is long.
Vicious rivalry all over the place: Tenacious rivalry all over the place: In its country, Vodafone is
pitched against EE (Orange and Deutsch Telecom), Telefonica O2 and Hutchison 3 (Three) form. In
the other country there is high dispute from close-by too internation check nearness is the
tremendous insufficiencies. The situation for Vodafone is equivalent in other made and making
markets. High rivalry has wound up in a certified situation line/ARPU and on this end, no break is
average for the present.
Non-attendance from the beneficial UK showcase: Vodafone does not give remote telecom
benefits in the United Kingdom regardless of the way that it has a touch of undertaking business in
the nation. It sold the 45% stake in Verizon for $130 billion a year earlier. Neglecting the question
that Sprint and T-Mobile are weaker, higher obligations have ensured that every last basic telco in
different country are general solid financially. Subsequently, Vodafone can't perform reasonable in
the other country which cause them non-participation from the benefit in the United Kingdom

advertise.
M2 Critically evaluating strengths and weakness.
Vodafone is the biggest telecommunication company brand image and market growth itself
is the strength of the company. Besides, changing environment and competition strategies are the
weaknesses of the company which might be Create negative impact on the business behaviour.
According to the Spender, (2014) it was noticed that all qualities which Vodafone is having is more
than clients as that of their different adversaries as they could be focusing on UK and Ireland
showcase more. Organization ought to centre on how to defeat their shortcomings that could be
limiting them to their benefits and expanding income of firm. Jocovic, (2014) said that if Vodafone
is focusing on their broadband administration then this could be great approach to joining their
benefits. The shortcoming of organization would not enable them to develop and create in business
sectors.
TASK 3 analysing the telecommunication Sector
P3 Evaluation of United Kingdom telecommunication sectors using Porter's five force model.
The Mobile telecommunication sector is growing fast worldwide. In the UK the trend is also
the same. According to survey done by Deloitte, , the greater part (53%) of 16-75-year-olds in the
UK utilize their cell phones while strolling - the likeness around 22 million individuals. For more
youthful customers matured 16-24, the extent ascends to 74% (Deloitte, 2017). The various forces
which will help to bring an effective outcome in the telecom industry in UK. These force can be
describe such as follows:
Bargaining Power of buyers: The powder of buyers in the telecommunication industry is very
high because of cut throat competition and lack of identical goods and services are offer by the
organisation. The majorly power of the buyer is effectively reduces the cost prices in the
telecommunication sector even though not up-to the stages of its other firms or competitors. The
Vodafone will keep making reasonable earning as compared to their rival.
Bargaining power of suppliers: These can be another aspect in which the bargaining power of the
supplier of Vodafone is high since the firm operated their business with a high margin when
contrasted with its adversary. As a pioneer in the market their offer is gigantic which implies that it
can be effortlessly assimilate any value increase from the provider more than its rival can. All things
considered, Vodafone can be effortlessly keep up ease from its providers and keep making benefits.
Threats of new entrants: The telecommunication industry have low threat from new entrant
because it required to get high funds for setting up business in the industry and give competition to
already well established organisation in the industry. The major threat of new market is low due to
barrier in the entrant. The firms are demanding to entrant the market must pay high licensing charge
different by spectrum availability and regulatory issues attached to sectors. Same as the prices'
installation of setting up a network building is huge and the speed up modification technology
makes is challenging for fresh entry to contend (Jocovic, 2014). Therefore, Vodafone can be cope
with this by managing huge efficiency of its services to unmatched heights.
Threats of substitutes: The Vodafone faces a considerable threat for goods and services. The
landlines and CDMA services are rapidly decreasing and the broadband services are speed up
proper ordinary.
Rivalry within the market: This is very high in the UK telecom industry there already big player in
the market which are providing effective services. As the Vodafone face extremely high rivalry from
its competitor because of lower call rate prices charges by other organisations. Same as the other
rival continuously gives the new goods and services to the clients, which means that Vodafone has
to give the similar to its consumer. Major mobile network operators in the UK are; EE, Vodafone,
BT, Giff-gaff, O2, Virgin, Three and BT.

