Vodafone: External Environment, Strategy and Competitive Analysis

This report provides a comprehensive analysis of Vodafone's business strategy, encompassing a range of critical frameworks and models. It begins with a PESTLE analysis to assess the impact of political, economic, social, technological, legal, and environmental factors on Vodafone's operations. The report then applies the Ansoff Growth Matrix to evaluate Vodafone's growth strategies, including market penetration, market development, product development, and diversification. Furthermore, the report delves into Vodafone's strategic capabilities, exploring its strengths and weaknesses and employing the VRIO/VRIN model to determine its competitive advantages. The analysis extends to an examination of the competitive forces affecting Vodafone through Porter's Five Forces model and concludes with an application of Bowman's Strategy Clock to evaluate its strategic positioning. This report offers a thorough evaluation of Vodafone's strategic direction and competitive landscape.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.PESTLE ANALYSIS..........................................................................................................1
2.Ansoff Growth Matrix.........................................................................................................2
TASK 2............................................................................................................................................4
1. Strategic capability in Vodafone........................................................................................4
2. VRIO/VRIN model for determining the strategic capabilities...........................................4
3. Strengths and weakness of Vodafone.................................................................................5
TASK 3............................................................................................................................................6
Porter five forces model on Vodafone....................................................................................6
TASK 4............................................................................................................................................7
Bowman’s strategy clock model............................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is considered as a proper planning of including ways and techniques
that can help an organisation in achieving all the objectives at a faster rate. It is being designed in
a way that it can help the company to complete its vision, meeting all the expectations and can
compete with the other competitors in the market place (Klettner, Clarke and Boersma, 2014). In
mobile and Telecommunication sector, as there have been the involvement of various number of
companies, so it has increased the competition as well in the market place. Every single mobile
operator is trying to involve a variety of ways so that they can satisfy the customers to achieve
their objectives. The report is about analysing the impact of macro environment in Vodafone and
also, assessing all the internal and strategic capabilities of the same. The evaluation of the
competitiveness along with the analysis of the strategic direction of Vodafone have also been
included in the report.
TASK 1
1.PESTLE ANALYSIS
PESTLE analysis is done for the external factors that affect the working of the organisation
in particular aspects. Following are the sub factors of this analysis that affects Vodafone which is
discussed below
Political factor
This is regarded as one of the influential factor that affects the company in many ways.
The stability of Vodafone is dependent on the political scenario of particular area. A stable
political area leads the company to perform its functions properly at the ground level and as the
peaceful area allows the company to expand the network in an area effectively. An area with the
disturbed political scenario will not lead the company to grow or even function properly that will
have some serious consequences in the market.
Economical Factor
Economical factor plays an important role for every firm as it determines the financial
Working of the company and helps to flourish its business in the market economy. An economy
with recession will not allow any company to perform well in the market, it will always lead to
decline of the market share of Vodafone. An economy with a high gross domestic product rate
will lead the companies to earn good revenue and increase its market share. The company will
grow very fast and expansion of the firm will be easily proceeded as the availability of investors
1

will get increased and the company will be able to generate good revenue. All such factors such
as inflation rate, recession, GDP rate and etc affect the financial stability of a company.
Social Factor
Social factor is always related to the society which includes the local people their culture,
attitude, belief and living standards and other demographic features. All the plans which
Vodafone will introduce should be according to the preferences of the customers of the particular
region as the choices and preferences of customers belonging to different regions varies. Also
expanding a new branch or subsidiary and formation of laws and policies depend upon the types
of employees and their belonging.
Technological Factor
With the technological advancement in the present scenario every day new inventions
takes place that completely transforms the scenario. One has to be updated with the technologies
and try to introduce product and services which has latest technologies. Due to present of strong
competition in telecommunication market every rival is coming with innovative technologically
advanced product in order to lead in the market. Therefore Vodafone should come up with some
technologically advanced ideas that could satisfy the needs of the customers.
Legal Factor
Legal factor plays an important role in smooth functioning of Vodafone. As the area with
strict legal laws will require more documentation processes that would take time due to Which
Company can bear lots of loss. An area where legal laws are lenient it helps the business to
flourish and works smoothly in that area.
Environmental Factors
There are various environmental factors that affects the organisation such as geographical
features, climatic conditions and various environmental aspects that can relate with the
functioning of telecommunication market.
2.Ansoff Growth Matrix
Ansoff Growth matrix determines various strategies that a company can implement to grow
in a market or to sustain along competing with the competitors. This matrix has four aspects
which are market penetration, market development, product development and diversification.
In the market penetration strategy Vodafone can have two aspects whether to focus on the
2

