Vodafone: Analysis of Macro Environment and Strategic Planning Report

This report provides a comprehensive analysis of Vodafone's business strategy. It begins with an introduction to business strategy and its importance for organizational goals. Task 1 analyzes the impact of the macro environment using PESTLE and Ansoff's growth matrix, examining political, economic, social, technological, legal, and environmental factors, as well as market penetration, development, product development, and diversification strategies. Task 2 focuses on Vodafone's internal environment and capabilities, applying the VRIO/VRIN model to assess its resources and competitive advantages, including value, rareness, imitability, and organizational aspects. The report then applies Porter's Five Forces model to evaluate the competitive forces within the market and concludes with a discussion of strategic planning theories and models relevant to Vodafone. The report highlights Vodafone's strengths, weaknesses, and strategic positioning within the telecommunications industry.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse impact and influence of macro environment on an organisation and its strategies. 1
TASK 2............................................................................................................................................5
P2 Analyse internal environment and capabilities of Vodafone............................................5
TASK 3............................................................................................................................................7
P3 Apply Porter's Five Forces model evaluate competitive forces of market........................7
TASK 4..........................................................................................................................................10
P4 Apply theories and models to interpret and device strategic planning...........................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategies are formulated by management for accomplishing organisational
goals and vision. It is a long term planning by which objectives are prioritize for proper
utilisation of resources. This help senior to direct and influence staff members to perform tasks in
effective manner. Employees require having information about their duties for completing tasks
and targets within time frame. Along this, administration frame plan for establishing competitive
advantage for positioning enterprise superior than rivals. Present report is based on Vodafone
which is a telecommunication firm (Acquaah, 2013). It is a famous mobile network operator in
United Kingdom which provide connectivity service to people. This assignment specifies impact
and influence of macro environment on firm and its strategies. Besides this, analyse of internal
environment and capabilities of organisation is stated. In addition to this, application of Porter's
five forces model for examining competitive forces of market is discussed. Furthermore,
different theories, concepts and models to interpret and device strategic planning for company is
mentioned in the report.
TASK 1
P1 Analyse impact and influence of macro environment on an organisation and its strategies
Macro environment includes components which effect on performance and behaviour of
an organisation. It is necessary that management of Vodafone have complete knowledge about
outside components for making changes in system and strategies. This helps seniors to ascertain
threats and opportunities for enhancing functionality of firm. Along this, they provide strategic
direction to team members to make them function properly. PESTLE and Ansoff's growth matrix
are two frameworks for analysing macro environment factors which is described below:
PESTLE model for environmental analysis: PESTLE is tool which is used by
management to gain insights about external components. Government, economic conditions,
public, technology and environment are elements which directly or indirectly influence on
business and its operations (Astrachan, 2010). It is essential that strategies and policies are
formulated in respect to outside environment. This aid executive of Vodafone to design system
effectively by analysing their impact which is stated beneath: Political factor: This is force which determine that rules and legislation are formulated
by government for regulating organisation. There are various policies in respect to
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taxation and licensing which are framed by authorities for limiting firm's operations. In
United Kingdom, after Brexit there is changes in political conditions. This aspect benefits
Vodafone to enhance their business by short time period. For this, seniors require
implementation of tools and team which help them to provide network and connectivity
services properly. They had even formulated policies through which system and business
operations are conducted legally. Seniors of Vodafone had made decision in respect to
formation of network infrastructure which is good and makes business activities
effective. Economic factor: Interest rate, growth, inflation, exchange rate are different components
which vary from other one nation to another. These are aspects which depend on
economic conditions of country. Fluctuation in currency and gross domestic product
(GDP) affect on sales and revenue of Vodafone. It is multinational firm in which changes
in exchange rate impact on their operations (Auzair, 2011). In UK, there is inflation
situation which help management to have good customer base for enhancing their
profitability. Besides this, economic crisis is another problem which require that
administration frame strategies and re-formulate them in according to uncertainties of
market. Social factor: This element define that organisation help in growth and development of
community. Firm increases employment opportunity for supporting people to earn money
for their living standards. Besides this, they provide products and services for fulfilment
of needs and demands of public. Vodafone is a telecommunication sector firm which
provides network connectivity to people. They provide clients to communicate and
maintain connection with others through phone call, message and other interaction
techniques. Technological factor: This component state that management implement tools and
equipments for utilisation of resources in efficient manner. Along this, advanced
technologies helps firm to deliver quality items and services to customers. In this regard,
senior of Vodafone require to have skilled and competent people which have capability to
work with technical instruments. With involvement of social media, there is enhancement
in business which aid management to increase market reach (Azar, 2011). But with
disruption in digital technology affect on operations of Vodafone. For this, management
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of Vodafone uses devices with latest trends of technologies. This help them to provide
quality network facility to clients. Legal factor: This component comprises act and laws which are formulated by
government for protecting rights of employees. Discrimination, health and safety,
minimum working hours and wages, etc are various policies which are created by
authorities. It is necessary that management of Vodafone consider them for providing
appropriate working conditions and facilities to workers. If staff members didn't get fair
treatment and work in respect to their capabilities. This result into increment in labour
turnover and absent rate which affect on sales of company. For this, management make
decision in respect to legal binding to employees for sustaining them for longer time.
