Business Strategy Report: Macro and Internal Analysis of Vodafone

This report provides a comprehensive analysis of Vodafone's business strategy, examining the impact of the macro-environment through PESTLE analysis, including political, economic, social, technological, environmental, and legal factors. It then delves into Vodafone's internal environment and organizational capabilities, focusing on strategic capabilities and the VRIO model to assess valuable, rare, costly-to-imitate, and organized resources. The Ansoff Matrix is applied to explore market penetration, market development, product development, and diversification strategies. The report also analyzes the telecommunications sector and Vodafone's strategic direction, offering insights into the company's strengths, weaknesses, and competitive advantages within the United Kingdom and Mexico markets. The report highlights the company's strategic approaches for growth and market positioning, including the application of various tools and techniques.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and Influence of Macro Environment on Vodafone..................................................1
TASK 2............................................................................................................................................4
P2 The internal environment and organisation capabilities .......................................................4
P3 Analysing the telecommunications sector.............................................................................8
TASK 4............................................................................................................................................9
P4 Understanding and interpreting strategic direction................................................................9
CONCLUSION ............................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
According to the current market situation there are many factors that a company can
adopt for having growth and success. In context with telecommunication, this sector is growing
at a rapid speed. Therefore, there are many organisation those are operating their business in the
same field because of which a lot of competition can be seen (Ackermann and Audretsch, 2013).
Henceforth, it has become challenge for the companies to apply appropriate strategies so as to
sustain a better position at market area. As per the survey conducted it around 56% of the people
works in this sector which is equal to 22 million. Telecommunication sector contributes around 5
billion Euros in the economy of the nation. In this report, company that has been taken is
Vodafone, which is a renowned organisation in United Kingdom since 1982. In this report, there
are various factors are discussed that can have an impact on business operations. Other than this,
weakness and strengths are included in this assignment.
TASK 1
P1 Impact and Influence of Macro Environment on Vodafone
Pestle Analysis of Vodafone
PESTEL analysis defines the external factors which affects on a business that includes
political, economical, social, technological, environment, and legal, Vodafone's external aspects
are described below -
Political factors - Political factors are most influential elements for a company which impacts
on its establishment when the firm is expands its infrastructure to a new location. Then, the
business is abide to follow the rules which are regulated by the government of the country.
Vodafone is dependent on the governing bodies of the country, the government develops such
policies and rules for the a business which works on globalised level. In Mexican government
does not allow any telecom company to enter in the market so easily, it tightly holds the license
procedure (Annabi and McGann, 2013). Because Mexican government needs high quality
service and they reduces the use of mobile techniques for children. So Vodafone needs to take
the permission from government and to establish its infrastructure for the excellent service.
Mexica also has a communication act which needs to be follow to establish in the country.
Economic Factor – Economy is the factor which depends on the country growth cause higher
GDP of a country reflects in company's growth. The recent recession time effect on the
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customer and market as well, customer has less purchasing power in that time most of the
telecom companies were going through risk but at that time Vodafone played a smart game, it
offered low prices to attract customer to increase its sales.
Social Factor – Social factor consists of the life style of a people there culture and values.
Mexican population is well educated and that' why they have good decision making capability,
so when they making their mind to purchase the a phone service that may effect to Vodafone, if
it has a good strategy then it allure the public to stand in market place (Auzair, 2011).
Technology Factors – Mexico is well developed country and that's why the telecommunication
companies wanted to entered in the market to earn a lot. So they put some efforts to make there
product different from others. Vodafone can offer them to high bandwidth internet speed to
sustain in the market place.
Environment Factors – with the rise of globalisation, people are more aware about environment
safety, consumers always want their favourite brand must follow all the ethics to protect the
environment. Vodafone has been a company with high dynamic nature from years, when it
comes to expand the market, it should always consider the aforesaid facts and analysis. Vodafone
has zero environment harm safety culture, so that it can help to save the environment.
Legal factors - A company which has so many rivals should be so vigilant about the legal
issues, cause it does not follow the rules then it can be major hazard for the company even the
company can be prohibited from the market. As Vodafone can be penalised if they has issues
like employee payment then legal issue can be raised.
Ansoff Matrix is also known as market grid which help an enterprise to expand their business
operations and activities in future. It support company to gain competitive advantages easily.