modification of existing products and services or to introduce new offerings in the new market.
As due to the presence of strong and established rivals in the telecommunication market
Vodafone should work on introducing new products in the same market so that it can compete
and can establish them as well. This will lead to effective market penetration strategy.
In market development strategy Vodafone has to go with entering into completely new
market with the new product and services that could transform the market ad can give a good
competition to rivals and earn great revenue in return. Vodafone can introduce certain plans with
respect to the preferences of people on the demographical basis or other one which can be chosen
for strategy making. Vodafone can come up with broadband, routers which can facilitate their
accomplishment of goal much easier. It will lead to attract new group of the customer which
would lead them the leader of the market with a high cost.
In the product development strategy Vodafone will modify the current product and services by
adding some new features in them that could attract and increase the customer base for them in
the market. Vodafone can introduce some new offers in the existing plans like seasonal offers or
introductory offers for those customers which are accessing their network fir the very first time,
that would lead to introduce some new plans in order to competed with the plans of competitors
which are already attracting a large segment of customers. This strategy is implemented when
the existing product or services started losing the consumers and starts switching to the
competitors as they are the best substitute available to its plan which is satisfying their needs and
requirements by providing similar product and services at the same prices which affects the
customer choice and the loyalty of the customers for this reason is hard to gain in this sector.
Availability of substitutes puts pressure to the company to modify the existing services and
provide something new which can satisfy customers and attract more to choose their networks.
Last strategy which can be applied by Vodafone is the introduction of diversified
products in the completely new market targeting different customers. It is a risky strategy and is
applied when they have successful existing product and services, and want to expand the
business in other way by introducing completely different offerings which may or my not liked
by customers and the success is totally unpredictable. Vodafone can introduce their mobile
phoned along with their networks which can lead to enter in electronics market and compete with
rivals like Samsung, Vivo and etc. This is very experimental strategy which is least preferred by
every company at growing phase.
3

TASK 2
1. Strategic capability in Vodafone
Strategic capability means the ability of Vodafone to make a successful involvement of
the methods and competitive strategies in a way that it can help in a better processing of the
services and operations of the company. Also, it is not only about involving the strategies etc.,
but it also focuses on the fact of making further increments and improvements over time. It keeps
its focus on all the resources of the company that can help Vodafone in maintaining a sort of
balance between different operations in a way that the business of Vodafone can survive for a
long time in the market place. If Vodafone make sure to involve a proper and efficient business
strategy in their processing, then it can help them to stay competitive enough in the market. An
appropriate business strategy can also help Vodafone in competing with the other rivals and
competitors in the market place, thus also help them to be financially strong as well (Pucciarelli
and Kaplan, 2016). Therefore, a proper involvement of the strategic capabilities in Vodafone
can help them to stay competitive enough in the market place, thus they can be able enough to
achieve all the objectives and outcomes at a much faster rate.
2. VRIO/VRIN model for determining the strategic capabilities
The VRIO/ VRIN framework helps in making an analysis of the strategic capabilities in a
much appropriate and efficient way. The same is being discussed as under :
Valuable
If Vodafone will ensure that they involve products that are actually valuable which
means they are worthy of the cost being provided by the customer, in that case, it can help
Vodafone to achieve a better competitive advantage.
Rare
Involving products or services that are actually different from the ones that are produced
by the other mobile operators can actually help Vodafone to gain the interest of the customers,
thus it can actually prove much helpful for Vodafone to gain a higher productivity rate as well.
4

