Comprehensive Business Strategy Analysis of Vodafone's Performance

This report provides a comprehensive analysis of Vodafone's business strategy, examining its macro environment through PESTLE and Ansoff growth matrix models, as well as assessing its internal environment and capabilities using the VRIO framework. The report further investigates the impact of Po...Read More

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Description on influence and impact of macro environment on Vodafone...........................1
TASK 2 ...........................................................................................................................................3
P2 Description on the assessment of Vodafone internal environment and capabilities. ............3
TASK 3 ...........................................................................................................................................5
P3 Porter five forces impact over Tele-communication enterprise. ...........................................5
Threat on new entry....................................................................................................................6
Bargaining power of suppliers....................................................................................................6
Competitive rivalries...................................................................................................................6
TASK 4 ...........................................................................................................................................6
P4 Define the statement on Bowman strategic clock model.......................................................6
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategic derived as high level plan to reach specific objectives. This is one of
method which helps to put consideration over vision, mission, competing firm goals
successfully, prioritizing objectives and optimising financial performance of firm. This is a term
which assist in formulation of strategies in order to meet all business plans. To have
sustainability in competitive environment it is essential to focus over roles as are operational,
tactical and strategical. Mobile telecommunication sector is rapidly growing in UK as they are
focussing over core strategies of firm (Hsieh and Chen, 2011). Thus, Vodafone is one of the
largest leading mobile telecommunication companies. In addition to this, present report is
focussing over activities of Vodafone and its precise strategies models. The report will be
inclusive of things as are macro environment, PESTLE, Asnoff growth vector matrix and
Bowman strategic model to have specific strategic direction of enterprise.
Vision of Vodafone- In order to be the communication leader in an increasingly connecting
world.
Mission of Vodafone- with the help of enriching the life of customer with the one of the unique
power of mobile communication.
TASK 1
P1 Description on influence and impact of macro environment on Vodafone.
Macro environment is consists of various external environmental factors which affects
surrounding of an organization. This is inclusive of factors as are political, legal, social,
technological factors which directly affects working of enterprise. In order to gather depth
information which affects business strategy of Vodafone. Here, two strategic models will be used
as Ansoff growth matrix and PESTLE.
PESTLE model
Political factors- This is consists of components as laws, legislation and regulations. Political
factors are greatly influenced by business strategies and operational function of Vodafone. The
factor which is affecting regulation of Vodafone is EU roaming that aims to have reduction in
charges in usage of mobile phone usage ( Brewster, 2017). In this it can be said that this are
increasing degree of consumer rights.
Economical factor- This kind of factor are affecting growth rate of GDP and level of inflation
rate within markets. Global financial crisis in firms are also affecting the operation growth of
1

Vodafone enterprise. Thus, it can be said that any kind of modification in external economic
condition also affecting the operations of Vodafone (Brewster, 2017).
Social factor- There are numerous things which can also affects well on operation of Vodafone.
In the current scenario, changes in working patterns becoming popular as it is helpful to make
individual work from home. There are some issues as are green policies and ageing population
are also affecting growth of Vodafone sectors.
Technological factors- Innovation in relation to technological advancement are affecting the
growth rate of enterprise. In these days, there are various alternative means of communication as
online chatting, Yahoo are affecting strategies of Vodafone in large manner (Vodafone Group
Plc PESTEL & Environment Analysis, 2017). Mobile telecommunication companies are
focussing over considerable amount of research and development in relation to introduce
innovative product and services to market.
Environmental factors- In this it can be said that differed environment has differed needs and
this all are affecting profitability of an enterprise. Thus, it can be said that each country is having
its own environmental laws and legislations. There are some Weather, climate changes and laws
regulating environmental pollution all are affecting operation process of Vodafone.
Legal factors- In this term it can be said that legal factors will be inclusive of following things
as are national laws, legislations, policies etc. with the help of conducting activities of enterprise
in UK, Vodafone need to follow some rules and regulations (Woodcock, Green and Starkey,
2011). The whole management of Vodafone are requires to following various of laws and
legislation, employment rights laws, health and safety legislations etc.
Ansoff growth matrix-
It is very assistive to provide road map with the help of which they are able to take entry
into market. In this way, Ansoff growth matrix is defined in following manner as are-
Market penetration- This term is defined as successfully selling the product and services in
some particular market can be found as market penetration strategy. It is assistive in order to
capture the high amount of market share (Chang and Chuang, 2011). It can be done with the help
of promoting new product by strategies as are advertising, lower pricing, discounts etc. Vodafone
allows attractive discount offer to their customer, it will attract them.
Market development- It is occurs when organisation seeks to expand it business activities in new
market with existing products. It can be understood with the help of example as are Vodafone is
2

