Vodafone's Global Business Performance: A Case Study

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SIM337 Contemporary Developments in
Business and Management Assessment
2019

Contents
Executive Summary.........................................................................................................................3
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................5
Primary External influences affecting business performance......................................................5
Importance of external influences in the context of a company......................................................7
Task 2...............................................................................................................................................9
Globalization and Guarded Globalization....................................................................................9
Globalization affecting policies and decision making for the Telecommunication Industry
(Vodafone)...................................................................................................................................9
Effect of Globalization on Vodafone.........................................................................................11
Globalization impacting markets of telecommunication industry.............................................12
Areas for Improvement in Vodafone Company.........................................................................14
Factors affecting performance of the business in international mark........................................15
Conclusion.....................................................................................................................................17
References......................................................................................................................................18

Executive Summary
This is the report which is focusing on the impact that external business is having on the
international market which is also evaluating the performance and the functions of the company
by stating its position and response related to the company. The company chosen for this study is
the telecommunication company of UK, Vodafone which is the leading telecommunication
company. The entire report is developed keeping in the mind the Vodafone Company and also
the activities and operations of these companies are detailed by choosing a theme of
globalization. It is also listing out how the globalization is having a strong impact on the
telecommunication company.

Introduction
This report is divided into two tasks, in task 1 the brief overview is given about the Vodafone
Company by detailing the external influences that the organization is facing. The organization
selected for this report is Vodafone- telecommunication Company. The second task of this report
is detailing about the globalization and guarded globalization. The second part of this report is
detailing the relevance of globalization on Vodafone Company by detailing the policies related
to decision making. It is also detailing the effectiveness of globalization on the company.
Globalization is the main reason which is leading to emerging growth and development of the
Vodafone Company which is explained in detail below.

Task 1
Every business firm or organization has a different working culture which depends on its
capabilities of competing in a targeted market. Working culture helps to determine the success
and failure of the company. Performance of any business firm gets affected by internal as well as
external factors. All these internal and external factors help a firm to achieve strategic and long
term objectives and goals. Vodafone is a UK based Telecommunication Company dealing in
various telecom services and operating worldwide. External influencing factors include the
external environment of a firm affecting the internal environment of a firm. Primary external
factors include consumers, the technology used, economy, competition, resources, social,
environmental and political conditions, etc affecting the performance of the firm. These factors
have impacts on the performance of the organization. External environment of a firm can be
further classified into macro and microenvironment. External influence consists of a competitive
market in which firm operates and other components of this market including legal,
environmental, social, political, technological and economic factors (Mahmoud, et. al., 2016).
Figure 1: Services provided by Vodafone Company

Primary External influences affecting business performance
In external influences, political influence includes governmental plans and policies, trade rules,
tax regulations, labor rules, environmental restrictions, stability factors, and trade laws, etc which
impacts the performance of the firm and helps a firm to respond in these scenarios effectively.
Vodafone needs to review all political scenarios of the respective area or country in which it
operates for successful business operations. Economic influences contain all factors related to
monetary of the firm including tax rates, currency exchange rates, inflation conditions,
expenditure and income of consumers and growth factor of the economy. Vodafone should
follow all economic related regulations in the context of the operating area. As it is a
telecommunication firm so it needs to focus on different telecom related parameters including
bandwidth, frequency range and various regulations of internet access. The economic growth of
a firm depends on the rate of unemployment and interest. Rate of economic growth helps a firm
to create more jobs to offer to reduce unemployment rates in the economy. Interest rates affect
investments of the firm in the market which depends on money lending and borrowing rates.
Competitive wages increase employee loyalty to the firm. Vodafone operates in different
countries word widely so currency exchange rates of countries affect productivity and
profitability of a firm in positive as well as a negative way (Luftman, et. al., 2017).
Social influences include cultural, heritage and social factors of any particular area in which
company operates including the attitude of the population of that particular area towards career
and health objectives and growth. The company should focus on the fact that it's business
operations should not affect cultural and heritage values of that particular area. Technological
influences include presenting services and goods of the company in targeted customer market in
different approaches to increase company profit. Telecom services provided by Vodafone should
be in accordance with customer needs and requirements.
Environmental influences include targeted population, availability of raw materials, the
sustainability of business operations and parameters of carbon footprints and other industrial
parameters affecting the environment. Legal influences include a standard of advertisement and
promotion, safety and health parameters set by the government, consumer laws and regulations,
safety standard of products, etc. Legal related issues include international trade policies also for
companies operating on the global level. Being an international firm Vodafone needs to consider

