Business Strategy Report: Vodafone's Strategic Management Plan

This report provides a comprehensive analysis of Vodafone's business strategy. It begins by examining the impact of the macro environment on Vodafone's decision-making and strategic choices, considering economic factors, regulations, demographics, social values, and technology. The report then delves into Vodafone's internal environment, assessing its strategic capabilities and resources using models like VRIO/VRIN and resource-based theory, including financial performance analysis. Furthermore, the report evaluates the competitiveness of the UK's telecommunications sector, exploring strategies to improve Vodafone's market position. Finally, it applies Bowman's strategy clock model to analyze Vodafone's strategic direction and concludes with a strategic management plan, referencing key concepts like the Ansoff growth matrix to illustrate market penetration, development, and diversification strategies. The report utilizes statistical data and financial ratios to assess Vodafone's performance.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and influence the macro environment has on organisation and its business
strategies......................................................................................................................................1
M1Critically analysing the macro environment and strategic management decisions...............4
TASK 2............................................................................................................................................4
P2 Assessment of the organisation’s internal environment and its capabilities..........................4
M2 Critically evaluating the strengths and weaknesses of organisation’s internal capabilities. 6
TASK 3............................................................................................................................................7
P3 Evaluate the competitiveness of UK’s telecommunications sector.......................................7
M3 Devising appropriate strategies to improve competitive edge and market position.............9
TASK 4............................................................................................................................................9
P4 Using Bowman’s strategy clock model, analyse the strategic direction................................9
M4 Producing a strategic management plan.............................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................12

INTRODUCTION
Business strategy is a effective tool that used to attain organisation's target and objectives
in appropriate manner. This is not requires to being the best but it is all about being unique. For a
company, it is require to be the best in market through their impactful strategy and quality
products. For a business organisation, planning procedure basically used to getting effective and
appropriate growth in target market (Ackermann and Eden, 2011). This procedure helps to
provide proper direction and guidelines to achieving future goals and objectives easily. This
project report is based on Vodafone which is a British Multinational telecommunication
company. This organisation was founded in the year of 1991 and now it provide products and
services in Asia, Africa, Europe and Oceania. Vodafone is ranked second in the number of
connections in world wide by their impactful strategic process. This report is represent impact
and influence of macro environment on business strategies as well as organisation’s internal
environment and its capabilities to serve effective services in market. At last it is describing
about competitiveness of UK’s telecommunications sector as well as Bowman’s strategy clock
model to analyse the strategic direction for firm.
TASK 1
P1 Impact and influence the macro environment has on organisation and its business strategies
For a business organisation, it is require to analyse impact of environmental factors that
influence in decision making process of firm. Vodafone is a multinational telecommunication
organisation that provide its effective services in worldwide, so for them it is require to analyse
macro environmental factors that can impact on decision making procedure of company. These
factors are classify into two different components as -
Company's macro environment – For Vodafone, it is require to analyse each and every
environmental factor that can impact on their decision making and operational procedure. For
this they needs to make impactful strategy to control its impact on business activities. These
macro environment can be -
 The economy at large – Vodafone is a multinational telecommunication organisation
that provide its products and services in several countries. So for them it is require to
analyse economic factors to invest their funds easily (David, 2011). Through this they
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can easily earn higher profitability and provides their own contribution in economy
growth as well.
 Legislation and regulations – Vodafone require to implement legal aspects in their
business organisation to easily expend their business structure in several countries. These
legislations and regulations are related to governmental norms and rules that can affect
organisational business activities easily.
 Population Demographic – For a business organisation, it is require to analyse
population demographic factors to supply their products at those areas. Vodafone needs
to make proper research on population demographic to analyse their needs and demand
easily. Through this they can easily supply their services in several areas.
 Society values and Lifestyle – Vodafone is a multinational telecommunication brand
that provide its effective services according to customer's demand and need. In this
process they needs to analyse society values and lifestyle of individual to provide them
appropriate services as per their demand and requirement. Through this they can easily
get higher higher growth and income as well (Eden and Ackermann, 2013).