 Environmental factor: This element define that firms require to use natural resources
properly for sustainability of market conditions. It is essential that management design
system and system whose aim is to protect and enhance community. Vodafone is
telecommunication firm which provide network connectivity to people. For this, senior
uses techniques which are eco- friendly. (Barberá and et. al., 2012). Vodafone conduct
business activities ethically which people require to be present in brand used by them.
For this, management conduct corporate social responsibility for enhancement of
community.
Ansoff's growth vector matrix to analyse strategic positioning of organisation: This
model was developed by H. Ignor Ansoff. It is a strategic tool of planning by which framework
is provided to superior for making growth in future. Senior of Vodafone have tactics in respect to
product and market for enhancement of their business. Henceforth, these are four strategies
which are part of grid are described beneath:
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(Source: Ansoff's Growth Vector Matrix, 2018) Market penetration: This strategy is adopted by firm to make growth for enhancing their
market share in present marketplace with existing items. It is tactic which is used by
management of Vodafone to increase their outlets in same city or region. This help them
to provide services to people easily from nearer branches. Market development: It is another strategy which is used by enterprise to target new
market with their current products and services. This helps management of Vodafone to
increase market reach and customer base for enhancing sales volume. For this, social
media and online tool is used through which senior enhances number of clients and
revenue. Product development: This strategy define that firms makes development in offerings
that create new and innovative items for making growth. For this, demands and
preferences of people are find by management for enhancing business in present market.
Vodafone provide telecommunication service that is network connection to people. With
technological advancements, management is able to provide services in new and unique
manner (Bharadwaj and et. al., 2013).
 Product diversification: This strategy is used by firms to expand business into new
market for improving sales volume and revenue. New and innovative products and
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Illustration 1: Ansoff Matrix

services are provided for increasing customers. In Vodafone, firm provide distinct plan
and package to people for making them shift from other network connection.
Therefore, from above market development is strategy which is used by Vodafone to
increase their market reach and customer base. This help management to make growth in new
markets for enhancing clients.
TASK 2
P2 Analyse internal environment and capabilities of Vodafone
Management even require to have knowledge about system abilities for execution of
business operations effectively. It is necessary that strengths and weaknesses are acknowledged
by seniors for utilisation of market opportunities. Besides this, they require that problems and
issues are reduced for conduction of activities systematically. For this, VRIO/ VRIN model is
used by administration of Vodafone for analysing internal capabilities. It is essential that
company have sufficient resources, for conduction of business operations in according to
demands and requirements of people (Burlton, 2010). This help management to compete with
rival firms for enhancing position and image in market.
