Vodafone's Strategic Evaluation: BMP6002 - Competitive Advantage

This report provides a comprehensive strategic analysis of Vodafone, a leading British telecommunications company, evaluating its purpose, vision, mission, and objectives in setting strategic direction. It examines Vodafone's competitive advantages using the VRIO framework, assessing resources such as capital access, network capability, brand equity, and human resources. The report also analyzes the external environment in which Vodafone operates through a PESTLE analysis, considering political, economic, social, technological, and legal factors. Furthermore, it applies Porter's Five Forces model to understand industry attractiveness and reviews the organization's overall strategy, highlighting key factors influencing Vodafone's market position and long-term sustainability. This analysis aims to provide insights into Vodafone's strategic choices and their impact on the company's performance.

STRATEGIC MANAGEMENT

Table of Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Evaluate value of clear purpose, vision, mission objectives in setting strategic direction of chosen
organization.............................................................................................................................................3
Examine competitive advantage of company using VRIO analysis.........................................................4
Using Pestle analysis analyze external environment in which company operate.....................................7
Porter’s five forces model........................................................................................................................9
Review organizational strategy..............................................................................................................11
CONCLUSION.........................................................................................................................................11

INTRODUCTION
Strategic management refers to a process of setting goals, objectives in order to make
organization more competitive so that it will sustain in the market for long time period. It
provides all direction to business by developing policies and norms for attain objectives
effectively. Strategic management is an ongoing process that demonstrates bundle of decisions
that manager undertakes which is useful to decide result of firm performance (Ansoff and et. al.,
2018). To complete this project Vodafone Telecommunication Company is to be undertaken that
is a leading British multinational company headquartered in England, UK. Vodafone mainly
operates their services in Asia, Africa, Oceania, Europe etc. due to this they highly emphasis on
maintaining their market position in marketplace. This report includes value, purpose, vision,
mission of Vodafone that helps in setting strategic direction. Further it elucidates competitive
advantage using VRIO analysis and also demonstrate PESTLE analysis for evaluate external
environment. This also involves porters five forces model that is crucial to understand the
industry attractiveness so that company develops their strategy in effective and efficient manner.
MAIN BODY
Evaluate value of clear purpose, vision, mission objectives in setting strategic direction of
chosen organization
Company overview
Vodafone is a leading British telecommunication company since 1991. Its headquartered
in Newbury, Berkshire, England, UK and company serve their services on global platform. The
firm offer several products such as Mobile phone, Broadband, fixed line telephone, internet
television, IPTV, Internet of things, Digital television (Dzwigol, 2020). Therefore, in Vodafone
around 93000 employees are working in all over the world. Vodafone operate their networks in
around 22 countries and with partner network in 48 further countries. It is essential to understand
the organization vision, mission and values because it helps in setting strategic direction for
winning the high market position. Vodafone purpose, vision, mission etc. are presented below:
Clear purpose or Vision

The main purpose of Vodafone is to connect people of world for their better future and
for this company experts and scale gives unique opportunities to drive positive change in society.
The main vision of company is to built network to keep family, friends, government connected
that play a crucial role in economy running and functioning of sectors like healthcare and
education sectors (Barney and Hesterly, 2019).
Mission
Vodafone mission is to become a most loved brand by raising bar in delivering simple,
meaningful and delightful experience by using new age advanced technology. Be an
inspirational, agile organizational that challenge status quo by offering excellence customer
service.
Objectives in setting strategic direction of Vodafone
The main objective of Vodafone is to grow business by geographic expansion,
acquisition of new customers, increasing usage through innovation in technology, retention of
existing customers. On the basis of these objectives Vodafone prepares strategic direction that
helps in long term sustainability in marketplace. Become a converged communication
technology leader that enables the digital community. The company focused on achieving the
customer engagement and improves asset utilization.
Examine competitive advantage of company using VRIO analysis
VRIO analysis
VRIO framework was first proposed by Jay B Barney. Therefore this aspect evaluates the
relative importance of resources to business organization (Andreeva and et. al., 2019). It is a type
of resource focused strategic tool that is mainly used to develop sustainable competitive
advantage by effectively understands the role of resources within Vodafone. In context of
Vodafone, VRIO analysis is conducted by manager to assess the competitive advantage within
marketplace. It involves four aspects such as valuable, rare, imitable and organized. These
aspects are presented below in context of Vodafone:
 Capital Access- Vodafone, UK is highly able to get required capital from its parent
corporation in a very easy and effective manner. Therefore Vodafone enjoy free cash