 Technology – For a business organisation, it is require to adopt advance technology in
their business process to getting competitive advantages easily. In new era, each and
every individual wants to get technological products that helps to provide higher
satisfaction to them easily. For this Vodafone needs to implement advance technology in
their organisational services.
According to article valuation of Vodafone group by Thomas klauer, Vodafone requires
to identify impact of external environmental factors that can impact on decision making process
of firm. For this Vodafone requires to analyse different models and theories to reduce its
negative impact properly.
Company's Broader macro environment – Vodafone is a multinational telecommunication
organisation, so for them it is require to analyse each and every factors that related to Broader
macro environment to make strong strategy for them to control its impact easily. These factors
can be -
 Demographic Environment – Various companies use analysis of Demographic
Environment to identify their target market that helps to maximise sale and profitability
of organisation easily. In this Vodafone require to get proper information of
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Demographic Environment and different population or their need to provide networking
services in such areas (Gayle, Tewarie and White, 2011).
 Economic Environment – Vodafone is a largest telecommunication industry that make
their full concentration to provide networking services in several economies. Economic
environmental factors are related to employment, income and inflation rates as well. For
this Vodafone requires to analyse buying behaviour of their customers to make effective
changes in business strategies.
 Natural Environment - Vodafone is a telecommunication company, so for them it is
require to analyse natural environment that can impact on networking services of a
specific area. These factors can impact organisational procedure of firm.
 Technological Environment – Telecommunication sector landscape its structure very
rapidly with technological advancement. In this process Vodafone require to adopt digital
technology to effective competitive advantages easily.
 Political – legal Environment – These factors can influence when organisation extend
their business structure from one place to another, so for Vodafone it is require to
implement legal terms and government norms in business process to getting competitive
advantages easily (Ginter, 2018).
 Social – Cultural Environment – These factors are related to customer's demand and
impact of cultural factors on business procedure. For this Vodafone require to make
effective research on market to analyse new trends and changes to implement in their
business procedure. Through this they can easily provide higher satisfaction to target
consumers. All these activities are based on customers requirement as per the bases in
several changes in social factors.
Ansoff growth matrix – This is a strategic planning tool that used to make effectiveness in
organisation through appropriate plan and procedure as well. Through this, Vodafone can easily
make their framework to executing effective strategy in their business procedure. Organisation
can easily get effective ideas through its different elements such as -
 Market penetration – Vodafone is a multinational telecommunication organisation so
for the it is require to make strong strategy to introduce existing products in existing
market through new strategies. Vodafone always try to make effective and appropriate
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changes in their existing products (Goetsch and Davis, 2014). For example – Vodafone
penetrate in different ways in several countries as -
 Market development – This strategy is beneficial when firm wants to introduce existing
product and services in new market. In this, Vodafone requires to make effective
alteration in their services to build strong connection with new customers.
 Product development – Vodafone always introduce new products in existing market to
capture their customers eyes easily toward their services. These kind of strategy helps to
build strong relation with new and existing customer's.
 Diversification – This process requires a effective and impactful strategy when a
organisation wants to represent their new products and services in new market. Vodafone
always uses promotional strategy to implement this process successfully in their business
process.
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M1Critically analysing the macro environment and strategic management decisions
As per the words of Hair, Sarstedt and Ringle, (2012) for a business organisation, it is
require to make appropriate research to analyse impact of macro environment and strategic
management decisions on business structure. External factors directly impact on decision making
process of firm so for them it is require to make strong strategy to control and reduce its
negative impact easily. EXAMPLE for example company is going to expand their business in
different region then they need to consider changes in several macro elements while making
effective strategy. As a result they can easily reduce possibilities of losses or mistakes as well.
