Strategic Analysis of Vodafone: PESTLE, Porter, and Value Chain Review

This report presents a comprehensive analysis of Vodafone's corporate strategy. It begins with an external environmental analysis using the PESTLE framework to identify political, economic, social, technological, environmental, and legal factors impacting the telecommunications industry. The report then employs Porter's Five Forces model to assess the competitive dynamics within the industry, including the bargaining power of suppliers and consumers, the threat of new entrants and substitutes, and competitive rivalry. Subsequently, the report delves into Vodafone's internal capabilities through a value chain analysis, examining primary and support activities. A VRIO analysis is also conducted to assess the value, rarity, imitability, and organizational aspects of Vodafone's resources. The analysis reveals Vodafone's strengths, weaknesses, opportunities, and threats, providing a holistic view of its strategic positioning within the global telecommunications market. The report highlights the company's key competencies and resources and evaluates its strategic choices considering the external environment and internal capabilities.

APPLIED CORPORATE
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................4
1- External environmental analysis to determine opportunities and threats....................................4
2- Analyzing key competences and resources of company to determine set of strengths &
weaknesses..................................................................................................................................8
3- Strategy evaluation...............................................................................................................12

INTRODUCTION
Corporate strategy entails a clearly categorized, long term vision that companies set,
seeking to develop corporate value and inspire workforce to implement appropriate actions to
achieve consumers satisfaction. It is important strategic tool because it permits a company to
focus variety resource on a single business objective. Telecommunication industry within sector
of communication and information technology is made up of all telephone firms and internet
service providers, as they develop business strategy to gain competitive benefits.
The current study is based on Vodafone, which falls under list of leading
telecommunication organizations in the whole world. It considers as leader in technology
communications through fixed, mobile, TV and broadband . The aims of this company is to build
a digital society or a world that enhances socioeconomic growth, embraces everyone and does
not come to cost of earth.
1- External environmental analysis to determine opportunities and threats
PESTLE
Political-
It is the factor that relates to the government intervention and the political stability in the
country which poses a great impact on the functioning of the business. The level of the
government intervention in business world at a global level has grown a high pressure on the
brands that are operating internationally. Political instability in the country leads to changes in
the rules and regulations of government on frequent basis which in turn creates complexity for
the telecommunication industry to operate in compliance with the updated rules as it is seen as
the lengthy process. Further, the telecommute sector also facing a growing pressure because of
increased level of government control. However, stability of government results to increased
support and developing healthy relations between organization and government. For example-
the major market Vodafone are indicated as Europe & Asia Pacific along with Middle East &
Africa. Level of the political stability in such regions impacts profitability and sales. On the other
side, demand for the technological services across world has been grown in decade which results
in growing level of the government control on industry.

Economical-
This type of factor includes exchange rate of currency, disposable income, interest rate
and taxes that directly influence the profitability of an enterprise. A rise in the income of people
results to increase in their purchasing power and demand which in turn induces them to spend
more and this shows a positive impact on the revenue & profits of the telecommunication
industry. On other note, if the disposable income of people reduces because of increase in taxes
and interest rates which in lets to decrease in demand and the people would be spending less.
This imposes a negative effect on the revenue of an enterprise as its sales would fall. For
instance- Some main markets of Vodafone are UK, Italy and Spain. An economy of such nation
has been performing very well along with Europe, but Brexit in UK had created pressures on the
firm which would continue to impact profitability of the company in UK.
Social-
The main changes in the social or cultural factors of economy have profound effect on
profitability & sales of the business specifically in particular regions. Change in the lifestyle and
preferences of customers directly affects financial health of an entity. Growing demand for an
internet around the world because of consumerism facilitated an increase in demand for quick
internet services. Internet is mainly used for work as well as entertainment purposes and growth
in the demand of internet proved as beneficial for the international telecom firms like Vodafone.
On other state, differences in the educational backgrounds of marketers & target market might
create barrier towards an effective information flow. For example- Vodafone is mainly a
European based firm that has thorough understanding of lifestyle, education, beliefs and buying
choice of the customers around the world that will help the company in expanding customer base
through targeting right kind of people at right place.
Technological-
Along with above factors, this factor also affect growth and profitability of
telecommunication industry, but in positive manner (Willner, 2019). As it help to enhance
business practices and allow companies operating into this sector to grow even better which is
quite beneficial for overall industry in term of increasing profit margin. Technology
advancement is one of the technological factors that put positive affect on this industry. It gives

