Vodafone: Impact of External Factors, CSR, and Sustainability Report

This report provides an in-depth analysis of Vodafone, a leading telecommunications company, examining the influence of external environmental factors on its operations. It utilizes PESTLE and Porter's Five Forces frameworks to assess the political, economic, social, technological, legal, and environmental factors impacting Vodafone, as well as the competitive landscape. The report further explores Vodafone's Corporate Social Responsibility (CSR) policies and sustainability initiatives, evaluating their relevance and effectiveness in the context of business decisions. The analysis includes a critical assessment of Vodafone's responses to these factors and suggests areas for improvement to ensure its long-term sustainability and success in the competitive global market. The report concludes by emphasizing the importance of adapting to market changes and maintaining a strong CSR focus for continued growth.

Contemporary
Developments in
Business and
Management

EXECUTIVE SUMMARY
As the companies are expanding their businesses in global markets there is an increasing
need for making development in their business and management so that they can survive in the
competitive market and achieve their goals in an efficient manner. The companies that give
telecommunication related services to customers need to follow various CSR policies so that
their sustainability can be maintained which is important for the growth and development of
company. In this report Vodafone is taken and the external environmental factors which affect its
functions are discussed along with the CSR policies that are followed by it so that its
sustainability can be maintained in competitive market.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Influence of external environmental factors and their importance to organisation.....................4
TASK 2............................................................................................................................................7
Relevance & influences of CSR and sustainability on business policies and decisions............8
Critical analysis of the effectiveness of Vodafone's response....................................................9
Some areas for improvement....................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Due to the increase in globalisation businesses are expanding and their global markets are
also increasing which means that they have to make developments in their business and
management so as to face the changing conditions in market. It is important to analyse the
external and internal factors which affect business sustainability so that the negative impact of
these factors can be efficiently dealt with which will help in continuous existence of business
(Christensen, Hail and Leuz, 2018). To gain a competitive advantage in market, management of
company needs to change their managerial policies and strategies in accordance with the
changers that exist in internal and external business environment. This report is based on
Vodafone Group plc which is a British multinational telecommunications conglomerate having
its headquarters in London and Newbury, UK. Vodafone is one of the world's largest
telecommunications service companies having its operations in over 60 countries. In this report
the impact of external environmental factors on Vodafone will be analysed along with the
company's response to them. Further the importance of CSR and sustainability in reference to
Vodafone will be studied so that it can survive sustainably in market.
TASK 1
Influence of external environmental factors and their importance to organisation
While operating in market businesses are affected by various external factors that need to
be analysed so that the change in any of these factors do not negatively affect the company's
operations. External environmental factors cannot be controlled or changed but can only be dealt
with by formulating efficient policies or strategies by company so that the positive impact can be
used for company's advantage while the negative impact can be minimised. PESTLE analysis is
usually done by companies so as to study the impact of external environmental factors affecting
their business as it is a strategic management tool which gives a complete evaluation of all the
factors.
PESTLE analysis of Vodafone Group plc:
Political: While operating in a country, businesses are affected by the governmental
policies and rules which affect the trade of company in and outside the country. Some of the
political factors which affect a company are taxation policies, trade tariffs etc. which change with
the changing government. Vodafone is a telecommunication service company which gives voice

and data services over mobile phones to their subscribers in UK and many other countries. UK is
a politically stable country which means that the rules and regulations that affect economic
environment and trade do not change frequently which helps Vodafone to increase its sales and
profitability with is existing policies and strategies. Other political factors of UK which have a
positive impact on Vodafone are that the government of UK promote companies which bring
advanced technology and also supports them if they enhance the standard of living of people.
This helps Vodafone to increase its market and grow profitably so that the customers can be
given easy accessibility to internet through the data services provided by the company
(Dickmann, Brewster and Sparrow, 2016).
Political factors thus play an important role in an organisation as they affect the
managerial decision-making so that management of company make such policies which help in
the growth and development of company in market.
Economic: These factors are related with the economic condition of a country which
depends on its GDP, unemployment rate, purchasing power, inflation rate, interest rate, banking
policies etc. and also affect the businesses as their sales depend on the ability of customers to buy
their products and services. UK is economically strong and stable which means that the
purchasing power of people of the country is high and they can afford services given by
Vodafone. This helps Vodafone in launching new and different schemes so as to increase its
sales and increase the number of its customers. Also the people in UK are ready to accept
advanced technologies which means that company can increase its market in the country which
will help in enhancing its profitability and stability. Also as the UK economy is positively
growing this will help in increasing the Vodafone sales and the bank rates are also favourable
which means that Vodafone can expand its infrastructure to operate in an efficient manner
(Elving And et. al., 2015).
Economic factors are thus important for a company as the cost of products and services
can be determined by analysing the purchasing power of customers and demand of products in
the market. This factor helps in determining the change in purchasing pattern of customers
depending on the price of company products.
Social: The social factors are related to features of population of country like their
religion, culture, standard of living etc. which affect the sales of a company and its profitability.
In UK the standard of living of people is high which means that they can accept advanced

