Vodafone Business Strategy: Macro, Internal, and Competitive Analysis

This report provides a detailed analysis of Vodafone's business strategy. It begins with an examination of the macro-environmental factors impacting Vodafone in the UK, utilizing PESTLE analysis to assess political, economic, social, technological, environmental, and legal influences. The report then delves into Vodafone's internal environment, evaluating its capabilities, resources, and competitive advantages, including brand value, customer base, and employee contributions. It employs the VRIN model to assess strategic capabilities. Furthermore, the report utilizes Porter's Five Forces analysis to assess the competitive landscape, including the threat of new entrants, bargaining power of suppliers and buyers, threat of substitutes, and rivalry among competitors. Ansoff's growth vector matrix model is used to explore growth strategies. Finally, the report incorporates SWOT analysis to identify Vodafone's strengths, weaknesses, opportunities, and threats, and the Bowman strategic clock model to explore options for strategic positioning.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Impact and Influence of Macro environmental factors on Vodafone, UK.............................1
TASK 2............................................................................................................................................4
Internal environment and capabilities of Vodafone...............................................................4
TASK 3............................................................................................................................................6
Porter's five force analysis......................................................................................................6
TASK 4............................................................................................................................................8
P4 Bowman strategic clock model.........................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Vodafone in one the best telecommunication service provider business operating from
UK. It has business in India, Europe and many other regions effectively. Vodafone has made its
place in the global market. The headquarter is located in Newbury, England. Business strategy is
very important for business in order to enhance profitability and production which also help to
gain competitive advantage effectively. It is analysed that Vodafone Group Plc has total
£139,576 million of assets in year 2012. It has 14,000 stores and 238,000 base stations
worldwide effectively. The report will cover impact and influence of Macro environmental
factors on Vodafone, UK. In addition to this, Internal environment and capabilities of Vodafone
and Porter's five force analysis to determine competition, threat of new entrance, bargaining
power of suppliers and buyers, threat of substitute products and finally the rivalry among
competitors in the business effectively. Finally, the report will demonstrate bowmen strategic
clock model to explore options for strategic positioning and also how should products and
services offered by business.
TASK 1
Impact and Influence of Macro environmental factors on Vodafone, UK
Vodafone, UK: It can be said that Vodafone in one the best telecommunication service provider
business operating from UK. It has business in India, Europe and many other regions effectively.
Vodafone has made its place in the global market. The headquarter is located in Newbury,
England. The market value is also very effective and around on hundred billion pounds which is
a very large number. Vodafone has business in more than thirty countries and expanding more
with the developing growth. The business and operational activities are affected by some factors
which are described below:
PESTLE ANLYSIS OF VODAFONE BUSINESS
Political: Political factors are the main influencers on business operational activities. It can be
said that the firm is dependent on political factors in which country it is operating. In order to
establish the infrastructure of business, Vodafone requires permission from government and
regulative body effectively. This will affect the operational activities in terms of time and money.
Political factors such as inflation and tax rates for a particular nation also affect business
profitability and production.
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Economical: There are some economical factors such as rise in inflation rates, economy affect
on business process, price and products, changes in supply and demand, interest rates, foreign
exchange rates and economic growth pattern affect Vodafone operational activities. Such
changes create issues for business in terms of making regular changes in operations and prices
accordingly and effectively.
Social: Social factors are crucial for the firm in order to manage and control that it helps to
enhance production and profitability. Social factors such as population analysis, demographics,
cultural trends and buying trends of people are different in every nation. It can be said that
people have their own choices and preferences which affect demand and supply procedure of
business. The firm should manage social factors such as in countries like UK where the demand
is high during the holiday sessions.
Technological: Technological factors also affect business that innovation in technology is
improving day by day. Technological factors such as research and development, automation,
latest machineries and equipments and amount of technological awareness that Vodafone market
possesses affect business and operational activities. The firm should try to adopt latest innovation
in the market which will help to provide better services to customers and lead towards business
success.
Environmental: Environmental factors are determined and evaluated by surrounding
environment which influence business operational activities. Environmental factors such as
environment analysis, global changes, climate weather, geographical location and environmental
offsets affect business and its internal environment as well. Vodafone should analyse all the
environmental factors for the particular country in order to manage changes which helps to
increase profitability and production.
Legal: It can be said that legal factors have both internal and external sides. The government
make changes in policies, rules, regulations and legislations in order to manage and control
various businesses accordingly. This will affect the operational activities of Vodafone that it is
operating in various nation with different legislation and law. For an example, health and safety
law, consumer law and labour law. These should be managed by firm in order to run business
smoothly and effectively.
