Vodafone PLC Case Study: PESTEL Analysis of Business Environment

This case study examines Vodafone PLC, a multinational British telecommunications company, analyzing its history, organizational structure, and governance. The report delves into the importance of PESTEL analysis for business organizations, providing a detailed framework and analysis of the external environment impacting Vodafone. Task 1 provides an overview of Vodafone PLC, including its founding, global presence, and market position. Task 2 highlights the significance of PESTEL analysis, emphasizing its role in understanding external factors. Task 3 applies the PESTEL framework to Vodafone, assessing the political, economic, social, technological, environmental, and legal factors influencing the company's operations. The analysis considers the impact of political stability, economic performance, social trends, technological advancements, and legal regulations. The conclusion summarizes the key findings, underscoring the value of PESTEL analysis for strategic planning and decision-making in a dynamic business environment. The document, contributed by a student, is available on Desklib, offering valuable insights into business analysis.

Case Study

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Overview of Vodafone PLC........................................................................................................3
History and organizational structure of Vodafone PLC..............................................................3
Ways in which company is governed..........................................................................................4
Task 2...............................................................................................................................................6
Importance of PESTEL analysis of business organization..........................................................6
Task 3...............................................................................................................................................7
PESTLE analysis.........................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Effective Business environment is most important term in organization. Business
environment includes many forces and factors that affect business ability to maintain and build
successful customer relationship. It involves all internal and external factors that affect the
company’s functions involving customer, employees, management, business regulations and
demand and supply. Business environment has various types such as cultural and social
environment, technological environment, legal and political environment etc. All the factors
collectively affect the business performances and functions. Vodafone is a multinational British
telecommunications company. Its headquarters in London, England. Vodafone’s registered office
at England, Newbury, Berkshire. This report will include the structure of the company and its all
management activities. This report will also highlight the importance of PESTEL analysis for the
business organization. This report will also state about the framework of PESTEL with analysis
of external environment of Vodafone PLC.
TASK 1
Overview of Vodafone PLC
Vodafone is a multinational British telecommunication company that was founded in
1991, whole headquarter is in London, England, UK. They provide their services in Africa, Asia,
Europe and Oceania. According to a recent survey, Vodafone was ranked as number one
organization in terms of number of mobile customers (Wei, 2019). Vodafone PLC has partner
networks in approximately 47 countries. They have employed approximately 99,000 employees
working for them. It is a public limited company that has been listed on the London Stock
exchange.
History and organizational structure of Vodafone PLC
Evolution of Vodafone was done in 1982 when Racal Strategic Radio Ltd was
established, which is UK's largest military radio technology maker. Today they are known as as
Vodafone. In 1991 Racal Strategic Radio Ltd was renamed as Vodafone group whose CEO was
Gerry Whent. The name Vodafone comes from voice data fone. This name was chosen by the
company so that they can reflect provision of data and voice service over mobile phones. In 1996
Vodafone PLC owned two- third shares of Talkland and in 1997 they owned people’s phone.
First merger of Vodafone occurred in 1999 when they purchased Airtouch Plc. After that
Vodafone agreed to merge their US wireless assists with one of Bell Atlantic Corp in order to
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form version wireless. Then in 2000 they made one of the largest mergers with Mannesmann.
This merger was approved by EU when Vodafone agreed to divest the 'Orange' brand, which was
acquired in May 2000 by France Telecom (Rodrigues, 2019). Due to mergers and acquisitions
Vodafone brought changes within their organizational structure in order to process the changes
positively.
In 2005 they announced new organizational structure so that they can focus upon their
customers in local market, enhance their ability to deliver fast service and for simplifying
decision making. They have high level of centralization within their current structure in which
board of Vodafone are the ultimate decision makers. All the companies that have been acquitted
by Vodafone do not enjoy any legal power. Mergers and acquisition done by Vodafone till now
has helped them to grow their business exponentially and has helped them to operate and manage
their business at international level.
Ways in which company is governed
Vodafone PLC is governed by their Board of directors. They have a hierarchical structure.
Their Board comprises of Chairman, Senior Independent Director, nine Non- Executive
Directors, the Chief Executive and the Chief Financial Officer (Vodafone Corporate governance.
2020). All the nine non- executive Directors helps in bringing wide and varied commercial
experience to the Board and Committees. All the committee members of Vodafone PLC are
responsible for maintaining effective governance in relation to Board composition and
succession planning, Audit and risk, Corporate governance and Remuneration.