flow around 6 billion pound that make easier for Vodafone to access their capital for
expanding their business operation in appropriate manner without facing any
complication related to financial resources.
 Network capability- The business firm will highly focused on much their capability of
building network that result the high speed in terms of indoor and outdoor coverage. In
this company have huge spectrum in the competitive market. Hence, its low frequency
network signals of 4G enable faster level of speed for the users of Vodafone.
 Brand Equity- In context of Vodafone, the company have spot 8th number in terms of
most valuable brand within the international level (Krutova and et. al., 2020). Hence the
valuation of an organization brand value comes up-to $45 billion. This helps in
generating high customer base so that company attains high profitable results within
marketplace.
Resources
and
capabilities
Valuable Rare Imitable Organised Level of
competitive
advantage
Access to
capital
YES - - - A realised
competitive
advantage for
company
Network
capability
YES YES - - Temporary
competitive
advantage
Brand
Equity
YES YES YES - Sustained
competitive
advantage
Human
resources
YES YES YES YES Sustained
competitive
advantage

From the above information Vodafone resources are elaborated below in terms of VRIO
four factors that are presented below:
Valuable
In context of Vodafone, UK all the above aspects are valuable for the business as it is
useful enough to develop brand image. These resources are useful for business as it helps in
attaining the objectives successfully. This also helps business in provide competition to rival firm
in market (Koloushani, Nasri and Rezaei, 2019). There capital access is highly valuable of
Vodafone because of good brand image they easily access capital and lead the competitive
situation in rival market. Due to high technological advancement done in Vodafone their
capability of developing network is also valuable. As many customers are loyal towards
company due to this they enjoy high brand equity in which Vodafone competitive parity. All
these capability are highly valuable to Vodafone in achieving the targets and it is done because
of valuable resource of company who are working for attracting customers and generating
profitable results.
Rare
These are those resources which are rare for organization and useful to beat the
competition in marketplace. In context of Vodafone Company rare resources are human
resources, brand equity and network capability that helps in developing the growth and market
share of an organization in business industry (Bogiday, 2019). Network capability of Vodafone
is rare that is useful to enjoy temporary competitive advantage within marketplace. Human
resources are essential resources of Vodafone who are working for company profitability and
present their ideas only for expansion of business. This represents rare resources of company.
Imitable
In context of Vodafone, several resources are useful and imitable that are effective to
gain competitive advantage at marketplace. Brand equity and human resources are highly
capable of Vodafone to attain quality results within organization. This also helps in attracting
large base of customers within marketplace. To develops brand equity effectively human
resource of company present their innovative ideas that is useful to attract loyal base of

customers. It is crucial for company to have an imitable type resources for generate high market
position and value for long term survival.
Organized
For Vodafone it is crucial that they organized their human resources in such a manner
within working atmosphere who work collaborate so that they generate more profitable results
within marketplace (Leiblein, Reuer and Zenger, 2018). For this manager of business ensures
that they offer motivation to employees so that they work effectively and attain targets
proficiently.
Using Pestle analysis analyze external environment in which company operate
PESTLE ANALYSIS
There are several factors from external environment that highly impact on the market
performance and strategy of business organization. In context of Vodafone that is a leading
telecommunication company in UK focus on gaining expansion, for this it is crucial to analyze
external factors because it influences the growth of business effectively and efficiently. PESTLE
analysis of Vodafone is demonstrated below:
 Political factor- As per current scenario, rules and regulations are to be proposed by
national government and political parties that impact on Vodafone services both in
negative and positive manner (Dzwigol and et. al., 2019). As Vodafone emphasis on
developing infrastructure and network in local and national areas for this they need
permission of government and apply for license to operate in ethical manner so that high
growth results are attain in market. Therefore in UK the regulatory process is good for
company and telecommunication market as it is useful to maintain the standard and
transparency but it also impact negatively on company cost and time for implementing
the ethical practices in telecommunication organization. Beside this UK government
emphasis on imposing the bid of spectrum for telecommunication that positively impacts
the monetary activities that affects positively on process of development of Vodafone.
 Economical factor- In this factor nation economic condition is to be demonstrated. For
the development of telecommunication market, economic stability of country is essential
for investment and improvement in market share of business entity (Shehadeh and