TASK 2
P2 Assessment of the organisation’s internal environment and its capabilities
Vodafone is a multinational telecommunication organisation that serve its quality
services in several countries. For them it is require to analyse their own strength and weaknesses
to make effective strategy to getting higher advantages easily. Fro this Vodafone requires to
identify some specific elements such as -
Strategic capability – This is a major component that refer to analyse business ability
that helps to getting higher competitive advantages easily. Vodafone require to make effective
and impactful strategy that helps to survive at market place for longer period of time in order to
attain their target objective and growth as well.
‘VRIO/VRIN’ model – This method is basically used to analyse organisation's resources and
value that helps to getting desired outcomes easily (Hill, Jones and Schilling, 2014). If an
organisation understand its resources then they can easily get higher competitive advantages in
target market. This model is basically consider four different elements such as -
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 Values – This elements are determine for various resources that requires to be obtain in
the target market. Through this, firm can easily analyse valuation of its resources that
require to use in future. For example Vodafone needs to implement effectiveness in their
resources and business process to getting higher benefits easily.
 Rareness – Vodafone require to understand valuation of their resources that are rare to
re-obtain in future. These kind of resource are very expensive and these are hard to use
by each company. Through this organisation can easily get higher competitive
advantages.
 Imitability – This element is stand for utilization of resources that help to achieve
organisational goals and objective easily. For example Manpower, capital, plant and
machinery and so on (iIreland and Hoskisson, 2012).
 Organisation – For a business organisation it is require to manage resource in
appropriate manner that helps to getting higher competitive advantages easily. Through
this firm can easily build their own value and goodwill in target market.
Resource and capability theory – According to this element it is assessed that resources
are seen as a most indispensable asset for entire corporate world because business activities are
run with the use of useful asset. For example; plant or machinery, labours and manpower as well.
For example -
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In this process organisation can use ratio analysis to getting proper analysis of
organisational performance from past few years to present ones. These ratios can be analyse to
obtain a proper information that quickly indicate financial performance of organisation by
several key areas. These kind of statement are based on historical data that used for accounting
inflation. These ratios are based on Liquidity ratio, Solvency ratio, profitability ratio, activity
ratio as well as cash flow ratio.
Financial status of Vodafone:- According to statistical data it has been identified that
Vodafone get succeeded in enhancing their sales performance by offering qualitative network
across the international boundaries. As a result they can easily enhance their profit ratio by
implementing various types of useful strategies such as; VRIO model, analysis of macro
environment, SWOT and so on (Hodgkinson and Healey, 2011).
Previous
close 210.1
Open 209.95
Bid 210.65 x 0
Ask 210.70 x 0
Day's range
209.55 -
211.55
52-week
range
190.10 -
239.65
Volume 15306175
Avg. volume 60129789
Market cap 56.233B
Beta 1.15
PE ratio
(TTM) N/A
EPS (TTM) -0.2
Earnings
date 15/05/18
Forward 0.13
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dividend &
yield (6.26%)
Ex-dividend
date 23/11/17
1y target est 2.37
Strength- For Vodafone, it is require to analyse their strength that helps to getting higher
growth and success easily.
 Powerful strategy – Vodafone is a largest multinational telecommunication organisation
that uses powerful strategy to make their own goodwill and market share easily. They
uses cost leadership and cost effectiveness method to capture customers eyes toward their
products and services easily.
 Strong advertising – To introducing new products and services in target market,
Vodafone always uses unique and attractive advertising tools that help draw customers
attention toward their services.
Weaknesses – Vodafone requires to analyse their weaknesses to make effective alteration easily.
These weakness can be -
 Internal operations problems – Vodafone always uses different kind of strategy to
making effective changes in their process but they forget to operate their internal values
in appropriate manner. These kind of factors can be negatively impact on its market
position.
 No clear strategy – Vodafone only use cost effective strategy but they do not focusing to
extend their business structure in several countries easily.
