Vodafone UK: PESTLE, SWOT & CAGE Analysis - Management Report

This management report provides a comprehensive analysis of Vodafone's business environment in the United Kingdom, exploring the political, economic, social, and technological factors that shape its international operations. It includes a company profile, a SWOT analysis highlighting the strengths, weaknesses, opportunities, and threats facing Vodafone, and a PEST analysis detailing the external factors impacting the company. The report also applies the CAGE distance framework, the OLI-model, and the Blue Ocean strategy to assess Vodafone's international strategies and competitive positioning. Furthermore, it discusses future trends affecting Vodafone and concludes with key insights into the company's challenges and opportunities in the global telecommunications market. Desklib offers a platform for students to access this report and many other solved assignments and past papers.

Running head: BUSINESS ENIRONMENT
Management Report on Vodafone
Name of the student:
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Table of Contents
Introduction:...............................................................................................................................2
Company profile:....................................................................................................................2
SWOT analysis:.........................................................................................................................3
Strength:.................................................................................................................................4
Weakness:...............................................................................................................................4
Opportunities:.........................................................................................................................5
Threat:.....................................................................................................................................5
PEST analysis:...........................................................................................................................6
Models:.....................................................................................................................................10
CAGE distance framework:.................................................................................................10
OLI-model:...........................................................................................................................10
Blue Ocean strategy:.............................................................................................................10
Future trends of Vodafone:......................................................................................................11
Conclusion:..............................................................................................................................11
Reference:................................................................................................................................13

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Introduction:
Telecommunication is one of the potential and promising businesses in United
Kingdom (Lu et al. 2014). In United Kingdom, all the communication trunks are digital in
nature and they used submarine communication cable in case of international business or
deals. However, there are many multi-national telecommunication companies in United
Kingdom of whom Vodafone is essential (Linge and Sutton 2016). As per the market
requirement, many telecommunication organisations have start up their businesses for
providing telephone and broadband services there. However, Vodafone had made its place in
the competitive telecommunication market in UK. The telecom companies have become one
of the leading business segmentation in UK (Ahmadi, Petrudi and Wang 2017). This
management report will identify the political, economical, social, and technological factors of
United Kingdom and the Vodafone Company as well that are assisting to shape the
international business environment. These factors help in presenting the opportunities and
threat to Vodafone in accordance with the CAGE framework, OLI paradigm and Blue Ocean
strategy to explore the company and to overcome the challenges faced by the company in the
international business.
Company profile:
Vodafone is a multinational telecommunication company that has the head quarter in
London (Vodafone.co.uk, 2018). Besides providing services in Britain, the operational area
of this company has been spread over the countries like Asia, Africa, Europe and Oceania.
Considering the global market of the company, it ranked second in the year 2016. The
company has been enlisted under the London Stock Exchange and the market capitalisation
of this company has been attached £52.5 billion according to the stock exchange report of
2016 (Rowe and King 2015). The evolutionary journey of Vodafone has been started in 1982

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and become one of the giant telecommunication industries in the history of Britain. The
global enterprise of Vodafone has been subsidiary owned by Vodafone Group. The integrated
service of this company is based on the three pillars like cloud computing, unified
communication and collaboration. The first 3G voice call has been introduced by the
company in the year 2001 in UK and the company is well-known for its creativity and
innovations. The company has launched a product for the blind people so that they can enjoy
the facilities of telecom services in the year 2003 and 3G data card has been propounded by
the company for the laptop users in 2005. SMS billing service has been introduced by the
company in 2011 and it takes over the cable and wireless worldwide in the year 2012.
Considering the creative mentality and stable nature, the company has positioned as a reputed
international company. The company holds a strong position in the domestic as well as
international market. More than 470 stores are operated in the domestic level of Vodafone.
Except this, the company has opened its outlets in the countries like Africa, Asia, Oceania
and Europe. The company has unveiled a global campaign in 2017 with the brand name “The
future is exciting....Ready?”
SWOT analysis:
Vodafone is the second largest telecom service provider in the world and it is
originated in UK. The company has its stores in more than twenty six countries and the
number of users of the company can be estimated up to 435 million for the year 2014.
According to this management report submitted by the Brand Finances in 2010, the company
has ranked seventh most valuable brand of the world. However, the company has certain
weak points too and there are several future threat present that can be posed as a great
dilemma for the company if not avoided. Therefore, a SWOT analysis can display the
strength, weaknesses, opportunities and threat of the company.