all international and global trade laws and regulations related to currency exchange rates of
different countries for its successful operation word widely. Vodafone is a consumer-centric firm
that believes in putting consumers at first place and develop different strategies to reach levels of
consumer satisfaction. New technical innovations in the related field also affect the performance
of the firm in the market. New innovations can have negative impacts on firm performance as it
reduces the use of traditional ideas of business in market (Testa, et. al., 2016).
Importance of external influences in the context of a company
Companies can manage effects caused by external and internal factors by pre-analyzing all
weaknesses, strengths, threats and opportunities of the firm. SWOT analysis helps companies to
identify their opportunities, strengths, threats, and weaknesses to perform in a competitive
market. The firm environment can be classified into direct interactive and indirect interactives.
Direct interactive includes components which affect firm performance in a direct way like the
entry of any new competitive firm in the market. Direct interactive include the owner of the firm,
management, clients, consumers, employees, competitors, and suppliers of services and goods of
the firm. Indirect interactive include demographic and socio-cultural components. Indirect
interactive affect the performance of the firm in an indirect way (Kim, et. al., 2016).
There are competitive factors also which affects the performance of the business firm.
Competitive factors include business imitators, differentiation of products and retail war in the
market. When some business got success in the market in a particular good or service than other
firms related to that product category started to provide other alternative and cheaper versions of
the same product. Companies operating in the same field compete with each other for gaining
more clients and for increasing the market value of the brand. This retail price war can help
consumers as they get a chance to purchase that item at a much lower price. Lowering of price
affects the performance of the firm in a competitive market. This method of competitive prices of
good helps the firm to attract more clients. The difference in goods offered by different firms
creates a competitive environment in the market related to product quality and price etc.
Competitive factors include other market-related terms like the design of a product, quality of
product, appearance, and packaging of the product, price of product and area in which it gets
offered (Plouffe, et. al., 2016).

For analyzing the effects of all these influences Vodafone should analyze issues related to the
market regarding goods and services of the firm, should identify accurate strategic methods and
should find market trends by monitoring of ongoing scenarios. For performing successful
operations in the global market Vodafone needs to analyze the demands of consumers, selecting
criteria of available services, quality of services according to consumer demand, strategies of
consumers for purchasing of goods and services, efficiency of firms to represent services in an
effective manner in market and should forecast performance of services in market by conducting
efficient market research of goods and services provided by firm. This analysis will help
Vodafone in decision making for increasing profit and performance of company in the market.

Task 2
The theme chosen for the Vodafone telecommunication company is the globalization and
guarded globalization. Globalization is having a strong impact on the telecommunication
company, most importantly on the market sector. Firstly it is leading to the changes in
technology and also it is leading to the overall growth of the telecommunication company.
Earlier the role of the government was to frame policies and regulations for the
telecommunication but with the emergence of globalization, now the government is playing an
active role in the telecommunication industry which is referred as the guarded globalization. In
the field of international telecommunication, there is the development of various strategies based
on the globalization which is allowing the Vodafone Company to enter into the new foreign
markets and build R&D by maintaining the production and supply of services within the various
countries (Drobyazko, et. al., 2019).
Globalization and Guarded Globalization
Globalization is basically a process with the motive to increase the business with the increased
services by maintaining the goods mobility, labor, capital, technology and information. This
entire process is basically dependent on the advanced technology that will be helpful in
improving the overall functions of the Company.
Guarded globalization is the process of globalization where the government is opening the
various opportunities for the business by protecting the interest of the companies and making
sure that company is choosing their countries and areas of working wisely. In this guarded
globalization the government is majorly focusing on the profit-making multi-national companies
(Araújo, et. al., 2018).
Globalization affecting policies and decision making for the Telecommunication Industry
(Vodafone)
Globalization is affecting the global economy severely because of the available competition in
the market. It has been observed that out of total profits of the Vodafone Company the majority
of the profits are coming from the foreign sales that involve the region of the Middle East and the
Asia Pacific. The CEO of the Vodafone Company residing in the UK stated that Vodafone
Company is the consumer-centric company which aims at providing quality services to the