Mansour, 2019). The major aspect in economic factor that affect Vodafone is changes in
inflation rate, fee of new licensing and distribution of funds for developing and enhancing
market structure. Due to Brexit in UK major fluctuation in currency impacts the cost of
service of Vodafone because due to this cost of raw material is high. This present as a
huge challenge for organization. Therefore Vodafone emphasis on upgrade their services
and for this they need high amount of stability in economic condition of country. Hence,
major fluctuation in economy condition of UK impact on offerings of Vodafone as
operational, marketing, production cost because these could be influence with changes in
economic scenario. Therefore, it is essential for Vodafone to forecast economic condition
because it helps in developing strategies accordingly but due to high changes in global
economy negative impact is face by company for practicing activities in ethical manner.
 Social factor- This facto9r is very essential for organization in develop strategy for
success. Therefore UK population is highly educated and focused and having a good
sense of understanding about services that telecommunication organizations are offered
to them. In this Vodafone manager highly focused on this factor to gain competitive
advantage within marketplace. In this Vodafone mainly targets working class people or
businesses who are highly encouraged with the Vodafone services as it helps in using
culture and values in prominent manner. In this manager of Vodafone emphasis on
performing promotional activities by examines the values and beliefs of customers in UK
so that they develop their profitable results effectively. This strategy helps Vodafone to
attract the attention of huge base of customers and it helps in creating social appeal in
marketplace.
 Technological factor- It is an essential factor in today’s business world. Hence, there is
continuous improvement in technical up-gradation and tools that helps
telecommunication sector to maximize networks and services. In context of Vodafone,
adopting new technology for improving the existing infrastructure is major challenges
because of new laws related to radiations and utilizations of resources restrict the
activities of Vodafone in UK. As per the evaluation the modification in services of
Vodafone fostering positive impact on annual outcomes (Hiriyappa, 2018). Due to high
usage of technology in offering services to customers Vodafone charge high cost from

their customers but due to prominent services customers are loyal with company and it
impact positive on growth and development of an organization.
 Legal factor- It is another essential factor for organization as it is useful to understand
the laws and regulations that was imposed by government for saving their resources,
employees and customers rights. In context of Vodafone, company emphasis on pay good
salary to their employees so that they perform their task in proficient manner. This helps
in creating a prominent image in customers mind due to this their trust on organization is
build high that impact positively on the profits and revenues of business.
 Environmental factor- Company like Vodafone, understand their responsibility towards
the environment protection. It is highly crucial to attract and enhance the customer base
for longer time period on the global level. To achieve the environmental protection goals
company like Vodafone emphasis on three domains I.e. developing digital society, for
planet and inclusion of all (Al Wazzan, 2018). This helps in developing visibility of
organization within marketplace.
Porter’s five forces model
It is a type of holistic approach in strategic management that is useful for business
enterprise to take strategic decisions effectively and efficiently. Therefore to effectively
understand the effectiveness of business and external position of organization it is crucial for
business entity to examine the factors of porter’s five forces model. Porter’s five forces model
helps in recognizing the key external factors that impact operations and business of Vodafone.
The factors under porters five forces are demonstrated below so that company develops their
strategic decisions prominently that gives successful results within marketplace:
 Bargaining power of customers- In case of Telecommunication the buyers powers in
UK is very high because there are number of options in front of customers who offer
similar services to customers in optimum prices. For instance- In context of Vodafone,
company face major threat because buyers in telecommunication industry easily switch to
other company if they are not getting the services and cost as per their requirements and
need (Olshanskiy and et. al., 2019). Therefore to maintain the profits, sales and image of
brand in the marketplace Vodafone need to highly emphasis on their price and quality of