technology to make their lives easy and more satisfactory. Vodafone can thus increase its
business operations in the country as people will be able to buy its services which will increase
its sales. Internet usage has increased both at individual and organisational level with an
increasing demand of faster connections which means that the company can increase its business
if it enhances its quality which will help in attracting more customers. The emergence of social
networking sites has also increased which has enhanced the consumption of internet by people in
country (Hammer, 2015).
This factor is important for company so that the change in taste and preference of
customers can be analysed which will help the management to make changes in their policies so
that more customers can be attracted and sales of company can increase.
Technological: It relates to the technological advancement that occurs in a country and
also the rate at which R&D is promoted by country government. UK is a technologically
advanced nation which means that Vodafone can have an easy and cheap access to advanced
technology which will help in making its operations smooth and will also help in enhancing its
efficiency. Telecommunication is a technology dependent and technology intensive industry
which means that the role of technology is high for Vodafone. Vodafone can make use of
technology so that more user friendly and convenient interface can be provided to its customers
which will increase its profitability (Hopkins, 2017).
Technological factors are important for company as innovations can be brought in
company products and services based on the advancement in technology that is present in the
market. This helps the company to improve their products so that they can increase customer
satisfaction along with its brand image in the market.
Legal: These factors are related to the legal system of a country, its laws and legislation
which governs the operations and functions of businesses so that their activities fall under the
legal framework of the country. In UK various laws related to telecommunication exists which
are to be followed by Vodafone like Communications Act, 2003, Broadcasting Act, 1996, Digital
Economy Act, 2010 etc. which are to be followed so that the companies can work legally. If the
companies fail to follow laws of company then they can face legal prosecution, punishment or
penalty which also negatively impacts the company reputation and decrease their sales.
Legal factors are thus important for an organisation so that they can formulate policies
and strategies which are not against company laws and which favour all the stakeholders of

company in a positive manner. The company can earn loyalty of its customers by working
legally in the country which also help in enhancing its image in the face of public (Idowu And et.
al., 2016).
Environmental: These factors are related to the environment of a country like the level of
pollution, availability of natural resources, temperature, weather conditions etc. which affect the
successful existence of business. UK have an abundant supply of resources that are required by
Vodafone to expand its network which means that the company can grow and develop profitably
in the country. Also the weather conditions of UK are not extreme which can affect the towers
installed by company which means that the company can make data services available to
customers to a large number of people.
This factor is important for a company as the availability of required resources affect the
successful existence of business in market and also help the company to expand so that its profits
and sales can increase which will help in improving its brand image.
Porter's Five Forces of Vodafone:
It is a framework which help in analysing the competitive environment in which j a
company operates so that the intensity of competition can be determined in the industry so as to
evaluate its attractiveness for businesses. Following are the five forces which can affect
Vodafone in the market: Existing Rivalry: The logistics and operations of Vodafone are highly efficient which
means that it can offer its services to customers at low prices which helps it in becoming
a cost leader in the market. This means that the threat of competition in market is low as
the company is efficiently able to deal with competitors by decreasing its prices and
attracting more number of customers thereby increasing its sales. Bargaining power of buyer: The bargaining power of buyers in telecommunication
industry is high due to the presence of many competitors in the market and the lack of
differentiated products. This means that the switching price of buyers is low which means
that they can start using the services of other companies. However in case of Vodafone as
the company offers its services at low prices which means that the customers stay loyal to
company and Vodafone continues to increase its profits. Bargaining power of supplier: The power of suppliers for Vodafone is more which
means that they can increase their prices affecting the company profits. However as the