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Strength:
Vodafone has one of the most advanced technologies and network across the earth
and helped the company to provide unsurpassed quality in case of communication. Sufficient
process has been adopted by the company for wireless signal transmission and the average
speed of the network is 28.8 mbps. The customer service of the company is regarded as the
best service in the market of United Kingdom (Singh, Kimbahune and Singh 2017).
Retaining the position, the company has introduced a service named “Vodafone 360”. The
company has its partners in more than forty countries and has retained an equity interest with
them. Vodafone has held a prominent position in the domestic and international market as
well. This helps to pocket more profit for the company. The company has launched many
creative ideas and products for retaining its legendary position in the market. One of the most
strong point of the company is that there is no allegation for tax evasion against the company
and Vodafone pays billions of money as revenue very year and the company has
differentiated its services on regular basis and provide certain premium cost to its customer.
Weakness:
Despite of all the above mentioned strong points, the company has certain weak
points that need to be pointed out and avoided with highest priority by the company.
Vodafone needs to strengthen its base and core values from the aspect of international market
and needs to change its implementation strategies to attract more customers (Entee 2015). It
has been observed that the company is suffering from drop in case of brand valuation.
However, the company has failed to show sufficient performance in the market of Asia and
Europe and lost the position. Sluggish financial condition of Europe has also weakened the
market potentiality of the company. Further, the growing competitive market in the telecom
service has also reduced the prosperity of Vodafone.

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Opportunities:
An increasing rate of customers and emerging market potentiality of the company has
made an opportunity for the company to expand its business in the international market. The
company is well-known for its creativity and this can be a good opportunity for the company
to expand its market potentiality. The company has provided certain value added service like
mobile transfer service to its customers and it helps the financial institutions vehemently
(Sammut‐Bonnici and Galea 2015). By the year 2015, the process of mobile transfer has
become an important source of income for the company. The high speed 4G data
transmission of Vodafone can be a great opportunity for the company to regain its position in
the market of USA and Europe.
Threat:
The political, economic and legal system of UK has become less predictable in nature
and it has posed a serious for Vodafone. The adverse environment has made the investment
criteria of Vodafone much vulnerable (Klauer 2015). The emerging competition in the
telecommunication market has also posed a great threat for the company. The subsidies for
handset have been increased and it creates negative impacts on the revenue sector. Adverse
macroeconomic condition of the market is regarded as one of the threats for the company. A
sudden rise in the Over-the-top (OTT) service has also become a threat for Vodafone.

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PEST analysis:
It is important to understand how the Political, Economical, Social and Technological
approach governs or create impact on the opportunities and threat of Vodafone and in this
management report certain points have been mentioned to this effect:
Political factors  The stable government is the main
political strength for United
Kingdom.
 The proper application of rule of law
and right step taken by the
government in case to control over
the corruption and government
effectiveness has helped the country
to provide good governance to all.
 The licence regarding the telecom
services are strictly controlled by the
government of UK and it restricts a
company to get easy access in the
telecom market (Blake and Jandhyala
2016).
 Vodafone needs to follow the rules
and avoid all the challenges including
the competition.
 It is important to follow all the
communication-based rules for the
company and provide better service to