taking various initiatives in order to enter into Indian market with the help of existing products
that means Vodafone is using market development strategy (Hsieh and Chen, 2011). Thus, it can
be considered more risky as firms take various steps to enter into new market.
Product development- It is the kind of strategy which works as to developing the new product
into existing markets. Vodafone follows this kind of strategy in UK, by having innovation and
providing new products to the customer of United Kingdom (Boyer, Frank and Van De Vanter,
2010). It is one of the optimum strategy and it is very helpful in order to sustain business
activities in the competitive market. With the help of investing into brand image and values firm
is able to develop the new products. This kind of activities are helpful in relation to have
increment in customer base and profits of business enterprise.
Product diversification- It is one of the diversification strategies with the help of which product
is to launch into new markets. It is considered as one of the risk strategy. This is helpful in order
to robust brand image and values (Amato and et.al., 2017). Thus, it can be said that there is the
maximum efforts which are laid on the business activities as marketing and product
development. Vodafone must have the extensive knowledge about the specific markets.
TASK 2
P2 Description on the assessment of Vodafone internal environment and capabilities.
In order to sustain in competitive markets. Firms need to have robust internal
organizational structure which works as to have proper allocation of resources (Blondiaux and
et.al., 2017). In this context, the internal capabilities of Vodafone internal environment
capabilities are defined in following manner as are-
Strategic capabilities- This term refereed as business which work as to meet the competitive
strategies in market. It is helpful in order to enhance their value in particular period. Its takes
business strategic decision into the accounts and it helps top concentrates on the organisation
assets, resources and various assets in relation to markets (Blackburn Hart and Wainwright,
2013). It is the process which works as to utilising organisational resources, skills, capabilities in
the appropriate mode. This is one of the impelling steps in order to full fill the desired aim and
objectives so that it can be accomplished in the effective and efficient mode.
With the help of VRIO model strategic capabilities of firm can be determine as are-
To analyse the internal capabilities and resources of firm, VRIO framework model is
need to be used. It is one of the effective model which is developed by Jay B Barney in 19191
3

and it is considered as precise model which works as to analyse the strategic capabilities of
enterprise. In this way, the analysis of internal cap[abilities of Vodafone are defined in following
manner as are-
Value- In this term, it can be said that resources are utilised by Vodafone are much valuable and
it is helpful in order to gain the competitive advantage in market. This kind of resources will be
inclusive of things as are human resources, financial resources, physical resources and
information technology resources (Woodcock, Green and Starkey, 2011). This kind of the
resources are partly competitive and its provide the competitive advantage to the Vodafone. With
the help of this kind of analysis it can be understood that resources implemented by the
Vodafone and it is need to sustain in the competitive environment.
Rare- with the help of effective analysis of internal capabilities of Vodafone, it is need to be
identified by the resources and it is need to be implemented by the firm and this are rare which
helps as to provide temporary competitive advantages (Boyer, Frank and Van De Vanter, 2010).
This kind of the resources are implemented in the precise mode so that desire goals of enterprise
can be achieved and it can be effectively managed. This kind of the resources are not rare as
Vodafone biggest multinational competitors and this kind of enterprise can raise substantial
capital.
Imitable- This kind of the resources are need to be managed by the enterprise as Vodafone. The
product which are defining by the Vodafone are rare and due to this that are bitten extensive. In
this way, it became tough imitate by organisation of competitors. In addition to this, it is need to
be identified that Vodafone need to use those resources which is helpful in order to enhance the
effectiveness in the quality of products and services (Gray, Smart and Bennett, 2017). This kind
of the things are helpful in order to provide competitive environment with the help of which they
are able to accomplish their aims and objectives.
Organised- This kind of resources are helpful in order to manage the activities of Vodafone, it is
need to be partly organised and exploited by the business enterprise. In order to have
sustainability in competitive market, it is essential for the Vodafone management to allocate and
exploit internal resources in the appropriate and precise mode (Blackburn Hart and Wainwright,
2013). With the help do this analysis it is need to be identified that human resources employed in
the enterprise are that much organised. In this it can be said that it is effecting the internal
capabilities of firm.
4