logistics of company are strong which means that Vodafone can maintain low prices from
suppliers while making profits. Barrier to entry: The threat of new entrants in telecommunication industry is low as the
industry requires huge investment so as to start its operations. This means that the market
conditions are favourable for Vodafone which helps it in making profits.
 Substitutes available: With the increased use of internet the usage of video conferencing,
e-mails, social networking etc. have increased which gives Vodafone the advantage to
grow in market. The threats of substitutes is low in the market which helps it in
increasing its profitability.
TASK 2
CSR and Sustainability of Vodafone Plc
This is a self regulating business model that helps a business organisation to be
accountable for themselves, public and stakeholders as well in a social manner. Being a social
responsible a firm can able to develop their goodwill and brand value as well as grow to sustain
for longer duration of time in the marketplace. Social obligations empower their employees to
leverage organisational resources as well as they can improve workers morale and lead them
towards huge productivity and profitability (Jain and Winner, 2016).
Relevance & influences of CSR and sustainability on business policies and decisions.
As the company Vodafone plc. which is a British multinational telecommunication that
headquartered in London and Newbury, Berkshire, United Kingdom. It was founded in 1991 by
Ernest Harrison and Gerry Whent which serve across world. The company Vodafone plc,
predominantly operates their services in several nations like Asia, Europe, Africa, Oceania.
Relevance of CSR & Sustainability with Vodafone Plc:
As Vodafone is large in size and operates across globe so it has huge number of
suppliers, buyers, customers and so forth stakeholders and they have loyal as well as strong
relations with this brand. To maintain positive and long term relationship along with the
sustainability firm require to be focus on their CSR activities which helps in facilitating better
satisfaction to all staff members. Through which company can get advantages of sustainability
and loyal or satisfied base of customers (Kaphle, Nagaraju and Daima, 2018).
Influences of CSR and sustainability on Vodafone's policies and decisions:

Numerous elements are present which effect the managerial policies as well as decisions
of Vodafone Plc. So company requires to view some strategies related to the CSR activities as
well as sustainable approaches so that they can get better growth and development. Such
influences are considered as below:
Customer influences: Customers are known as a market king which take its own
decisions and make choice of purchasing goods and services from respective company. As
customers make decisions by considering several factors in comparison of several brand like
they prefer better quality, less price, ethical consideration, nature friendly and so on that may be
impacted by company's goodwill and brand image. Vodafone can create huge customer base by
making effective strategies which are in favour of their customer's and society as well as
considers several corporate social responsible activities.
Self influences: When a company get high involvements then they have huge influences
of itself in the telecommunication services and in a social manner they covered large or detail
information about their customers. This will help in making effective management of company
along with the best practices and decisions by means of its self control. By adopting CSR
practices businesses might be able to develop innovative ideas that aids in getting market
opportunities at first and moves towards the sustainable development of company (Kim and Ji,
2017).
Investors influences: CSR activities of Vodafone assist their investors to make precise
investment decision towards a company so this is also termed as a business influencer. CSR and
sustainability activities help business for getting huge amount of investment from outsiders and
aid investors to take effective investment decision. So the company Vodafone design marketing
strategies and practices in a clear form that will assist investors to take valuable decisions
regarding investment and it may also gives the long term sustainability in the competitive
marketplace.
Employees influences: Workforce is an essential part of all business organisations which
helps in accomplishing the objectives and goals of company in order to achieve and lead success.
Vodafone's workers are considered as an important aspect because they make influences on
business decisions and policies so that manager of company is responsible for satisfying their
employees and get valuable or productive returns and gain a sustainable position in the
marketplace. For getting employee satisfaction Vodafone require to plan or make appropriate