So, Vodafone can ensure to make involvement of the products that are quite rare from the other
ones.
Imitate
The products developed and implemented by the Vodafone should have been enough
costly to be imitated. It means that it should be developed in a way that the other competitors
who does not have it can find it much harder to copy or duplicate them (Ryan, 2016). For this,
Vodafone can ensure that the internal processing of the products have been done in a way that
the one trying to copy or duplicate it may find it hard to do so.
Organised to get value
Vodafone should ensure the fact that if the resources are not worthy of receiving the
value, it may throw some impact on the organisation. Therefore, the management of Vodafone
can make sure that all the operations and processing is going in an appropriate way that the aims
of the company can be achieved. If some factors such as involving rare products that are also not
be able to get imitated etc., can help Vodafone in achieving the competitive advantage. Also, if
the products they involve are valuable which means that they are worthy enough of the amount
being paid by the customers for that, then it can also help in maintaining the ability of the
company and its dealing with the processes.
3. Strengths and weakness of Vodafone
The strengths and weakness of Vodafone are discussed as following :
Strengths
 Vodafone ensures the involvement of a balanced structure which involves all the basic
processing of the operations and ways to implement the same. Also, it is one of the
largest mobile network communication firms, satisfying enormous number of customers
from a long time. Vodafone holds a strong recognition of their brand. Whether it is about their strategies or
services they provide to the customers etc., but they have successfully gained the interest
of a huge amount of people, which have further helped the firm to achieve a higher rate
of popularity as well as of productivity.
Weaknesses
 As the need for the telecommunication is increasing day by day, Vodafone also have to
face a sort of cut throat competition in the market place. One of the biggest competitors
5

of Vodafone is EE which is also expanding very wide in the market. So, for Vodafone, it
can act as a threat. Therefore, proper measures can be involved by Vodafone to compete
with them and achieve their targets as well at a faster rate.
 Also, despite of all the operations and processes in an appropriate manner, still Vodafone
lacks in a better service delivery. It is because there are some customers that are facing
issues with the network, but the service delivery of Vodafone is slow enough and that can
actually disappoint the customers. So, for avoiding this, Vodafone should ensure to
provide an appropriate service delivery to the customers before and after the purchase as
well.
TASK 3
Porter five forces model on Vodafone
In respect to consider Porter five force model, competition determines successful and
relative strength with the forces. Therefore, proposed porter assists to identify impact on the
business in competitive environment (Viveros, Sarmiento and Vera, 2017). Following elements
determines intensive results on Vodafone company: Buyers bargaining power (High): In the UK, buyers powers of bargaining in
telecommunication industry consider high. This is because, there is cut throat competition
exit and unique products are not available (Gould and Desjardins, 2015). Strong buyer
power effectively reduce so that company able to keep their reasonable profits which
compared from their competitors easily. Suppliers bargaining power (High): Furthermore, suppliers of Vodafone company has
high bargaining power from when they are operating. It considers greater margin which
could be compare it with competitors. It is the leader of market so that share consider
large aspect which could be easily absorb any price increment from the competitors.
Hence, the chosen company able to maintain their low price from their suppliers and
make profits as well (Johnson, 2014). Threats of substitute (Moderate): In addition to this, Vodafone also face considerable
threat for their products and services. Landing services in CDMA decline continuously
and broadband operations develop regularly (Lokuge, Sedera and Grover, 2016). Hence,
video conferencing, VOPI, Google Talk, Skype, etc. emerged as the substitute for mobile
6

service. Due to strong buyer power and effective economy of scale, the company does not
require cost attribute to submission to customers. Threat of entrants (Low): In the UK telecom industry consider low threat of entrants
because telecom industry require more fund to implement functions and operations.
Companies consider their outcomes to enter in the market and pay huge licence fees
which spectrum availability in the market. In addition to this, cost of setting up new
business require more money so that it create changes in technology that is difficult to
new entrants (Viveros, Sarmiento and Vera, 2017). Therefore, Vodafone can cope up
their operations with maintaining high level of efficiently with its services.
 Industry rivalry (High): Further, Vodafone face high rivalry because of major
competitors' existence in the market. They provide products and services at low cost as
compare to Vodafone so that it reduce effectiveness in the country. Similarly, competitors
constantly provide innovative products and services to their customers which mean is to
provide systematically work performance in the business (Lokuge, Sedera and Grover,
2016).
From the above analysis, it can be stated that Vodafone continuously develop their
functions and operations to compete with different competitors in the UK. It will assist to
increase effective performance and ability to make diversity in products and services. They lead
to cope up with industry to make successful results at workplace (Gould and Desjardins, 2015).
In term of financial position, they increase several opportunities and eliminate threats to improve
effective results at workplace. Moreover, the selected business need to includes more added
value services with introduce location based services and diversify broadband network in rural
markets.
TASK 4
Bowman’s strategy clock model
This model is used for making various marketing strategies for analysing its competitive
position with respect to competitors which are present in the market. Following are the eight
strategic positions :
1.Low price/Low value
7