several opportunities to organizations like Vodafone to reach at target market and gain their
attention towards purchasing the best plans. With this opportunity, industry can provide higher
user convenience and to progress consumers engagement. For example, Vodafone company
running into this sector can develop mobile applications, through that people can recharge their
smart phone and identify the best plans for themselves. It drives many people towards firm and
company can retain all of them for long run.
Illustration 1: PESTLE Framework
(Source: Pestle-analysis, 2020)
Environmental-
Government and consumers concern for environmental sustainability put high pressure
on telecommunication industry in UK. Both stakeholders force companies under this sector to
reduce their carbon foot print. It can be considered as opportunity for industry, which they can
grab and build positive brand image at international level (Gallego‐Alvarez and et.al., 2017). For
example, Vodafone and other companies under this sector by investing in reducing their carbon
foot print and making venture procedures sustainable, build strong market image which in return
enhance level of position and help to reach at top.
Legal-
Legal and law factors have also acquired a very essential role in telecommunication
industry. Around the world, law enforcement and government agencies have increased level of
control and oversight of companies (Will, 2019). Growing regulatory and legal pressures can
make progress difficult for whole sector, it is one of the threat firms can face while operating
their business within industry as it affect existing organizational strategies and policies
negatively. For example, sudden changes in employment laws put negative on current policies

and practices of firm related to topic. As it put pressure on company to make further changes
accordingly which consume a lot of time and money as well.
Porter Five Forces Model-
Bargaining power of suppliers-
It can be said that suppliers of telecommunication industry have a high bargaining power,
they hold power to make further and current changes in pricing structure of companies (Chesula
and Kiriiny, 2018). Market share is wide meaning that it can absorb any cost increments from
number of suppliers more than competitors can. It put negative impact on growth of whole sector
and companies like Vodafone who is leader in the market.
Bargaining power of consumers-
The degree of this force is high, due to cut-throat competition and deficiency of
differentiated services or products (Sultana, 2016). It effectively reduces cost prices in
telecommute industry through not to extent of their competitors. For example, as such Vodafone
will keep devising reasonable profitability as compared to their business rivals.
Threat of new entrance-
Extent of this force is low because of challenges and obstacles to entry. Organizations
wishing to enter into telecommunication industry need to pay huge licensing fees coupled by
spectrum accessible and regulatory problems attached to sector (Clò, Florio and Rentocchini,
2020). Similarly, costs of setting up new network infrastructure are high and continually
changing technology make it more difficult for new firms to cope. As outcome, it gives firm the
best change in term of retaining potential consumers for longer.
Threat of substitute products or services-
Degree of this factors in moderate because, consumers prefer to use the best services or
goods based on its performance. Under telecommunication industry, Vodafone offers the best
plans that can moderate this force. Due to lack of quality services offered by substitutes,
consumers use Vodafone services (Isabelle and et.al., 2020).
Competitive rivalry among existing companies-
Extent of this force is high, because all the companies operating under industry attempt
to gain competitive advantages and desire to become a market leader like Vodafone. Rivalry is