Ansoff's growth vector matrix model
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The Ansoff Matrix is a strategic planning tool that helps to provide a strategic framework
to help executive, senior manager, and marketer devise strategies for future growths and
developments. It is named after Russian American Igor Ansoff, who created the concept
effectively. The model is also known as Ansoff product market growth matrix. It will help to
focus on key areas of business in order to improve and develop business growth. This will also
help management and team members to achieve business growth.
Market development: Market development can be done by creating new market for the existing
products and services. The existing products and services will act here as a new product for the
customers. There are different strategies available for business such as excluded market
segments, pricing policies, new marketing and distributing channels, entering new geographical
markets effectively. This will help to provide strength towards business operations and will
increase production as well as profitability.
Product development: Product and service development is also a strategy used by businesses in
order to enhance profits effectively. It can be said that Vodafone business should use product
development strategy. This will be done by focusing on customer needs and requirements which
helps to understand needs and wants better. This will also help to create new opportunities by
replacing existing products and services with something innovative and better.
Market Penetration: Market penetration is an effective strategy used by many businesses so as
Vodafone in order to develop and improve market. Market penetration can be done by focusing
on existing products and services sells which can be done by providing discounts and other
offers and policies effectively. Increasing exposures to one product-market segments can make
the business more vulnerable to future changes in competition. This will also help to gain
competitive advantage for firm which helps to increase market share, profitability and
production.
Diversification: The option for diversification is now one of the most controversial since its
includes new products and customers. There are three levels of diversification such as into
related markets, unrelated markets using existing products, resources and capabilities and market
which requires new capabilities and resources in order to compete others. This is also one of the
most risky process that it requires new resources, capabilities and strategies to manage them
effectively and efficiently.
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TASK 2
Internal environment and capabilities of Vodafone
It is analysed that Vodafone Group Plc has total £139,576 million of assets in year 2012.
It has 14,000 stores and 238,000 base stations worldwide effectively. The internal analysis will
help to determine strategies, plans, resources, competitors and stakeholders which helps to
increase production and profitability.
Intangible resources: Vodafone is ranked as the number nine in telecommunication business
sector at global level that the total worth of brand is US$30 billion. The brand is developing and
improving its network through effective use of resources and innovations in technological
development. Customers of firm receives quality and innovative services which provides greater
value for them and increase capacity and productivity. This will also help to enhance profitability
and production.
Value chain analysis: It can be said that the firm invested total 304 million in 2012 for research
and development activities in order to ensure innovative services to develop continuously and
effectively. There are 99% people in Europe make calls from the Vodafone network. The
business is still investing about £6 billion in network and infrastructure provide safe and stable
connection to customers in the market which increase customer satisfaction and loyalty. There
are more than 14,000 own branches and stores to provide quality and effective services to
customers. The own portal will also help to learn about products at global level for all the
employees working in business. Centrica formed a strategic alliance with Vodafone in order to
provide telecommunication services to customers because of the advantage of bigger network
across British.
Competitor analysis: There are so many competitors available in the market providing similar
services as Vodafone effectively. BSNAL, Aitel, Idea, Aircel, Virgin and many other companies
are awaiting to cross Vodafone business in terms of market share, production and profitability.
They also providing telecom services, mobile services and broadband which affect business
operations and productivity. For an example, Vodafone business provides two services such as
bundle and three service bundle packages and Virgin media provides four services of bundle
package.
Customers: There are a lot of customers using Vodafone services and products which has a great
impact on business profitability and production effectively. India is one of the best countries
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producing high rate of revenues for firm which helps to manage and control market share as well
as profits. It can be said that customers are the key role players in every organisation which helps
to enhance productivity which lead towards business success.
Employees: There are number of employees working in more than 14,000 stores which is a very
effective number. Employees are the main elements of business success that they should treat
customers effectively in terms of providing quality and satisfactory services which helps to
increase customer satisfaction and loyalty.
Development: Development is crucial for firm in order to manage market share and competitive
advantage. Technological development, research and infrastructure is one of the key factors that
helps to sustain business in a profitable way which helps towards business expansion effectively.
This will also help to create innovation at work place and increase production.
VRIN model to determine strategic capabilities:
Value: Resources which helps to bring value in Vodafone are source of gaining competitive
advantage that they are easy to obtain. Business also acquire resources effectively.
Rareness: Resources that are available to all competitors rarely provide any significant
competitive advantages. This will help business to make competitive barriers effectively.
Limitability: It can be said that available resources can not be obtained by ant other business in
terms of significant competitive advantage.
Non-Substitutable: The resources and material used by Vodafone is not easy to substitute by any
of other resources available in the market effectively.