This board is chaired by Vittorio Colao, the Executive Committee who majorly focuses
upon managing Vodafone’s business affairs which includes delivery of a competitive strategy,
developing our financial structure and planning, driving financial performance and ensuring
good succession planning and talent pipeline. Vittorio Colao is a chief executive director whose
tenure is of 11 years. He has also been appointed as – European Round Table of Industrialists as
vice chairmen and non-executive director and chair of the compensation committee at Unilever
PLC. He has been appointed as chief executive director because he has an experience of 20 years
working in telecommunication industry (Vodafone Corporate governance. 2020). Gerard
Kleisterlee is the current Chairman, Independent on appointment whose tenure 7 years. He has
helped Vodafone in bringing understanding of the consumer electronics, technology and lifestyle
industries that he has gained from his career with Philips Electronics spanning over 30 years. He
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is still continuing to use his knowledge to analyse development of Vodafone’s strategy and
effectiveness of the organizational operation’s total communications company.
Task 2
Importance of PESTEL analysis of business organization
PESTEL analysis stands for political, economic, social, technological, environmental and
legal factor and this factor are important for better understanding of business, cost effective and
to exploit opportunities. PESTEL analysis is a main tool used by the all marketers to monitor the
various macro-environmental factors. This analysis is helpful for business because it provides a
huge understanding of product development, product launching and many market strategies to
increase success of organization. PESTEL analysis is concerned with the outside environmental
factors that influence the organization’s operations and activities (Menet., 2016). Many Political
factors create main impact on the business and it includes government policy, environmental law
and instability in oversea market. It plays an important role in any organization. PESTEL
analysis helps the VODAFONE PLC organization by providing the huge information regarding
the external factors that can directly or indirectly influence the business such as social factors,
environmental factors, technological factors etc. The important of PESTEL analysis include it
creates deeper understanding of factors for the organization, threats analysis and cost effective.
So that it is essential for achieving higher growth in business. Economic factors impact on the
economic performance and it’s directly impact on profitability and productivity of an
organization. Social factor is may impact on organization and it help the company to understand
their customer wants, needs and change in lifestyle etc. By the PESTEL analysis, organisation
can identify the current customer trends, interest, desires so that they can produce their products
accordingly.
PESTEL analysis includes the technological factors that consider the new innovation and
development it affects on market industry. Its include many change in technology such as ursine
digital or mobile technology, research and development of new idea through technological factor
and this are important for today business lifestyle. PESTEL analysis helps the organisation to
recognize their actual position in the technical area and improves them accordingly (Stoyanova
and Harizanova., 2017). Environmental factor is relates to the impact of ecological aspects and it
is essential of CSR and this elements are more important for VODAFONE PLC organization.
This include many factors that are affect on organization such as climate change and
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sustainability are important for business. PESTEL analysis includes the legal factor and it
provides a understanding of the legal and allowed within the territories the operate in business
organization (Faris and Rahardjo., 2020). This factor is to carry out by all business organization
and it is helpful for achieving business goals or ob ejectives.
PESTEL analysis is essential for all organization and it generates a better understanding
of all market factors that have impact on business. It assists to identify the external factor and
their impacts by market analysis. It influences the marketing and relationship with organization
to better understanding of all external environments. It is analysis of all factors and helps in how
organization does business and achieving higher profit in market. PESTEL analysis is essential
strategic planning method and helps to decrease organization threats so that this analysis is very
helpful for VODAFONE PLC organization. It is carried out by all business organization to
improve performances of business. It is important for evaluate the changes occurring in the
market and understanding business needs to achieve sustainability in market (Shatskaya,
Samarina and Nekhorosheva., 2016). PESTEL analysis is important and it is carrying out by all
organization to achieve higher sustainability in organization. This analysis realised that how all
the factors affect on business. PESTEL analysis is very essential for business organization to
improve operational activities in business.
Task 3
PESTLE analysis in Vodafone group PLC is the strategic tools to make the proper analysis of the
macro environments of the organization in perfect manner. The level of changes in the macro
environment have the direct impact of the Vodafone PLC as well as on another player of the
wireless communicative. The proper level of implementation of the PESTLE analysis have the
impact in the shaping strategy and competitive level of landscape which relates in the overall
profitability of the technology industry.
There is more level of operational challenges prevalent in macro environment along with
competitive forces. This have resulted in the average profitability operation long profits.
PESTLE analysis
Political factor
This plays as significant factors which is role as determining factor which can impacts
long term profitability in the certain country. This is the operating in wireless communications
have the dozen exposing the different political environment and political systematic risk. The
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political forces have grown the level of relevance in the context of international business with the
twenty first century. There is the government intervention on the world at the global level
leading the higher pressure in the international brands. Overall political environment has the
effecting the economic and trade with government attitude towards their business the tax regimes
which is affection he business. The main markets of the Vodafone are Europe, Asia pacific as
well as Africa and middle east. The level of existing political stability has the region effects
sales and profitability. The demand of technological services around the world in the decade
have level of government controls and oversight with growing pressure due to increased
government control.