In this the company sells those products which does not have high value on low cost. It
can be applied when it wants to sell bulk of products as well as attracting new customers. This is
known as the basement of bargaining where no company wants to exist. By implementing such
strategies companies are not able to win the loyalty but can make itself to survive in the market
economy.
2.Low Price
This is opted when company is potentially is at lower position in the market. Under this
the profit margin for the product is very low but they have to op it so that large volumes of sale
can be done for the product. Walmart is the major example for this strategy as they convince
suppliers for entering into the low price arena with assuring extremely high volumes.
3.Hybrid
In this the company opt for moderate pricing and differentiation where they sell the
product at a moderate rate which have a higher value for the customers as compared to its rivals
who have low cost. Company tries to built an image in the eye of the buyers of having fair
prices.
4.Differentiation
In this company introduces such products which have unique features which are
completely valued by customers. These unique features in their product provide them a
competitive edge. Branding is the main strategy which is adopted for these products to attracts
lots of buyers. In the case of Vodafone, they have implied strategies such as introducing various
effective plans according to the various segments of customers such as affordable plans for the
students and along with that sharing plans that could be used by the family members such as
sharing of data by sending the required amount of internet servings according to the need. They
differentiation themselves on the basis of fastest network and provides the best quality of
network around the world
5.Focused Differentiation
In this the companies provides product which has high rate and perceived value. they
target such buyers who does not care for the price and are ready to pay any amount as they
consider the value of these offerings which is very high. It is not necessary that it has real value.
This strategy is adopted for highly targeted market segment and to gain high margins.
8

Various new technologies has been implemented in order to grasp an effective strategies
which are able to provide fastest and strongest network at every corner of the world. Various
budgets has been made for expansion of network towers that have devices which are efficient for
establishing a strong and connective system. Focusing more in the advancement of 4G
technology at the cost which is much affordable as compared to the plans which are provided by
other telecommunication companies.
6.Increased price and Standard Product
This is very risky strategy for the company as in this the company simply raise the prices
of its respective products without concerning for the increase in value of the product. If this
strategy is accepted by the customers then it gets a huge profit otherwise a huge loss is beard by
the company.
7.High Price/Low value
This strategy is adopted by a monopolist company who knows that it is the only supplier
of the product in the market. In this the company sells their product at a very huge price and
buyers had to buy these at the given price because no their seller is present in the market. They
do not last for very long time in the market economy.
8.Low value/Standard Price
This strategy is not opted by companies as it lead to lose the market shares. It only
possesses those product or services which has low value and are not preferred by the buyers.
CONCLUSION
It has been concluded that Vodafone follows various strategies in order to establish
themselves in the market and provide a strong competition to others who are regarded as strong
rivals. Also, for analysing the internal as well as external factors they performs various analysis
such as PESTEL and Swot to determine all the aspects which can affect or influence the
strategies of this company. Porter's Five forces has been determined which has lead to figure out
what are the strong and weak threats that can affect the company in several ways. For
determining the strategic capabilities the VRIO model has been investigated to serve a clear view
of every strategies and its related outcomes.
9

REFERENCES
Books and Journals
Gould, A.M. and Desjardins, G., 2015. A spring-clean of Michael Porter’s Attic: The Canadian
telecommunications sector as an exemplar of refurbished generic strategy.
Competitiveness Review, 25(3), pp.310-323.
Viveros, L.J.H., Sarmiento, D.A.L. and Vera, N.E., 2017. Structuring and Implementing a
Customer Service Center for Telecommunications SMEs in Colombia.
Lokuge, S., Sedera, D. and Grover, V., 2016, June. Thinking inside the Box: Five Organizational
Strategies Enabled through Information Systems. In Pacific Asia Conference on
Information Systems (PACIS 2016).
Johnson, M.L.L.S.F., 2014. The five competitive forces framework in a technology mediated
environment: do these forces still hold in the industry of the 21st century? (Bachelor's
thesis, University of Twente).
Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics. 122(1). pp.145-165.
Pucciarelli, F. and Kaplan, A., 2016. Competition and strategy in higher education: Managing
complexity and uncertainty. Business Horizons. 59(3). pp.311-320.
Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital
generation. Kogan Page Publishers.
10