VRIO/ VRIN model: This theory was proposed by Jay B. Barney for evaluating
organisation resources. VRIO analysis is framework through which examination of resource of
firm and competitive advantage is analyse by senior. Value, rareness, imitability and
organisation dimensions of this tactic. This tool is used by management of Vodafone to gain
information about micro environment elements. Human resource, material, funds are intrinsic
components which are essential for delivery of items and services to people. These are elements
which help management of Vodafone to conduct business activities properly. Thus, these are
dimensions of VRIO which are stated below: Value: This element define that firm require to have resources which are efficient to
support in overcoming threats and weaknesses. Establishment of differentiation and
reduction in rates of items are tactics which are used by firm to give value to clients. It is
necessary that resources helps management to function as strength through which buyers
get value. Vodafone is telecommunication firm which consists economies of scale that is
large infrastructure. This benefit firm to provide quality services to clients for enhancing
market position. Besides this, company offers services at reasonable rates through which
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customers get value. This influence them to sustain with Vodafone for longer time
(Campbell, Edgar and Stonehouse, 2011). Rareness: It is tactic which state about limitedness of resources in respect to organisation
functionality. Management require that natural resources are utilise properly for which
they need to use advanced techniques and equipments. Vodafone is multinational firm
which have created a strong brand image in United Kingdom. Company have global
presence which is rare, as other telecommunication firm have less market reach. They
provide clients highly specialised stuff that is unified mobile services to them. Imitability: This tactic defines about problem which is faced by senior in respect to copy
or re-create resources. It is essential that administration design system and use resources
in such manner that rival firm are not able to copy it. Vodafone has spend large amount in
network which help them to provide fast internet speed to clients. For this, excellent
indoor and outdoor coverage is provided which is not easily imitable by competitors.
Technological abilities helps Vodafone to move ahead than rivals by establishing
competitive advantage.
 Organisation: It refer to arrangement which specify plan through which management is
able to utilise resources properly. Vodafone is telecommunication firm which have many
rival firms that are EE, BT, Giff- gaff, O2, Virgin and many others. Company provides
good network to maintain their clients and is giving good competition to other
enterprises.
With VRIO framework, management of Vodafone gain information about functionality
of system. Strengths and weaknesses are two aspects which help them to manage business for
execution of operations effectively.
Strengths: Massive market coverage: Vodafone is popular and leading telecommunication firm
which have large market reach. They are conducting business in about 25 nations which
define that their coverage is wide. Company have large network and distribution through
which network facility is provided to wide number of people. Revenue generated: Vodafone have large customer base and market which help seniors
to make profit in good amount. Company provide good connectivity that result into
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sustaining of clients for longer time. This benefit management to enhance their ranking
around the globe, thereby work as top performers (Chang and Chuang, 2011). Premium cost: In Vodafone, seniors keep distinguishing their services in regular manner
which other operators of telecom have not done. Company communication and marketing
services are superior than others that result into user pride about their connection.
Different packages and offers are designed that are distinct from competitors which
benefit company to sustain their profit margin.
Weaknesses: Reducing valuation of brand: In starting phase, Vodafone subscriber base and brand
image was superior. There is problems and de-fall in network connectivity which affect
on quality of services provided to clients. This result into decrement in market reputation
and image.
 Dropping in number of subscriber: Telecommunication sector have large number of
firms that is BT, Virgin, O2 and many other. This affect on sales volume and profitability
of Vodafone. It is essential that brand value is strengthen in respect to formulation of
strategies and value through which more clients are gained (Cinquini and Tenucci, 2010).
TASK 3
P3 Apply Porter's Five Forces model evaluate competitive forces of market
Administration require to have information about rival firms for designing system and
strategies through which they are able to position superior than others. Vodafone is
telecommunication firm which have large rival companies that are BT, Virgin, O2, etc. It is
necessary that management frame policies and strategies through which employees are directed
to function effectively. Besides this, they even require to use tools and model for analysing
competitiveness in that sector. Vodafone provide good connectivity and network to people aid
seniors in establishment of competitive edge. Thus, company have good customer base for
enhancing sales and profitability.