M2 Critically evaluating the strengths and weaknesses of organisation’s internal capabilities
According to Keupp, Palmié and Gassmann, (2012) Vodafone is a strong networking
organisation, so for them it is require to analyse strength and weaknesses of firm to build strong
strategy according to this. For this, they needs to analyse their internal factors that can be known
as its strength. Through this they can easily expend their business structure to getting higher
business advantages easily. This evaluation procedure aid effectiveness in organisational values
and business structure to getting higher business growth. For example –
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Strength - Vodafone adopt technological advancement in their business procedure for providing
4G speed networking to their target customers.
Weaknesses – Some of the legal issues and regulations from different countries reduce valuation
of Vodafone's intellectual properties.
TASK 3
P3 Evaluate the competitiveness of UK’s telecommunications sector
Vodafone is a strong networking organisation and for them it is require to analyse each
and every factors that related to telecommunications industry. Through this they can easily
analyse industry structure to getting higher profitability. For Vodafone it is require to make
effective changes in industry structure and make forecasting to getting effective profitability
easily. These factors are directly impact on market position of firm so for this it is require to
analyse industry overview through Porter's five force analysis as -
Rivalry firms – In a economy, several organisation are established that provide same
products and services in Stargate market. In this process, Vodafone require to analyse their major
competitors to make effective strategy to reduce its impact and getting effective competitive
advantages easily. Some rivalry firm such as EE limited make influence in organisational
activities by use reduction process of their products costing (Merkert and Hensher, 2011).
Bargaining power of Suppliers – Vodafone requires to analyse their supply chain to
extend their business in several countries easily. For them, Vodafone requires to make effective
strategy to address how can they easily increase cost of their products and services. An
organisation can easily depend upon its suppliers because they helps to increase market values
and sales of products. Marketing value of Vodafone is very strong in telecommunication industry
but for them it is require to make strong values of suppliers through cost leaders to getting
effective margin in competitive market.
Products Substitute – Company's substitute provide same products and services in target
market to place their own image easily. These can be strong threats of firm, so for them it is
require to make strong strategy to reduce its impact on organisational services. Vodafone faces
low threat because they always uses cost leadership methods in their business procedure. It is
hard for others to make appropriate or major substitute that provide higher satisfaction as per its
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affordable cost. Networking and products services of Vodafone is very strong so its hard for
others to make same strategy in target market (Molina, 2012).
Bargaining power of Buyer's – Vodafone always lead in target market because they
provide strong networking connection at a affordable price to their customers. To build their
strong image and goodwill in new market they always use effective strategy that helps to create
strong relation with buyers to enhance profitability of firm easily. Service uses of networking
industry are very strong they can easily minimise cost leaders prices so for this Vodafone
requires to improve their strategy to get average return to its closest competitors.
New entry – For a business organisation, it is require to analyse new entry of rivalry
organisations to make strong strategy for them. These new entry can be strong threat for
Vodafone, so for them its require to make effectiveness in their marketing procedure to getting
higher business advantage easily. Vodafone always uses cost effective or leadership strategy in
their business procedure, so new entrants always seems to be weak in front of them. For example
– Giffgaff can be a threat for Vodafone as it newly enter in UK market.
Vodafone is a deals in strong telecommunication sector and they requires to extend their
business structure on international level (Moutinho and Vargas, 2018). So for them it is require
to analyse national advantages to getting higher competitive advantages easily. Through this
they can easily provide their contribution to improve country's position and develop economy
growth easily. In this process, Porter's Diamond model provide their own contribution to getting
effective analysis of such factors as -
 Firm strategy, structure and rivalry – Vodafone is a strong telecommunication
industry that uses different strategy to make their own goodwill in market. This
organisation always serve cost effective services in their quality products, networking and
communication services of Vodafone is very strong and it is hard for others to beat this.
 Demand Condition – Vodafone always uses effective strategy to provide their effective
services in those areas where they analyse customer's has high demand. In this process it
is require to analyse what kinds of changes are require to increase market demand of
specific products to getting higher business advantages easily. Some high demanding
customers require effective alteration in organisation's products, so for this Vodafone
always make effective changes in their products and services to getting higher business
advantages easily.
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