SWOT analysis of Vodafone:
Strengths: The firm has massive market coverage and also ranked 395th among world top 2000
brands by Forbes effectively. The firm is just behind to number one ranked telecommunication
market china mobile. Vodafone operates in total 25 countries globally. Revenues generation is
also very good which is 87.3 billion dollars. It is ranked 84th among 2000 most effective brands
market values. In addition to this,, the Vodafone zoozoo’s was a brilliant and endearing
campaign which converted many users to die hard fans of Vodafone.
Weaknesses: The main weakness of business is that it is dropping subscriber base that the
analysis shows that the firm is dropping customer base in the last 4years effectively. The brand
valuation is also decreasing which is the possible reason for decreasing subscriber base as well.
The company started well in both but now suffering since last 3 or 4 years. The market share is
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also losing in USA where some other networks are taking places effectively. The performance of
Vodafone is also poor in Europe section.
Opportunities: There are many opportunities for Vodafone in order to expand business and
operational activities which will also help to increase production and profitability. Emerging
markets such as developing countries for an example India is one of the rural market for
Vodafone in order to increase disposal income effectively. In addition to this, 4G spectrum also
help to create disruption .
Threats: One of the biggest threat for business is competition in the market. Vodafone
competitors such as Reliance Jio, BSNL, Virgin and China Mobile has a strong market
reputation as well as customer base which affect business operational activities and profitability
effectively. Mobile number portability is one another option for customers which helps to switch
brands without changing the number. This will have both negative and positive impact over
business.
Thus, it can be said that SWOT analysis will help business to identify and determine
strengths, weaknesses, opportunities and threats which helps to make strategies accordingly in
order to enhance profitability and production.
TASK 3
Porter's five force analysis
Porter's five force analysis
It can be said that porter five force analysis will help to determine competition, threat of
new entrance, bargaining power of suppliers and buyers, threat of substitute products and finally
the rivalry among competitors in the business effectively. This will have a direct impact on
business strategic competitiveness and also above average returns effectively. This will also help
business to manage strategies in order to compete others in market which will also help to
increase competitive advantage. This will increase production and profitability which helps to
enhance market share effectively and efficiently. It is a powerful tool which helps business to
understand competitiveness of business environment to identify and make potential strategies to
increase profitability. The tool was created by professor Michael Porter to analyse attractiveness
of business. This will help Vodafone to achieve long term profitability in terms of wireless
communication industry.
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Threats of New Entrants: It can be said that new entrants in wireless communication brings
innovation, new ways of doing businesses and other things put pressure on Vodafone Plc which
lower pricing strategies and reduce cost which also provide new value propositions for customer
in the market.
In order to reduce impact of new entrant, there are some strategies which should be
followed by organisation such as innovating new products and services. This will help to bring
new customers and provide a valid reason to by products and services from Vodafone. The firm
is also able to build economy scale which helps to lower fixed cost per unit. Vodafone can also
build capabilities by spending money on research and development.
Bargaining Power of Suppliers: It can be said that, all most all the wireless telecommunication
businesses buy their raw materials from different and numerous suppliers effectively. Suppliers
who are in dominant position can decrease business margins earning from the market. Suppliers
who are powerful in technology sector use their negotiation power to extract higher prices from
businesses related to wireless telecommunication sector effectively. The overall impact of
suppliers bargaining power is that it lowers the overall profitability of Wireless Communication.
In order to tackle the bargaining power of suppliers the firm is able to build effective
supply chain by managing multiple suppliers in the market. Products and services can be
differentiate by business by innovating something different which will help to tackle suppliers in
order to produce new raw materials. For an example, Vodafone Group Plc can learn from Wal-
Mart and Nike is how these companies developed third party manufacturers whose business
solely depends on them thus creating a scenario where these third party manufacturers have
significantly less bargaining power compare to Wal-Mart and Nike effectively and efficiently.
Bargaining Power of Buyers: Buyers are the main element of business that they are often more
demanding towards products and services offered by firm. They want services at very low cost in
order to avail prices. This will put pressure on business in terms of profitability and production
effectively. Vodafone Plc has a strong customer base that it will affect business strategies and
plans and customers bargaining power will remain high.
In order to tackle the bargaining power of buyers a large customer base will help business
in two effective ways. It will help to reduce bargaining power of customers and provide
opportunities to business to streamline its sales and production procedure effectively. Innovation
towards products and services such as offers, discounts and policies for customers in the market
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which they often seek. New products and services offered by firm will also help to reduce the
defection of existing consumers of business to its competitors.
Threats of Substitute Products and Service: Threat of substitute products and services arises
when a new product meets a similar customer need in a different way effectively. This will
decrease effectiveness as well as sales of business which has a great negative impact on
Vodafone profitability. For an example services like Dropbox and Google Drive are substitute to
storage hardware drives.
