Business Strategy Analysis: Vodafone's External and Internal Factors

This report offers a detailed analysis of Vodafone's business strategy, examining its external environment through PESTEL analysis, which includes political, economic, social, technological, environmental, and legal factors. It also explores Vodafone's internal environment and capabilities, using the VRIO model to evaluate strategic capabilities and a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The report further analyzes the telecommunication sector using Porter's five forces model to assess the competitive landscape in the UK. Additionally, it delves into understanding and interpreting Vodafone's strategic direction, employing Bowman's strategy clock model. The report concludes with an overview of Vodafone's strategic positioning and recommendations for future development.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ..........................................................................................................................................1
P.1 External environment............................................................................................................1
1)PESTEL analysis:....................................................................................................................1
2) Ans off's growth matrix to monitor strategic position of firm...............................................2
TASK 2 ...........................................................................................................................................3
P.2Internal environment and capabilities of firm .......................................................................3
1)Strategic capability..................................................................................................................3
2)Use of VRIO model to evaluate strategic capabilities by firm................................................3
2) Identification of strengths and weakness of firm:...................................................................4
TASK 3 ...........................................................................................................................................5
P.3 Analysing telecommunication sector....................................................................................5
1)Porters five forces model to monitor the competition level in U.K.........................................5
TASK 4 ...........................................................................................................................................6
P.4 Understanding and interpreting strategic direction ..............................................................6
Bowman's strategy clock model:.................................................................................................6
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business strategy is very essential in every business. Through creating of strategies and
policies any business can run successfully and smoothly. Thus it can create different plans so that
it can run its all functions properly and efficiently. Thus as a result firm can easily run smoothly
and successfully (Aharoni, 2015). Thus it can easily attract and satisfy many users in minimum
time. Thus company can earn more revenues and can easily expand their operations. Report
explains about the Vodafone company which is telecommunication firm. It was found in U.K. It
provides various mobile services to all customers. Assignment describes about the external
environment and their influence of macro environments on company. It further explains about
the external environment and organizational capabilities. It explains about the evaluating the
telecommunication sector and the understanding and interpreting the strategic direction.
TASK 1
P.1 External environment
1)PESTEL analysis:
It is a process which includes the political, economical, social, technological,
environmental and legal factors. They can affect the company in positive and negative manner.
PESTEL analysis of Vodafone are:
Political factors: There are various issues and problems in Europe. Due to this issues
and disputes it has a negative impact on the Vodafone. Thus as a result they cannot easily run
their operations and activities in a smooth manner. Thus they cannot operate their task in proper
manner.
Economic crises: Country's GDP is very high so thus many people can easily purchase
the products and services from Vodafone. Hence firm can easily earn more profits and can easily
increase the market share. Thais gives a positive impact on the company. Due to many economic
crises company suffers a lot from these situations.
Social factors: Company creates and delivers services according to needs and wants of
local people. It is a European country but then only it can fulfil the needs of local people so that
they can increase the satisfaction level of all people. This also helps the firm to enhance the
profits (Amran, and et. al., 2016).
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Technological factors: Company has to adopt the latest and recent technology so that
they can produce good quality of products. Thus as a result they can easily fulfil all needs and
wants of all people. Thus as a result they can easily fulfil all needs and wants (Brewster, 2017).
Legal factors: Various legal problems and issues are there through which they cannot
fulfil all needs and wants of all people. Many people left the job and they can work in another
company and due to this they cannot increase their satisfaction level. Govt has to make legal
rules so that they can maintain the market share.
Environmental factors: Due to the globalization company cannot create products in a
better manner. Form can perform social activities so that they can maintain god image in minds
of all users. Thus as a result they can earn more revenues and can enhance the market share.
Hence it leads to increase in reputation among all users.
2) Ans off's growth matrix to monitor strategic position of firm
Strategic position is the evaluation of future condition of the company by monitoring the
internal as well as the external factors. Through this company can easily identify the needs and
wants of all users. Thus they can easily maintain unique position in the firm. Through creating
efficient strategies so that they can enhance the market share. Through this they can create
distinct policies and then it can directly enhance the profits. So this tools is very crucial so that
they can create different polices and plans. 4 strategies which are included in Ansoff's matrix are:
Market penetration: In this process company can directly sell different goods to various
users. Thus they can directly increase their profits and they can enhance the market share. It sells
goods to potential consumers. Through this they can directly expand their business and can
increase their reputation among all users in the market as well as in the industry.
Market development: In this process company can easily sell various existing goods to
various users. Thus they can easily increase the profits and they can easily enhance the market
share. Through this method they can attract many users and Vodafone can easily increase their
operations and task in many countries.