services along with offer additional benefits to customers so that they become loyal and
retain with the company for longer period of time.
 Bargaining power of suppliers- In Telecommunication industry, companies buys their
raw material or resources from number of suppliers because there are number of suppliers
present in marketplace. Hence, the power of suppliers within this industry is high due to
which Vodafone buy raw material at high cost that impact on their margins that they earn
within marketplace. This impact on the overall profitability of company because they
demand high cost for providing their support to maintain services like marketing,
customer care, network maintainers etc.
 Threat of substitutes- This is another aspect of this model that state when a new offering
fulfils the customer’s needs and requirements in different manner than profitability of
industry suffers. Thus in context of Vodafone, firm facing high amount of threat from
substitute products and services because there are number of organsiation who offers
same kind of products and services to customers at low cost. Therefore, at time of
comparing the quality of services are not match the standard of Vodafone but still they
affect the market position and profitability of business in adverse manner. At this time
top management of the company need to examine the external factors properly using
Pestle so that issues related to threat of substitute is to be overcome.
 Threat of new entrant- In context of Telecommunication industry the threat of new
entry is low because to enter into this industry company need high investments for
infrastructure development, licensing, management of services etc. hence, this aspect of
porters force model are in favor of Vodafone due to this they maintain profit share
effectively and efficiently (Varley and et. al., 2018). Therefore the frequent changes in
government regulation and technology factor create a big challenge for new entrant
within this industry but on the other hand Vodafone maintain their efficiency of services
at the unrivaled heights so that they enjoy long term success within telecommunication
industry.
 Intensive rivalry- Within telecommunication industry there are lots of organization who
are working for offering telecommunication products and services to customers on global
level same as Vodafone. Due to this, it is to be identified that Vodafone face major
rivalry in UK telecommunication market as in that market local companies are also offer

same services to customers at low cost along with best quality. For instance- organization
like BT gives the tough competition to Vodafone because they offer services and
products to users at low cost as compared to Vodafone. However it helps in beating the
market share of Vodafone in UK market. To overcome these issues Vodafone develops
their services using technological advancements and offers their services at optimum
price so that that easily gains competition in marketplace.
Review organizational strategy
From the preceding information it is to be reviewed that pestle analysis is very essential
for Vodafone to develop and recognize because, it provide the information regarding the external
factors so that company attain their objectives based on attracting huge of customers is to be
easily fulfilled. Besides this organization also emphasis on express the factors of vrio analysis
because it helps in recognizing the capability of resources that are present in marketplace so that
they take decisions in profitable manner (Heino and Tuunainen, 2018). To take decisions
promptly it is also useful to focus on porter five forces model because it represent industry
attractiveness on organization so that overall objectives of business is to be attained effectively
and efficiently. By reviewing the above models and concepts for Vodafone, market development
is best one of the best strategy because company has high amount of share and profits that helps
in long term survival. As Vodafone emphasis on attaining market expansion objectives for this
they operate their manual stores in several more countries by conducting proper research so that
customers in new market easily accept Vodafone and fiorm survival for longer period of time.
CONCLUSION
From the above report it is to be concluded that strategic management is a significant
term for an organization to make effective plans and policies for gaining competitive advantage
within marketplace. This report is very effective for business firm to understand the various
factors so that strategic decisions are developed prominently so that high profitable results is to
be enjoyed by organization in their long term survival. Therefore it helps in enhancing
knowledge about company along with their vision, mission, corporate strategy, values that is
useful to set strategic direction in prominent manner. To gain competitive advantage within
marketplace this report adopts the use of VRIO analysis that helps in demonstrating firm capable

resources that is crucial to enjoy sustainable results. This particular study elucidates porter’s five
forces model that is useful to attain strategic results appropriately and prominently.

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