In order to tackle or treat substitute products and services, the firm should be service
oriented rather than product oriented. The core need and requirements of customers should be
address by business rather than what customer is buying. Increasing switching cost for
consumers in the market will also help to treat substitute products.
Rivalry among competitors: It can be said that there are so many competitors of Vodafone
which affect the profitability and production of business. BSNAL, Aitel, Idea, Aircel, Virgin and
many other companies are awaiting to cross Vodafone business in terms of market share,
production and profitability. They also providing telecom services, mobile services and
broadband which affect business operations and productivity. For an example, Vodafone
business provides two services such as bundle and three service bundle packages and Virgin
media provides four services of bundle package.
The firm should make some effective barriers in order to tackle the competitors in the
market which helps to reduce negative impact of competitors on business effectively.
TASK 4
P4 Bowman strategic clock model
The model will help to explore options for strategic positioning and also how should
products and services offered by business can be managed towards competitive position in the
market effectively.
Low Price and Low Value Added
The position describe that this is not the effective competition position for he business
that products and services can not be differentiate according to the customer values to despite a
low price. This is a bargain basement strategy that the only way to remain competitive is to be
cheap as the business can that hope there is no-one is able to undercut Vodafone effectively and
efficiently.
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Low Price
In this position business assumes itself to be the low cost leader in the market.
Cost ,minimisation strategy and plan is required to success in this position effectively. This
should be associated with economic scale. Profit margins on each product are low, but the high
volume of output can still generate high overall profits. It can be said that competition among
organisation with position of low prices is usually intense and often include war of pricing
strategies.
Hybrid
As the name implies there are some elements of low prices involved in this position. This
are related to the competition and also differentiate products and services effectively. The main
of business is to provide value to customers in the market with the combination of fair price and
acceptable products and services. This is a effective strategy to add value to products as well as
customers.
Differentiation
The aim of this differentiation strategy is to perceived higher value from products and
services by making a difference between them and products available in the market effectively.
A high quality product with strong brand awareness and loyalty is perhaps best-placed to achieve
the relatively prices and added-value that a differentiation strategy require effectively and
efficiently.
Focused differentiation
The strategy helps business to aim towards products prices at higher level where the
customers can purchase the products and services offered by Vodafone because of the high
prices effectively. The strategy is adopted by luxury brands which has a great brand value in the
market as well as customers in order to enhance sales and profitability. Done successfully, this
strategy can lead to very high profit margins, but only the very best products and brands can
sustain the strategy in the long-term.
Risky high margins
The strategy is very risky as well as might argue with the failure eventually and
effectively. The business in this strategy set their products and services prices high without
offering any discounts or extra items in order to gain maximum profitability. In this case if the
customer regularly buy the products and services than it will be profitable for the firm and if not
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it will lead to decrease production effectively. The risk margins are high that Vodafone Plc can
try this strategy but only when the production is going good and profits are also increasing.
Monopoly pricing
Monopoly in a market will affect business that there will be one firm in the market in the
presence of monopoly effectively. The monopolist doesn’t need to be too concerned about what
value the customer perceives in the product the only choice they have is to buy or not. There are
no alternative for business in order to manage such monopolies effectively and efficiently.
Loss of market share
The position can be described as a recipe for market in any competitive market
effectively. Setting a middle price for customers who have much better option will lower the
perceived vale and higher for the same in terms of competitors effectively.
Overview
It can be analysed that looking at the strategic clock the three position such as 6, 7 and 8
are uncompetitive. These are the position where the perceived value is less than price offered by
business in the market towards customers effectively. It can be said that competition among
organisation with position of low prices is usually intense and often include war of pricing
strategies. This is a effective strategy to add value to products as well as customers.
CONCLUSION
It can be analysed and concluded from the above report that, Vodafone in one the best
telecommunication service provider business operating from UK. It has business in India, Europe
and many other regions effectively. The business and operational activities are affected by some
factors. The Ansoff Matrix is a strategic planning tool that helps to provide a strategic framework
to help executive, senior manager, and marketer devise strategies for future growths and
developments. The internal analysis will help to determine strategies, plans, resources,
competitors and stakeholders which helps to increase production and profitability. SWOT
analysis will help business to identify and determine strengths, weaknesses, opportunities and
threats which helps to make strategies accordingly in order to enhance profitability and
production. It can be said that porter five force analysis will help to determine competition, threat
of new entrance, bargaining power of suppliers and buyers, threat of substitute products and
finally the rivalry among competitors in the business effectively. This will increase production
and profitability which helps to enhance market share effectively and efficiently. Bowman
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strategic clock model will help to explore options for strategic positioning and also how should
products and services offered by business can be managed towards competitive position in the
market effectively.
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REFERENCES
Books and Journals
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