Product development: Vodafone can create new products through use of latest and
recent technologies in the market (Buckley and Ghauri, 2015). Thus as a result they can easily
increase their revenues. The company has perform a strategic alliance with another firm so that
they can directly use the 5G technology.
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Diversification: In this company has created new product and it is targetted to the new
market (Chen and Jermias, 2014). Thus they can easily expand and diversify the activities and
task in the business. Through this they can easily diversify and expand their activities into many
countries. Thus they can enhance the market share.
TASK 2
P.2Internal environment and capabilities of firm
1)Strategic capability
It is the process through which firm can create different strategies and policies so that it
can maintain the sustainability and can increase the market share. There are different factors
which are considered by the company which includes business assets, business position so that
they can create effective and efficient strategies. Through this they can easily give strong
competition to other firms and can maintain unique position in the market as well among all
users. Through execution of the proper polices and plans company can increase the level of zeal
and motivation among all employees and they can perform better.
Vodafone can create different polices and plans so that they can create various strategies
and polices and thus they can increase the satisfaction level among all users. Changes are there in
a frequent manner. They also use latest and recent technologies so that they can create various
products in a unique manner. Thus as a result they can easily operate in unique and efficient
manner. Thus they can easily enhance their reputation in the country and in front of all users.
2)Use of VRIO model to evaluate strategic capabilities by firm
VRIO is an effective tool which can directly enhance their operations in a unique manner.
It helps in utilisation of all human resources in effective manner. Through this all goal and
objectives can be achieved. VRIO used in Vodafone are:
Valuable: Vodafone uses a different strategy so that it can increase the value of company
in minimum time. They have created a effective strategy so that it can easily diversify all
operations and activities in less time. They also perform optimum utilization of resources in
efficient manner. Thus it can create different strategies so that they can easily reduce the costs in
all operations (Eaton and Kilby, 2015) .
Rare: It includes the processes and resources so that they can easily fulfil all needs and
wants of all people. Thus as a result company can deliver effective resources and goods to all
users. So thus Vodafone can easily give training according to needs of all staff members.
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Through this it can develop the unique skills and technical knowledge among all users (Jocovic,
and et. al., 2014).
Imitability: It means the process in which company can create that process and
technologies which cannot easily copied by the other company. Thus as a result they can deliver
different telecommunication services to all other firms so that they cannot easily copied by
another firm. Its services are also very expensive also.
Organization: They have a simple organizational structure in which they do not make
differences among their factors such as religion, caste and creed etc. Thus as a result they can
maintain good position among all users. Thus they can directly increase the satisfaction level of
all users.
2) Identification of strengths and weakness of firm:
SWOT analysis is the process and technique in which company can easily identify their
strength and improve the weakness. Thus they can easily increases the market share by
converting their weakness into the strength. Management of Vodafone can use this effective tool
so that they can capture different opportunities and can maintain strong position in the market.
SWOT of Vodafone are:
Strengths:
Extensive market coverage: Vodafone is the largest telecommunication sector. Thus as
a result they can easily maintain good position in the market. Company is operating in
approximately around more than 30 countries Thus it can easily earn more revenues.
Weakness:
Vodafone mainly depends on the U.K. Market and due to this only it can earn more
revenues. Thus they cannot maintain unique position in the market. Hence they cannot maintain
strong position in the market. Thus it is also a weakness for form which it has to improve.
Opportunities:
5G growth of market and connectivity: Due to this high and advanced technology it
can easily increase their market share and thus it can easily increase their GDP of the country by
$3 trillion. So due to this it can easily increase the market share and can gain more users in less
time.
Threats:
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Competition: There is huge competition from other telecommunication companies
(Johnson, 2016). Thus as a result Vodafone has to create effective and efficient strategies so
then only it can maintain unique position in the market as well among all users.
TASK 3
P.3 Analysing telecommunication sector
1)Porters five forces model to monitor the competition level in U.K.
In today's world telecommunication sector is evaluating of more profits. Thus as a result
they can easily maintain high position in the market as well in the industry (Kellermanns,
Dibrell and Cruz, 2014). It gives huge competition to other firms and thus it can is a huge and
high value brand. In this case Delloite has said that mostly people who are aged between 16 to 24
years use the smart phone. Thus as a result they can easily maintain good and unique position in
the market. BNO 74% of people are using the smart phone. Thus as a result they can easily
increase the satisfaction level in the country. It scope is also very large in U.K. Thus as a result
they have to create efficient policies. There are various competitors who are available in the
market such as O2, EE etc. which also perform the sane services to all people. Through use of
Porter model it can evaluate the porters five forces model through which company can easily
monitor the impact of competition level on the country. There are 5 parts that are described
below (Porter’s Five Forces of Competitive Position Analysis, 2018).:
Rivalry with existing competitors: Vodafone provides superior quality of services to all
users this it is the market leader in the country. Hence it directly increase their satisfaction level
of all people and thus it can maintain strong position in the market as well as in front of all users.