This matrix mainly focuses on four options which show new and existing products with
innovative markets (Azar, 2011). It is more essential and significant part for the each and every
enterprise to accomplish their predetermined objectives and goals in limited time duration.
Further, it support Vodafone's to introduced their new products and services at marketplace and
to the customers. Therefore, company easily develop their better image and goodwill in
marketplace. This matrix has 4 parts such as Market penetration, market development, product
development and diversification. All these are used follow by the Vodafone's which are shown as
below:
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Market penetration: In this, an organisation seeks to accomplish long term growth and
success with existing commodity in their actual market segments. Main aim and motive of
company for applying this strategy is to maximise its market share. To do this, Vodafone's needs
to analysis innovative ways with aim to maximise customer trust and grow them its lifetime
values in an essential and effective manner (Bharadwaj and et. al., 2013). Company might
improve their order process which help in creating it easier for clients, extend hours and develop
adjustments that enhance the long term benefits of offering.
Market development: It is one of the important and foremost element of Ansoff Matrix
and in which company seeks success by targeting its available gods to new segments of market.
New audience can be outlined by their geographic places likes a new country. If Vodafone's sells
their internet services to the customers. They might consider an innovative campaign that applies
various sells channels in order to target large number of audience.
Product development: It is a role of business manager to develop their new products and
services in existing marketplace. Thus, it assist the company to attract large number of customers
and maximise their sales and revenues within an organisation. In this Vodafone's launch 23
exclusive handsets (Bucolo and Matthews, 2011). In this company mainly emphasis on pricing
strategy via unlimited bundles of text services and voice. In this SMS services consist multiple
media and text message like sound, music, pictures, text and video.
Diversification: Growth and development of the company is highly depends of
diversification in their new products for innovative places. Vodafone's Ghana has established
fibre-to-the-home services in across twenty communities conjunctive 1000 homes. Another,
business organisation fibre investment is aspects of their mass-market wireline expansion
scheme. It is important and beneficial for the organisation to maximise their profitability and
productivity in limited time period. Company has better opportunity to launch highly
magnetisable innovative value added services like broadband offering motive at new-build
marketplace (Grover and Kohli, 2013). Thus it is essential and important for them to gain
competitive advantages and maintain long lasting relation with customers. It benefited
Vodafone's to improve their performance and effectiveness at marketplace.
All these are the essential and valuable part for the company growth and success. These
are assist to maximise their market share and sales. Thus, Ansoff Matrix is a main part of the
business expansion which support to them to attract large number of customers easily.
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TASK 2
P2 The internal environment and organisation capabilities
Business of the Vodafone is mainly expanding their area of operations as they are one of the
largest company within telecommunication sector. They are currently dealing in various
countries like Europe, India and many more. High market value has already been created by this
company and that is about 100 billion pounds. There are various kind of operations which are
being conducted by the company In number of countries and thus they are on the track of
continuous expansion (Jocovic and et. al., 2014). Numerous kind of external factors of the
company within marketplace provides support in meeting the successfully evaluation for the
company which is being described below:
(1) Strategic capability mainly suggests the abilities of business for mainly controlling use
centred systems which in turn can mainly empower the potential of surviving and thus motivate
for long period of time. While enter constrain considers the frameworks a business utilizes, it
rotates around the connection's preferences, assets and market position, imagining how well it
will be able to utilize methodologies later on. There is no single approach or general metric for
assessing or watching key limit. There are different sort of key capacities which are being
expressed as the unpredictable procedure because of different sort of elements which are by and
large mostly got to (Kalyani and Sahoo, 2011). There is the way toward characterizing the
methodologies for the business which is for the most part known as examination of key esteem.
This is for the most part contingent on the yearly information reports, open studies alongside
showcase patterns for investigating the what sort of business where there are sure capacities and
abilities which chiefly everybody needs upon. Business of Vodafone is for the most part
changing and they are securing different sort of extra assets which ought to principally perform
different sort of new systems esteem examination.
There are number of elements which are being utilised and thus they have the abilities for
providing the valuable contribution by the business abilities. Numerous kind of assets which are
present like properties and cash with various kind of patents which in turn can give the valuable
contribution for the business abilities of making and implementing strategies (Klettner, Clarke
and Boersma, 2014). Numerous kind of factors for the abilities of strategy including the HR,
structure of company along with having employee skills which in turn can enhance the
competition of businesses.