only one of varied elements that identified industry attractiveness, it is located at center of
diagram, it put high pressure on Vodafone company to develop better corporate strategy (Guo,
Yu and Gimeno, 2017).
2- Analyzing key competences and resources of company to determine set of strengths &
weaknesses
Value chain analysis-
Primary activities-
Inbound logistics-
Vodafone company is able to develop good relationship with their suppliers as it is one of
its strengths that cater many benefits of them (Kerl, 2018). By building good connections with
suppliers they can obtain better quality of services which make firm capable to deliver their
items to consumers at timely manner.
Operations-
This activity include manufacturing of items and services operations. In context of
Vodafone, management is able to cater fast internet speed to target market in effective manner by
using varied technologies and methods to make it better for consumers.
Outbound logistics-
In include activities that serve services to people by passing through varied
intermediaries. Vodafone increase safety precision mapping and deliver assets tracking which
make individual able to fully monitor their assets anywhere. Via using wide area network, they
provide the fastest speed services to clients.
Marketing and sales-
In order to promote their products or services, Vodafone marketing team are using varied
digital technologies or platforms in recent time that help to generate brand awareness in market
place.
Service-
Pre and post sale services offered by company is playing an essential role in developing
consumers' loyalty. Organization is able to offer post sales services which is one of their
strengths. Firm hire people who are available for consumers at 24 hours for providing services .

Supportive activities-
Firm infrastructure-
It denotes a range of actions such as legal matters, quality management, planning
financing, strategic management and accounting. It analyzed that Vodafone organizational
structure has been changing over ears in tandem with discerned organizational aims as it affect
workers performance and business activities negatively. Due to it, applicants are unable to
perform effectively, that is one of organization weaknesses.
Human resource management-
To enhance performance level and business productivity, HR manager hire skilled and
talented workers who are able to solve query of each consumer in effective manner and satisfy
them.
Technology development-
As discussed above, Vodafone is capable to retain their consumers for long because they
are using advanced technologies for varied business operations and functions. They are using
Illustration 1: Porter's Value Chain Model
(Source: Value Chain Analysis, 2019)

automation software and consumers services supported technologies which is quite beneficial for
company in term of increasing their service speed even better.
Procurement-
Vodafone company is carefully considering their procurement activities and actions to
optimizing inbound and other activities. They determine needs of consumers and make changes
accordingly.
VRIO model-
Resources Valuable Rare Imitable Organization
Human
resource
It is valuable for
company to build
good relationship
with their existing
and new
applicants.
This resource is
rare because most
of the firms
operating in this
industry cannot
be able to retain
skilled applicants
for long.
Any organization
into industry
where Vodafone
operate build
strong workforce,
when they
conduct good
practices.
Vodafone have
organized
management
program that
enhance
performance of
all worker.
Consumers
satisfaction
Firm is able to
satisfy their target
market.
It helps firm to
gain competitive
advantages as
they have number
of satisfied
customers.
Organization is
able to provide
better services.
They satisfy
people by
providing after
sales services.
Brand
awareness
Along with above
resources, it is
also valuable for
company.
It is rare because
no one can
generate
awareness of their
brand in effective
manner.
No it is not
imitable, as many
firms are unable
to do this.
Firm attempt hard
work to do this by
creating different
strategies and
using methods.

Organizational
infrastructure
It is valuable for
company, because
it helps to
accomplish day to
day activities on
timely manner.
It is very rare for
companies to
have appropriate
structure.
It can be copied
by other.
Organization
change their
structure that
impact business
activities.
Management
styles
It is important for
company to
follow the best
management
styles.
It is rare as many
companies are
unable to adopt
effective
management
styles.
It is not imitable
because no one
can copy other
styles
appropriately.
Vodafone does
not perform
effectively in
Europe because
they do not using
right management
styles.
Resources- 4 strengths and 1 weakness
Vodafone company has effective team and skilled workforce who are able to serve
appropriate and quality services to consumers and also provide post services which is quite
beneficial for success and growth of its business.
Another strength of company is that it have strong brand image in market, which they
build by generating awareness about products or services by utilizing varied methods. They
effectively generate brand awareness by using social media and digital platforms, which make
them able to generate more profit as well.
Consumer satisfaction is one of the most important resources for company that build
market image at global level, as it also help to promote their services. It contributes to business
competitive advantages in effective manner.
The last strength of Vodafone is their retail outlets, as they have number of consumers
services office where people can go to ask any query about plans and offers.