Economic factor
Performance of the global and regional economies in the context international business for the
performance the informational technology business. The economies have been impacted form
the Brexit as the cost base is taking advantage of new digital technologies. There is there
leverage of the balance sheet to have the aim to move in the targeted the range of the 2.5x-3.0x
of upcoming years. The company accelerate the timeline for implementation of ‘Digital
Vodafone’ programme from five years to three years. There is the reduces of net expenses in
Europe by 1.2 billion euros by the end of FY21 and implying an annual savings of 400 million
euros.
Social factor
Social factors have impact in term of sales and profitability the business in specific regions. The
change in lifestyle as well as the preference in the specific regions have the impact the financial
health of the business. They have the entertainments and work purposes as the growth in demand
to be beneficials for the telecom international companies such as Vodafone’s. There is the
different in the backgrounds to have creation the barrier to the effective flow of information.
There are the European companies for understanding the lifestyles, belief and educations for the
buying preference of the customer across all the world. This will lead to have the expansion the
company in the right direction by targeting the right people.
Technological factor
The firm is establishing the high level of targets by making the renewing focus on the level of
operational excellences for making the consistent commercial performances across the entire
group. This is helpful in the building the customer loyalty and engagement of the firm for
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connecting distribution over the 22 million active users for establishing and maintaining the
customer relationship. The company have the leverage over the competitors in terms of assets
and infrastructure in way of focussed asset and the sustained the network leaderships and leading
are giga bit networks. The company is looking for the opportunity in order to generating the
significant values and the creating the return.
Environmental factor
The firm have the level of understandability over establishing the responsibility for connecting
over the 650 million of people with various organization at the global levels. This have been
declared as improvement over the one billion tonnes for reducing the environment impacts which
is 50% by the year 2025. The firm have identified the digital technology as the platform of
opportunity which have the need to be equally distributed. In order to have the reduction in the
carbon footprints, the Vodafone have decided over the switching for the renewable sources of
energy for efficient supply. The firm also have made the attempt in reduction of the wastage
network in order to make the accretion of growth and increase the demand among customers
Legal factor
The firm post merger with ideas company have been under the light of security relate to the
issues of raising the demand of dues as the form have charges with hefty tax regarding almost
$2.5 billion by the Income Tax Department over the mentioned purchase. There is the deal to be
removed have judgement of favour couldn’t levy tax by overseeing removals of the taxes
between the companies which are tends to be formed. The government agency including the EU
have the increasing in level of fines which make the Vodafone to have the focus on strategy in
order to make the respective level of avoidances .
CONCLUSION
From the above file it can be conclude as Vodafone is a multinational British telecommunication
company operates in more thana 25 countries and had partner networks in approximately 47
countries. Due to mergers and acquisitions Vodafone brought changes within their organizational
structure in order to process the changes positively. All the committee members of Vodafone
PLC are responsible for maintaining effective governance in relation to Board composition and
succession planning, Audit and risk, Corporate governance and Remuneration. The important of
PESTEL analysis include many factor deeper understanding of organization, threats analysis and
cost effective so this is essential factor for achieving higher growth in business. It is carried out
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by all business organization and to improve in performance of business. It is important for
analysis the changes occurring in the market and understanding business needs to achieve
sustainability in market. The level of changes in the macro environment have the direct impact of
the Vodafone PLC as well as on another player of the wireless communicative. The level of
existing political stability has the region effects sales and profitability.
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REFERENCES
Books and Journals
Menet., 2016. The importance of strategic management in international business: Expansion of
the PESTEL method. International Business and Global Economy, 35(2). pp.261-270.
Stoyanova and Harizanova., 2017. Analysis of the External Environment of Green Jobs in
Bulgaria. Economic alternatives, (1), pp.122-136.
Faris and Rahardjo., 2020. Analysis of Business Opportunities and Threats in The Household
Cleaners Sub-Sector of The Chemicals Industry in Indonesia. European Journal of
Business and Management Research, 5(1).
Shatskaya, Samarina and Nekhorosheva., 2016. PESTEL analysis as a tool of strategic analysis
in international markets. SCOPE ACADEMIC HOUSE B&M PUBLISHING. p.47.
Wei, L., 2019. Financial Analysis of Vodafone Group Plc.
Rodrigues, M., 2019. Vodafone group Plc-telecommunications (Doctoral dissertation).
Kleiousis, E., and et. al., 2019. Corporate Governance: A Comparative Analysis of the Accounts
of the Telephone Companies Cosmote, Vodafone, and Wind. In Economic and
Financial Challenges for Eastern Europe (pp. 509-523). Springer, Cham
Online
Vodafone Corporate governance. 2020. [Online]. Available through:
<https://www.vodafone.com/investors/investor-information/annual-report/downloads/
Vodafone-governance-2019.pdf>
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