Porter's Five Forces model: This is framework framed by Michael Porter for assessing
competition of a firm. Competitor, customer and supplier are components which comprises
essential part in an organisation. This tool define five forces which are present in every sector
and aid management to ascertain information about competitive intensity. Thus, these are five
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tactics which benefits firm to enhance profitability by improving attractiveness of business are
stated below:
(Source: Michael Porter's Five Forces Framework, 2016) Bargaining power to buyers: This tactic define that sales and revenue of enterprise
depend on public. Demands and preferences of people determine management decisions
in respect to rates of products. Telecommunication is sector in which bargaining power of
customers is high. This define that Vodafone have cut throat competition for which
distinct items and services are provided to people. With strong power of client’s
company have to lower down rates in respect to competitors. This result into adequate
revenue in compared with other telecom firm (Elliot, 2011). Bargaining power to suppliers: This aspect state that organisation require material and
equipments for delivery of items and services in market. In this, management need to
maintain relations with suppliers which help them to order things in according to
demands and need of people. This aid them to utilise funds by reducing inventory cost
that is storage and transportation. Suppliers of Vodafone consists high power of
bargaining. This is because of large margins in respect to rival firms that are BT, O2,
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Illustration 2: Michael Porter's Five Forces Framework

Virgin. They are market leader which have large market share that benefit firm to easily
make increments in prices. Threat of new entrants: This tactic define that new firms enter into market which are
profitable and exit in loss situation. This result into pressure and impact on sales that is
affected due to increase in competitors. For this, government require to formulate policies
of licensing for resisting entry and exit of firms. Telecommunication industry comprises
large fees in respect to registration which impact on their entry. Expenses of
establishment of network infrastructure is high and rapid improvement in technology are
issues which stop new firms. This benefits Vodafone to maintain their effectiveness of
services and customers. Threat of substitute products: This aspect define that there are items and services which
are similar in nature and fulfil same requirement of people. This define that buyers may
shift from one product to another in respect to prices, features and other attributes. For
this, management require to design items and provide quality services to customers.
Vodafone threat are CDMA services and landlines which are enhancing at fast rate.
Besides this, broadband services are also increasing which help people to do video
conference, email and social networking. Vodafone have good customer base that benefit
firm to sustain their prices (Ghezzi, 2013).
 Competition rivalry: Every industry have large number of firms which affect on their
sales volume and profitability. Vodafone have tough competition that are BT, O2, Virgin
that posses high rivalry in respect to service prices. It is essential that services plan and
packages are designed effective for providing services at competitive rates. This helps
company to position itself superior than rival firms to attract large number of customers.
Balance scorecard: Management require to measure and gain information about
performance of firm. This help them to make decisions in respect to formulate strategies and
policies for enhancing functionality of staff members. Balance scorecard is one of technique of
performance measurement which is used by administration of Vodafone to assess working of
employees. This tactic helps them to provide monetary and non- monetary incentives to
subordinates in respect to their work and outcomes. System and organisational structure are
complex which effect on business operations. Besides this, changes in external components that
impact at time of enlargement of business internationally by either joint venture, partnership or
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other tool. For this, management require to sustain their employees for longer time for
conduction of activities effectively. This benefit them to establish competitive advantage in
respect to rival telecom firms. Thus, quality services are provided through which seniors
maintain brand image and market position.
TASK 4
P4 Apply theories and models to interpret and device strategic planning
Porter's generic strategy model is used by management to conduct strategic plan in
respect to directing team members. Besides this, Ansoff matrix, PESTLE and Porter's five forces
tool help seniors of Vodafone to frame appropriate strategic management plan.
Porter's Generic Strategy: Porter's generic strategies was given by Michael Porter in
1985. Porter's generic strategies explains how the company adopt the competitive advantage with
the chosen market. There are mainly four strategies which every organisation follows. The
company pursue those competitive advantages either by choosing low cost with its competitors
or by specialising its product with high price. Similarly, Vodafone also chose scope in respect of
products to specific market or large segmented market. For choosing appropriate strategy
company should know its strength and competencies. Here, the given company is Vodafone
which also follows the Porter generic strategies (Jocovic and et. al., 2014). For an example:
Vodafone is looking forward to expand its business among new places. They will use Porter's
Generic strategy model to develop their strategies which will aid in expansion in much effective
and efficient manner.
Cost Leadership Strategy
Cost leadership strategy means to produce at low cost in order to capture the maximum
share from the market which depends upon the structure of company. In this the demand is more
with low price. It includes proprietary technology, economies of scale, raw materials. The main
motto is to be the low cost producer firm in the market. It also helps in saving the cost in terms of
materials and labour. Vodafone also found the advantages of cost saving and capture the whole
market from the competitors.
Differentiation Strategy
In differentiation strategy, company produces unique products from the competition.
While following such strategy firm should be aware about its costumers wants and needs and
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