decisions and practices which are highly accountable in social manner so that they feel satisfied
and motivated towards their achievements and performance and give sustainable outcomes
(Kudłak and Low, 2015).
Public influences: For all businesses media is most influencer because it effects or make
brand image in global world. It is either positive or negative influences which directly leads
business success or failure respectively. If the company Vodafone operates their businesses in
accordance of CSR activities that means which spread across the world through the mode of
media which means promotion of brand across world is automatically done and it may leads
towards increasing customers base through spreading a positive note of company.
Competitors influences: Mostly, businesses formulate plans and policies towards their
operational activities by analysing the competitors strategies and positions because rivals are the
most threat of businesses. Whereas, Vodafone involved in CSR activities towards the advantages
of community or public which makes them diverse from their rivals. This will aid in gaining
competitive edge in the market as well as sustain for longer duration of period (Lambert, Browne
and Michaelides, 2015).
Critical analysis of the effectiveness of Vodafone's response
Vodafone needs to be highly responsive towards corporate social responsibilities and
sustainability so that the company can take good care of the interests of all its stakeholders which
help it in enhancing its brand image in public. Some of the responses of Vodafone along with
their effectiveness are discussed below: Customer focus: The main focus of Vodafone is to provide best customer service so that
their value can increase thereby enhancing their loyalty towards company. The company
takes good care of protecting the data of their customers from getting misused and gives
them privacy and online protection. The company keeps close touch with customers so
that best possible services can be given to them. With the increased use of social
networking sites the risk of public data being misused is increasing which means that the
company actively take initiatives to protect their customer's data and enhance their
satisfaction. This has been effective as the company is able to protect its customers to a
great extent and also it gives effective services which enhances their experience of using
Vodafone (Pandey and Pattnaik, 2017).

 Going greener: Vodafone follows CSR policies so that it can sustainably survive in the
market and can also save energy so that no negative impact is created on the environment
like overuse of resources and energy, increase in pollution or safety hazards due to the
radiations emitted by its networking towers installed by company at various locations.
The company focus on reducing the use of energy like use of lights in offices so that
energy can be conserved. Also the company is trying to cut on paper usage, making old
network equipments and handsets available for reuse where possible and recycling them
as much as possible. This response is effective as the company is able to save resources
to a great extent which helps in saving environment (Priyankara, 2019). All in a good cause: The company tries to be charitable towards society by funding the
vulnerable people to lead a safer, healthier and happy lives. Company employees try to
volunteer for raising funds and also the company has World of difference programme
which help in raising funds from people in all over the world which can be used for the
welfare of society. This response is effective as the company is able to provide welfare
services to a large number of people in society. The best people: The company emphasises on creating an environment of employee
engagement and advocacy by involving the employees in decision-making and also
involving them in regular training and development programmes so that their skills and
talents can be made efficient and also their confidence can be boosted. This also help in
retaining employees in the company by communicating clearly, openly and honestly so
that effective communication can be established. This response is effective as the
employees of company are highly motivated and satisfied with their jobs (Renwick,
2018). Working with suppliers: The company sets high standards for making purchases from the
suppliers through their Code of Ethical Purchasing (CEP) so that the health and safety of
company stakeholders can be ensured along with fraud management. The supply chain of
company is also fully trained and engaged with CR programme so that ethical standards
can be maintained. This response of company is effective as the suppliers of company
works ethically which help in its sustainability. Employee betterment: The company focus on making working environment for its
employees safe and secure so that they can work efficiently and their performance can

improve which helps the company in achieving its goals and objectives on time. The
company also give performance appraisals and other benefits to their employees which
help in enhancing their confidence and also motivating them so that their performance
can become efficient. The company also provides flexible working environment for their
employees so that a work-life balance can be maintained. This response is effective as it
helps in making the lives of their employees better and also improve their working
efficiency (Waugh, 2019). Ethics and compliances: Vodafone set high ethical standards which are to be followed in
the company and also emphasise on compliance of rules and regulations so that the
company activities can follow a set standard. The company also conduct all its activities
without getting involved in corruption and also all the employees work as per the desired
standards which help the company in gaining a competitive advantage in the market. This
response is effective as the company is well known for its ethical behaviour and also for
its legal compliance which helps it in growing in the market. Minimising unemployment: The company help in minimising unemployment by
providing employment opportunities to many people in UK based on their skills and
talents so that all the members of society can earn and also their standard of living can be
raised. Vodafone focuses on minimising unemployment in the country which makes the
company responsible towards the society and also help it in its sustainable development.
This response is effective as the company is able to reduce unemployment to a great
extent which is beneficial for the society (Wilton, 2016).
 Solve customer complaints: The company focus on giving quick response to the
customer complaints and solve their problems so that the inconvenience faced by
customers can be resolved. This help the company in gaining trust of customers thus
creating a good image of company in public.
Some areas for improvement
Vodafone try to follow CSR policies in the company so that it can take care of the
interests of all its stakeholders which help it in creating high customer value and also contribute
in maximising customer satisfaction. The company has been efficient in applying CSR policies
which helps it in expanding its business across nations so that it can provide various data services
to its customers and increase its sales. The company also contribute towards the economic