customers by redesigning the entire company globally and taking care of the cultural diversities
of the country.
With the implementation of globalization, the consumers are now more aware of their decisions
by keeping in mind the ethical and legal concerns of the environment. It is also allowing to build
new policies and laws which will improve the entire business functions. Though, it is increasing
the global competition which Vodafone needs to survive by properly evaluating the policies
related to CSR and ethical rules (Öztürk and Marşap, 2018).
Due to globalization, the Vodafone Company is capable of acquisitions and mergers because the
company is now authorized to hire the workers as per the need and requirements of the company
and also the company can fire the employees who are not suitable enough to work in the
company. With the growing integration, the economy is also rising rapidly and the consequence
of globalization can be observed in the multiple dimensions of the organization. It is because of
globalization that interaction among the economies is now possible by keeping up the pace with
technology and culture of the different countries.
Decisions in every business organization are considered to be driving forces but with the
introduction of globalization managers of the company are now capable enough to make the
decisions on time and the decisions are now more improved. Also, the quality of the decisions is
also improved because now the decisions are taken keeping in mind the goals and objectives of
the company. With the growing competitiveness among the company, it is important to make
sure that quality of the services is well maintained and also the decisions taken at the manager
level should be taken keeping in mind the company or management. With the globalization the
managers of the company are now have a choice to use the wide knowledge related to the
business trends and use this knowledge to make the business decisions, though globalization has
also considered the issues of political and social dimensions because when the decisions are
made in any organization, it is important to consider the external factors also because these
factors have the strong influence on the growth of the organization. For example, if the Vodafone
company is making a decision to provide the free data services to any country it has to consider
the cultural and political factors of that country first before providing them with such services
because it will have a great impact on the overall country and if anything negative happens, then
all the blame will be on the decision makers of the company. So, overall it can be concluded that

globalization has a strong impact on the decision making and also the external factors get
affected with globalization. Globalization is having a strong influence on the overall policies of
the Vodafone Company and also the quality of the decision is also improved with the
globalization (Grous, 2016).
Effect of Globalization on Vodafone
Vodafone is one of the world’s largest telecommunication Company that is providing its network
services to more than 70 countries which is aiming to provide better networking services to the
users. Globalization is providing an opportunity to the company to handle the multiple risks
which involve various political and social risks related to the organization by providing ample of
opportunities to the customers as well as to the organizations globally. The telecommunication
which is working in multiple countries have to face the cultural barriers because the culture of
the countries varies but with the globalization new opportunities for the telecom industry are
developed and also the cost transactions are lessened up to certain level. With the introduction of
globalization, the market share of the company is also improved from 7.65% to 78.34%. The
introduction of the 4G network was not possible without globalization and also it has introduced
the various job opportunities by reducing the rate of unemployment. The effect of globalization
on Vodafone is detailed below:
 Globalization is basically comprising of the domestic economies that will lead to improving
the entire global system. It is helpful in maintaining the flow of revenue globally and making
sure that information related to technology is well maintained and also the same information
flows to the public among the different countries.
 It is helpful in raising the economic wellbeing as it is helpful in providing the proper
consumption of the services by the public.
 It is also helpful in the global growth of the company as the market is expanded and the
market of consumers is also expanded, so it is important to maintain the flow of goods and
services by making sure that product range is expanded with the time.
 With the implementation of globalization, the conception is also cleared to the authorities
that are helpful in building up the rapport with the governance by keeping in mind the
cultural as well economic growth of the company (Milanovic, 2016).

 It is also helpful in developing the awareness among the individuals by keeping in mind the
ethics and cultural practices because with the globalization the cultural diversities are also
required to be maintained for which it is important that standard of the life is also well
maintained.
 Globalization is allowing the Vodafone Company to maintain the growth of the dis-political
companies by providing them with the required assistance related to the development.
 The most important effect of globalization is in terms of technological advance as it is
allowing to develop the international data system by developing the system of telecom
infrastructure that will be allowing the movement of information with the help of encoder.
All these technologies are expanded with the help of internet.
 Keeping in mind the legalities, globalization is helpful in maintaining the legal efforts by
eliminating the illegalities related to the justice of the company.
 Globalization is making sure that the telecommunication industry is offering the varied
services to its customers by making sure that effective utilization of the resources is done
maintaining the level of services.
 Technical innovations are the madding the improvements in the overall telecommunication
sector by using wireless connections, internet, and satellite connection. This all is aiming to
meet the demands, needs, and requirements of the global customers.
 Telecom industries are basically dependent on technical innovations that involve using the
4G and 5G network and providing the consumers with the high-quality data services by
making sure that traffic over the internet is well maintained (Ghezzi, et.al., 2015).
 The marketing strategies are also improved with the implementation of globalization which
has helped the company to increase their profit levels and also maintaining the brand value of
the company.
 The marketing strategies involve driving the operational performance of the company,
developing better growth opportunities for the employees working in an organization,
delivering the expected services to the customers, etc.
Globalization impacting markets of telecommunication industry
Two major changes which globalization is bringing out in the telecom industry is fast growing
technological advances and the liberalization of the telecommunications. Globalization is
allowing the telecommunication companies to develop international strategies and these