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customers.
Economic factors  Tremendous growth in the GDP has
been observed in UK that accelerates
the financial condition of UK.
 The percentage regarding the
consumer price has been increased at
the rate of 2%.
 Following the global trend, the
inflation rate in UK has also been
highly raised.
 An adverse situation has been
cropped up regarding the financial
slowdown and the rate of
unemployment has been increased
since 2008 in UK.
 Vodafone has lost many customers
for the recession and the level of
interest has been lost to new product
buying (Neokosmidis et al. 2017).
 A price war has been started between
the telecom companies after the
financial downsizing in domestic as
well as international market.
 Vodafone has to pay high rate of
expenditure for its new 3G and 4G

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technologies.
 The rate of tax for the company is
also huge and the market competition
is weakening the economical
framework of the company.
 Due to inflation, Vodafone has to
reduce the price of the products to
attract the customers.
Social factors  In UK, a lack has been observed in
case of the age distribution system
and it becomes difficult to maintain
proper standard of living.
 Balance in between the social welfare
system becomes very difficult and it
becomes necessary to make a reform.
 The level of education in UK is
prosperous and it helps the people to
take proper decision regarding the
products and they understand the
potentiality of a company.
 The life style is changing on
continuous base and therefore,
Vodafone needs to launch new
products in the market to capture its
position (Maiz, Arranz and Fdez. de

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Arroyabe 2016).
 Vodafone is requires to provide better
service with new innovations to the
customer.
 Vodafone needs to understand the
trends of every market as it is
different in nature. In the market of
Europe, having a mobile phone is a
fashion.
 It is obvious to state that the younger
members of the society are used
handset compared to the elders and it
is important to shift the demographics
from younger to elder users.
Technology factors  The technologies regarding
telecommunication in UK is
developed in nature and it uses fibre-
optic system and microwave radio
relays.
 Recently, UK has started to use
submarine cable for better
telecommunication service.
 The market of UK is gradually
increasing and therefore, it is
important for Vodafone to invent new

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technologies to be established in
market.
 Vodafone is required to upgrade its
products and its system compare to
other companies (Loudon 2016).
 The GPS services of Vodafone are
based on high profile technology and
the navigation system of the company
is customer oriented.
 Technological advancement helps the
company to deal with the increasing
competitiveness.
 The recycling programme of
Vodafone is also based on technical
quality.
Models:
CAGE distance framework:
The term CAGE is an abbreviated form of cultural, administrative, geographic and
economic differences among the different countries which is very important for a company to
out frame the international strategies. The theory was propounded by Pankaj Ghemawat, a
professor of the University in Spain. A company has to understand the different ethnic and
social concept of international countries and should have to chalk out the strategies based on
the facts (Neelakandan et al. 2015). Political hostility is also an important factor for the
company (Vodafone). Economic distance is playing an important role for any business

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segmentation and therefore, Vodafone is required to plan in a proper manner for the
international market orientation.
OLI-model:
OLI-model or electric paradigm is an economical theory and it was published for the
first time in 1979 by John H. Dunning. It provides three-tiered framework to a company to
get direct access to foreign investment. Those three paradigms are ownership advantage,
location advantage and internalization advantages (Cantwell 2015). It helps to determine the
possible organisational strategies for expand the business in the international market. The
most important factor of these advantages is their fixed nature. Further, the ownership rights
are helping a company to concentrate over the issues like copyright, patent or trademark
rights. These help a company to strengthen its rights in the global market.
Blue Ocean strategy:
It is a well-known marketing strategy which was introduced in the year 2005 by W.
Chan Kim (Strategy 2015). According to him, a company can get success in the international
market by creating an uncontested market space (Kim and Mauborgne 2017). According to
the supporters of the theory, the process will help the company to increase its value and assist
to deal with the emerging demand. The strategy will help to understand the value of the terms
of product and standard of the services. Therefore, it can be stated that all these strategies are
very important for international market expansion and Vodafone needs to follow related rules
regarding the same.
Future trends of Vodafone:
According to Adu Danso (2016), Vodafone has started its market orientation process
by catching the attention of the customers and for the purpose, the company has started to
retain a positive relationship within the market. The company has planned certain steps for