Strength and weakness of Vodafone-
As per this section strength and weakness of Vodafone is need to be identified. It will be
helpful in order to assessing internal environment and it capabilities in the more effective and
efficient mode. It is defined in the following manner as are-
Strength- In this term it can be said that the strength of Vodafone is the massive market
coverage across UK and in all over the world. With the help of it quality products and services
the management of the Vodafone can take effective steps towards having increment in the
revenues of enterprise. Vodafone need to use effective marketing strategies as it is useful in
relation to attracting the more number of customer in the market (Gray, Smart and Bennett,
2017).
Weakness- In this it can be said that due to current political instability and increment in
the mobile telecommunication, subscribing rate in Vodafone is need continuously decreasing.
According to the present scenario there is high competition in the market. This, the rate of
subscriber is also decreasing due to existence of many rivalries (Boyer, Frank and Van De
Vanter, 2010). The rate of mobile telecommunication in the UK is still on the high rate. In order
to cope up with this customer are prefers to another enterprise in order to provide cheap and
effective services as compared to Vodafone.
TASK 3
P3 Porter five forces impact over Tele-communication enterprise.
This kind of resources are helpful in order to determine the external position of the
enterprise. This, this forces are helpful in order to determine the significant impact over the
strategic competitiveness over the operation of Vodafone. This kind of things are need to be
discussed in the following manner as are-
Bargaining power of consumers- In this it can be said that there are number of buyer to
the mobile telephone industries. This, it can be determined that the customer who are having
high willingness to purchase can buy superior products at the high rates. In this way, it can be
said that Vodafone need to ensure about the profit at the above average returns, as compare to its
competitor in the market. Buyer is one of the two horizontal process and it works as to influence
the appropriation of value created by the industry (Blondiaux and et.al., 2017). In order to
provide innovative products to customers, they can be attractive towards the firms' product and
5

services. New product will be helpful in order to have reduction in the pricing strategies to
Vodafone.
Threat of substitution- In this it can be said that in new product or services, need to take
various initiatives in order to deal with the need or customers. This kind of activities will be
helpful in order to deal with the sustainability in market (Blackburn Hart and Wainwright, 2013).
In this Vodafone PLC is need to be services oriented rather than being product oriented. This
kind of the things will gather the attraction of large number of buyer in market. It is helpful in
relation to have increment in the switching cost of customers.
Threat on new entry
Vodafone is known to be the price leader in the market in terms of its reasonable and
affordable networking services to the users in comparison to other network operators where the
cited firm also tends to propose new offers (Blondiaux and et.al., 2017). Also, there exists a
prime requirement of enormous license fees with high capital and infrastructure cost. All these
factors are apparent to create difficulties for the new entrants to easily position in the market.
Beside this, a rapidly changing technology with advanced application that has already been
adopted by Vodafone makes it hard for the new contenders to easily enter into the market and
combat the intensity of high rivalry.
Bargaining power of suppliers
It is currently at a medium range where the suppliers are known to have a definite power of
negotiation up to an extent. This is also due to a large number of suppliers engaged in this
particular sector with an outsourcing networking at an international level. Also, a high cost of
switching is there in this industry that often lacks the existence of substitute products and
services (Boyer, Frank and Van De Vanter, 2010). This is also on considering the fact of having
strong suppliers in the mobile industry of UK where Vodafone having huge margins of profit
compels its suppliers to gain high revenues.
Competitive rivalries
This stands to be at a high rate for Vodafone on referring to a large number of contenders
in the market. Also, there exists an open market for the contenders where the legislative norms
governing this industrial sector is known to favour the state of competition (Chang and Chuang,
2011). Apart from this, there is no or a very less loyalty towards the brand of a specific product
6

and the buyers are together having plentiful options to choose from the services offered by other
service providers such as Virgin media, Sky, O2, Talk Talk, Orange and BT, etc.
TASK 4
P4 Define the statement on Bowman strategic clock model.
It is one of the effective model which help to analyse competitive position in the market.
It is also used to determine marketing positioning of the products. It is the kind of strategic
positioning which determines that how particular product is need to be places in the market
(Boyer, Frank and Van De Vanter, 2010). The main objective of Bowman strategical model is to
be based on the two kind of dimension as are perceived, value and price. It sis assistive to
analyse the position on the basis of its customers. In this manner there are some dimension are
defined under bowman strategic model as are-
Bowman strategic model positioning-
It helps us to know that how the product and services are need to places in market. Thus, it can
be said that Bowman strategies are related to understand this eight positions in the market so that
enterprise can take effective step towards it in order to positioning the product in market. This is
one of the effective mode in order to create the edge against the competition.
There are defined in following manner as are-
Low priced and low added value- it is not the most competitive position in the Bowman
strategic mode. In this way, it can be said that the product and services are not to be
differentiated customers used to perceive the very little value. It relates to the bargain basement.
There are number of firms who don't want to have this kind of position in market (Woodcock,
Green and Starkey, 2011). This is one of the competitive strategy by keeping the low price of
product in the market. This is helpful in order to attract the new and potential customers. The
quality of the product can be inferior but the prices are attractive enough to convince the
consumers.
Low price- In this firm need to use this kind of strategies in order to deal with the sales
volume in the market. It is one of the vital instruments. The one of the main objectives in relation
to this is to have cost minimisation.
Hybrid- This are those component which offered good product and services and it is
need to be valued by the customer in the effective manner. In this the quality of product and
7