Thus as a result they can directly maintain cooperation and coordination among all nations.
Vodafone also creates unique clever strategies so that it can maintain good and strong position in
the market and thus it can give strong competition to other firms.
Bargaining power of Buyers: Bargaining power is very strong. They have the capacity
that they can reduce the price of all sellers by putting pressure on them as there are many
customers who can purchase the product. They can do this upto a small level. But then only they
can maintain a unique position in the market as well as in front of all users. Thus as a result they
can easily give strong competition to other firms. Hence they can earn more revenues and they
can also enhance the market share.
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Bargaining power of suppliers: According to the Deloitte, it can be said that supplier's
power is very strong and thus it cannot maintain good position in the market. It is the cost leader
in industry thus through this company can bring new and good quality of raw material from the
market (Leonidou, and et. al., 2015). Thus they can easily create and deliver superior quality of
products to all users. Thus as a result they can easily maintain competitive advantage over other
firms. Thus as a result they can easily enhance the services to all users (Scholes, 2015).
Threat of new entrants: Threat of the new entries are very weak. Thus Vodafone has to
decrease costs of all products and services so that it can attract many users in less time. Thus as a
result they can easily maintain good position in the market. Through delivering of superior
quality of all products to all users they can attract the comprtitve customers also. Thus they can
easily increase the market share. Hence they can retain more users for longer period of time and
thus they can easily increase the brand loyalty for the firm.
Product substitutes: Vodafone is facing low threat from the substitute company. Thus as
a result they can become very famous due to costs leadership strategies. It can become very
famous due to the economies of scale through which it can easily increase their production due
to lower costs. Absorption price is also increased as it is generated from various suppliers and
this price is not passed to the customers. Thus as a result they can easily gain more revenues and
it can also increase the market share.
TASK 4
P.4 Understanding and interpreting strategic direction
Bowman's strategy clock model:
Business has to provide different products to all users. Thus they have to evaluate the
competitor's needs so that they can satisfy all needs and wants. Business can use this effective
model so that they can perform all activities in many countries.
It has different 8 positions through which it can perform all operation's in a unique
manner. Through this positions it can easily operate all functions in an efficient manner. Thus 8
functions of this model used by Vodafone are described below:
Low price: In this step firm charges low prices for all products and services. Vodafone
can easily understand the attitude and behaviour of all users and thus it can charge low price for
all products and services. Thus they can easily deliver products at low costs and hence they can
easily give competition to other firms.
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Low price with low value added: They deliver the services at lower costs but they make
use of lower quality of natural resources. Thus they deliver the low quality of services at lower
costs to different competitors. Thus it cannot create unique position in the firm (Spender, 2014).
Hence it cannot satisfy all users and thus it cannot maintain good image in the market.
Hybrid: Business can sell different goods at lower costs. Thus as a result they deliver
different products at reasonable price so that they can maintain good and unique position in the
market. This helps the firm to add distinct features in the market. Thus they can maintain good
and unique position in the market (Woerner and Wixom, 2015).
Differentiation: It is the process in which company can easily sell wide variety of
products to all users. Company creates different products and sell it on different target market.
Through this they can sell different products in the market. Hence it can attract many users in
less time.
Focused differentiation: In this products are delivered to a particular segment which
have more changes of giving growth and profits. Thus firm give different and unique products. It
is targetted to a particular section so that they can easily sell different products to the specific
segment. Thus they can gain more users in less time.
Risky High margin: It is the step in which company can easily evaluate the high risky
market and thus it can maintain good and unique position in the market. As company has
determined the high and risky position then it can easily reduce risk in the market. Thus it can
gain more market share and profits.
Monopoly pricing: In this there is one company and thus it can charge higher or lower
price. Price setting is the will and discretion of all managers. Thus as a result they can maintain
unique and good position in the market and industry. In this company can set any price and thus
it can set the price which it wants and buyer has to purchase it or they can take decision that they
do not purchase product.
Loss of market price: In this companies tries to fix a standard price for all the products
in the market (Aharoni, 2015). Thus as a result they cannot easily increase the market share and
thus they cannot gain much popularity.
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CONCLUSION
From above report it has been concluded that business strategy is very crucial for every
company. Various external and internal factors exist which can affect Vodafone in a positive or
negative manner. Porters five forces model is used and Bowman's strategic clock model is used
in company.
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REFERENCES
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Online
Porter’s Five Forces of Competitive Position Analysis, 2018. [Online]. Available through :
<https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html>.
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