M3 Most appropriate strategies to improve edge and market position.
Company will adopt the best strategies to make productive work for the organisational goals.
With the help of productive work and proper implementation process it gives new advantages for
business growth. After then it was said that Vodafone if using Porter 5 Force model which is
helping company to improve their competitive edge and then their market position. Their main
focus would on their customer and then on other competitors like that of BT or Virgin into UK or
around the world. The factors would be effecting the competitiveness of all around market of
telecommunication sector of UK which is enabling company to cope up into market.
Task 4 – Understanding and interpreting strategic direction
P4 Evaluation the strategic direction and option available for Vodafone
The effective competition provided by the Vodafone which will help to bring a
substainbnility development and growth in the sector. The strategic direction and option available
for the company can be describe by the Bowman's Strategic Clock Model which is discussed such
as follows:
These model will explore the option for strategic positioning of the Vodafone in which the goods
must be positioned to provide it the most competitive position in the market. The main aim of
bowman strategic clock is to example that enterprises will have of option of how to positioning a
goods and services based on the two dimension that is prices and perceived value.
Illustration 1: Bowman's Strategic Clock Model
Source: Bowman's Strategy Clock Model. 2018

Low Price and Low Value Added (Position 1): It is not a high competitive positioning for
enterprises. The goods are not identical and the customer perceives few little value, despite a lower
cost of the Vodafone services which will help to give high competition in the sector. So the is
important to considered for the organisation to focus on the prices lower and add value in the
various goods as well services provided by them. This is a bargain basement strategic (Spender,
2014). The exclusive manner to remain competitive is to be as less prices as compared to other
competitor these will help to determine when the organisation is able to reduce its price.
Low Price (Position 2): In the telecom industry only that firm will be able to survive which will
provide the effective services in lesser prices. If the customer are not able to get better services from
their operator than they have option to shift towards the competitor. The strategy of cost
minimisation is required to be effectively taking advantage of the other competitor even though the
economics of scale have been considered to set up a price of various goods and services. The
margin of profit on all the products are less, but the high volume of output can be still generate huge
total profit as compared to the other organisation such as Versatile communication administrations
created £3.8bn in retail incomes in Q1 2017, a £65m diminish from the past quarter however a
£32m increment contrasted with a year beforehand.
Hybrid (Position 3): These will help to determine the lower the prices with the help of identical
goods. But the main aim of hybrid is to persuade consumer that there is better added value through
the combination of reasonable cost and acceptable goods which are not similar as compare to the
other competitor. The Vodafone is utilising very effective pricing strategies which will help to add
value in the services of customer,
Differentiation (Position 4): In this Vodafone has the objective is provided differentiation strategy
is to offer customer the high stages of perceives added value. The brand value of Vodafone will help
effective role to recognise the service as quality.
Focused Differentiation (Position 5): The aim of strategy to positioning at the high cost stages,
where consumer buy the goods due to the value of Vodafone services are effectively perceived
better by the customer.
Risky High Margins (Position 6): This strategy will help to Vodafone by setting up a huge cost
without offering anything to additional to the customer (Parast, 2015). If the consumer consistently
purchasing with the same price that will help to get better profits. But eventually consumer will
determine an effective positioned goods that offer much perceived value for the same of lower
price.
Monopoly Pricing (Position 7): This can be another strategy that can be adopted by the Vodafone in
which the monopolistic pricing strategies. There are no alternatives available with the Vodafone.
Hence, this will be not effective for the organisation to give better competition to their rivals.
Loss of Market Share (Position 8): This will create an adverse condition in the rivalry market.
Setting up common areas or benchmark cost for goods and services with a lower cost perceived
value is unlikely to win form various consumer who will have option within them such as EE, BT,
Giff-gaff, O2, Virgin, Three and BT.
M4 Producing strategic management plan that is tangible and tactical.
Strategic management plan is the essential process to make work in more productive
manner. Company requires adopting best plan for implementation to grab different company
opportunities and new development for the organisation goals. If Vodafone is applying all the stated
tools which are those like that of strategic handy than they would be gaining from market easily and
thus competitive advantages over the others into same sector. The Bowman strategy clock model
which Vodafone is applying into their company must be helping them throughout their strategic
management planning. Thus it is helping into providing more clear insight to competitors and their
customers as well.
D1 Critically interpreting information.
The above mentioned information would be including and telling what company should be
interpreting especially that of Vodafone and gaining advantages into market. All the set directions

and objective of firm should be helping and enabling company so that both external and internal
environment could be easily helping them.
CONCLUSION
From the report Business strategy the situation of Vodafone due to recession has been
decrement the overall consumer paying capacity hence, there is price war in between various firms
which were deal in the telecommunication industry provide the similar services to drive the price of
calls and SMS to increase more clients. The bargaining power of the supplier of Vodafone is high
since the firm operated their business with a high margin as compared to its rival. Hence, more
important aspect is the global presence makes new corner to the United Kingdom recognised
Vodafone brand instantly, huge particular stuff for unifies mobile services.

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Online:
Bowman's Strategy Clock Model. 2018. [Online]. Accessed through:
<http://www.studylecturenotes.com/management/bowmans-strategy-clock-model-its-eight-
competitive-directions-for-edge>.