services are effective in this way customer can value to the reasonable prices. This is helpful in
relation to build brand loyalty in the eyes of customer.
Differentiation- under this company takes various kind of initiatives in order to develops
the product and services, which is helpful to offer unique attributes and this are need to be valued
by the customers (Boyer, Frank and Van De Vanter, 2010). This is one of the effective strategies
in order to cope up with the competitive edge in the market. This, it can be said that branding
plays essential role as it is helpful in order to provide the quality products to the customers.
Focussed differentiation- This kind of strategies will be adopted by the enterprise in
which the customers decides to purchased the product on the basis of perceived value only. In
this it is not essential that customer have its own real value.
Risky high margins- This term is characterize as the hazardous situating system which is might
to get bomb in the long run. With the assistance of this sort of the methodology, the endeavor set
high cost of the items without offering anything in the arrival of saw esteem (Blackburn Hart and
Wainwright, 2013). In this way the client's keep on buying the result of the extravagant qualities.
On the off chance that the client find in the market the better situating item which offer same sort
of qualified an incentive in the lower cost. In this manner, one might say that dangerous edge is
one of the uncompetitive technique (Brewster, 2017).
Monopoly pricing- if there is restraining infrastructure circumstance in the market, the business
is putting forth a similar sort of item in the market. They don't have to put significant thought
over what sort of item they are putting forth to clients (Blondiaux and et.al., 2017). In this
condition they just have one decision that they have to get it or not. Along these lines, in this sort
of circumstance the syndication can set the cost of the item according to their decision.
Loss of market share- In this one might say that this sort of the position is the formula for any
focused in advertise. There are different sorts of range is standard cost of items with the low
apparent esteem (Boyer, Frank and Van De Vanter, 2010). They fill in as to keep the high
incentive for an indistinguishable item from contrast with different rivals in showcase.
8

CONCLUSION
Based on above report it can be concluded that strategical function of the firm determines
plan of actions so that enterprise can perform its activities effectively. Business strategic derived
as high level plan to reach specific objectives. This is one of method which helps to put
consideration over vision, mission, competing firm goals successfully, prioritizing objectives and
optimising financial performance of firm. To have sustainability in competitive environment it is
essential to focus over roles as are operational, tactical and strategical. The present report will be
inclusive of activities as are macro environment, PESTLE, Asnoff growth vector matrix and
Bowman strategic model to have specific strategic direction of enterprise. To have sustainability
in competitive environment it is essential to focus over roles as are operational, tactical and
strategical.
9

REFERENCES
Book & Journal
Hsieh, Y. H. and Chen, H. M., 2011. Strategic fit among business competitive strategy, human
resource strategy, and reward system. Academy of Strategic Management Journal, 10(2),
p.11.
Brewster, C., 2017. The integration of human resource management and corporate strategy.
In Policy and practice in European human resource management (pp. 22-35). Routledge.
Woodcock, N., Green, A. and Starkey, M., 2011. Social CRM as a business strategy. Journal of
Database Marketing & Customer Strategy Management, 18(1), pp.50-64.
Chang, T. C. and Chuang, S. H., 2011. Performance implications of knowledge management
processes: Examining the roles of infrastructure capability and business strategy. Expert
systems with applications, 38(5), pp.6170-6178.
Hsieh, Y. H. and Chen, H. M., 2011. Strategic fit among business competitive strategy, human
resource strategy, and reward system. Academy of Strategic Management Journal, 10(2),
p.11.
Boyer, J., Frank, B. and Van De Vanter, K., 2010. Business intelligence strategy: A practical
guide for achieving BI excellence. Mc Press.
Brewster, C., 2017. The integration of human resource management and corporate strategy.
In Policy and practice in European human resource management (pp. 22-35). Routledge.
Amato, F. and et.al., 2017, July. A Target Driven Approach Supporting Data Diversified
Generation in IoT Applications. In Conference on Complex, Intelligent, and Software
Intensive Systems. Springer, Cham.
Blondiaux, N. and et.al., 2017. Reversion of antibiotic resistance in Mycobacterium tuberculosis
by spiroisoxazoline SMARt-420.Science.
Burke, W. W., 2017.Organization change: Theory and practice. Sage Publications.
Gordon, G., 2017. Communication, Vision, and Mission. In Leadership through Trust.. Springer
International Publishing.
Gray, D. M., Smart, K. L. and Bennett, M. M., 2017. Examining espoused and enacted values in
AACSB assurance of learning. Journal of Education for Business.
Blackburn, R.A., Hart, M. and Wainwright, T., 2013. Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development. 8(1). pp.8-27.
10

Online
Vodafone Group Plc PESTEL & Environment Analysis. 2017. [Online] Available through:
<http://fernfortuniversity.com/term-papers/pestel/nyse4/4028-vodafone-group-plc.php>.
11

12