Poor performance in Europe is the weak point of Vodafone due to ineffective
management style. They are unable to perform effectively which impact on sales, and they may
be loss loyal consumers.
Competences-
 With talented team of people, company effectively gain competitive advantages as they
can deliver fast services to target market. Vodafone to enhance performance of staff and
motivate them develop plans like training and development as well as other.
 Vodafone does their consumers happy, by offering the best plans created for everyone
without making any differences. With satisfied people company can enter into new
market place where they can grab attention of new consumers and achieve all competitive
benefits.
 They do many things to improve business performance even better, they adopt new
technologies and consider market trends which in return generate strong brand image of
Vodafone.
 The strength of this organization is renowned brand image which make them able to grab
competitive advantages while operating business at international extent.
 Vodafone do innovation as they consider as highly innovative organization in industry
that help them to gain all benefits, they want to achieve.
3- Strategy evaluation
Suitability-
TOWS model-
Threat-
Increasing competition, is one of the biggest threats possess for Vodafone that impact on
its business acquisition strategy negatively. They are unable to acquire another business because
due to this factor, organization feel more to manage their current business practices effectively.
In some essential Europeans market, firm lost market share and consumers. This is the major
threat for company which they face everywhere it goes, that affect strategy and decision-making
of management.
Opportunities-

Emerging markets and technologies are one of the best chances, can obtain by Vodafone.
It helps to improve performance and operational activities of company rather than its
competitors. Not only rural markets is emerging nations, other developing markets such as those
in Africa are also a better potential place for firm. These emerging and new places have
increasing disposable income and interaction become essential once a network in progressing.
Vodafone can play important role in it which is quite beneficial for them.
Weakness-
Dropping brand valuation is the weakness of Vodafone, that also impact on its acquisition
strategy and dropping subscriber base. It develops negative image of company in marketplace,
where a lot of potential consumers are available who can increase sales even better. It can be said
that subscriber base and business valuation of firm was quite strong to begin with. But both these
elements have them suffered in last 4 years. Due to this weakness company may not be able to
acquire business effectively.
Strength-
Along with all these things, Vodafone also have some strength that may be affect
positively on its business strategy. Brand equity is the important strength for company, it is sign
of reliability and trust which turn increase abilities of organization to achieve desire aims.
Organization is very popular and consumers favorite brand that people in different corners of
world trust. Because of this factor, company can acquire business where they want to.
Acceptability-
Interest matrix-
Keep satisfied-
Company need to satisfy their consumers, and
identify their needs.
Manage closely-
Suppliers are one of the external stakeholders,
who are able to affect business operations.
Company need to manage relations with them
closely.
Monitor closely-
Organization monitor performance of their
workers closely, which is really very important
Keep informed-
Organization keep government informed about
their business operations and strategies which

for success of business. they need to develop for gaining competitive
advantages.
High power and high interest-
Government is a external stakeholder who get effect by acquisition strategy of Vodafone
as they obtain many benefits in term of increasing GDP more than past few years (Ahmed,
2017). They are highly interested in growth of company and have strong power to change
existing operations of firm.
High power and low interest-
Another group of stakeholder is consumers who are affected due to acquisition strategy.
They have power to put pressure of Vodafone to make change in their pricing structure of
existing plans, but are also less interest in their services as they have alternative options available
in marketplace.
Low power and high interest-
Third group of stakeholder is suppliers, they are highly interested in success of company,
but have low power to increase price for each service they provide to firm. When organization
acquire business it affect this group positively as they are able to enlarge their services areas
through this activity.
Low power and low interest-
Employees are less interested in success of business and also have low power to make
any changes. The current business strategy to make negative impact on their performance, as it
put pressure on staff to perform effectively even better.
Feasibility-
Skills and financial resources that may be needed by Vodafone-
To make this acquisition strategy more successful, Vodafone require knowledgeable and
skilled applicants who can perform under high pressure and obtain desired outcomes. They can
recruit employees and even train existing as well to enhance their performance abilities and
current skills rather than before. Furthermore, they will develop decision-making skills by taking
suggestions from experienced holders who are able to take better judgment.

Vodafone will take financial help by applying for bank loan which is one of the best
source.

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