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(2) “VRIO” Model: In this kind of factor, numerous kind of tools and techniques are being
utilised which in turn can help out in determining the numerous internal sources and its abilities
so that support can be given for attaining the sources and thus sustaining the competitive
advantage.
Valuable: This can be stated as one of the latest kind of query in which various kind of resources
are present and thus they mainly allow the company for having various kind of opportunities
along with protecting from the insecurity. There are various kind of resources which are present
and considered as important answer which is positive in nature. If the customers are mainly
increasing, then the value of resources mainly increases by the support given. This in turn will
bring out the applying the activities along with minimising the price of product (Köseoglu and et.
al., 2013). There will be disadvantage regarding the competition when quality of resources are
not qualified with eligibility and this in turn creates the need of resources evolution which can
bring the modification within the internal and external factors for making it less valuable.
Rare: Numerous kind of resources are mainly present and thus can be acquired by more then one
company as they are considered rare. There are various rare and valuable resources which can
give out better competitive advantage. Moreover, there is the scenario, there are huge amount of
similar resources present within the companies and they mainly utilise it for gaining high level of
competitive advantage. Usage of various kind of similar resources is being done is being done by
implementing the same tactics and thus no company can have the best performance.
Costly to Imitate: There is the main cost which is being involved for simulating the resources
and there are no possibilities of imitation along with substituting or purchasing at reasonable
price. There are mainly two kind of ways by which stimulation can be done which are direct in
nature of resources and thus giving out the comparable products and services (Murano and et. al.,
2011). There are numerous kind of resources by the company which has mainly rare, valuable
for having the factor of sustainability. There are various resources which are rare in nature:
 There are number of roots due to the some kind of sources which mainly cause of
attaining the competitive advantage.
 There are various kind of origins and its root which are made with long period of time.
 Abilities and side potential of the numerous resources which can mainly base upon the
culture of company along with interrelated relationships.
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Organised to Capture Value: There are various kind of resources which does not give much
more benefits for the company as they will not be able to capture the value within them. Main
focus upon the company's management is on looking after the management system, processes,
structure of company and its culture which in turn can mainly enable to mainly realise the
potential and abilities and thus mainly copy the certain amount of resources.
(3) Strength and weaknesses:
STRENGTHS: Marketing: Focus of the company is upon the managing the marketing activities.
Example can be taken of introducing the unique kind of concept of the dog in
advertisement which can follow the master everywhere just like the Vodafone network.
Along with this, Zoo-Zoo' has been introduced within promotional activities for attracting
large number of customers. Revenue Generated: Huge amount of dollars are mainly earned or being generated by the
company on annual ratio. In the year of 2017, turnover of the company was about 112
billion dollars and thus due to that it has been ranked upon the 106th position across the
globe and thus number 83rd within market place. Premium Cost: There are sure administrations which are being separated by Vodafone
while showcase is being entered by its rivals. Because of better administrations alongside
correspondence, clients has positive mentality towards the administrations of
organization. As result, Vodafone is for the most part ready to get some sort of premium
out of the clients while other telecom administrators are attempting to keep up the
positive edges (Oestreicher-Singer and Zalmanson, 2012).
 Massive Market Coverage: According to the Forbes, Vodafone is on 395th rank among
the 2000 universes top brands. This sort of organization has different issues like system
blunder and in this way is known for wide circulation. In India, this organization has the
second biggest base settled down. Activities are being held in more then 30 nations.
WEAKNESSES:
 Dropping Subscriber Base: As per the graph, Subscriber base of the
Vodafone has been dropping down within the last few years. This can
be stated as main issue for the Vodafone which is mainly looking out
for the international market.
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 Dropping Brand Valuation: This can be stated as one of the factor
which in turn can cause for the rate of subscribing which is mainly
lowering down. Brand valuation along with subscriber base which is
highly strong at the beginning (Schaltegger and Wagner, 2011).
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 Losing market share in USA: There is the demand of the Vodafone for
the premium within the country like USA for the motive of attaining
success and growth. Therefore, this can be stated as one of the reason
which will be loose the market to many companies like Verizon
wireless, AT&T which are performing more then UK.
P3 Analysing the telecommunications sector
There is hue importance of evaluation of the telecommunication
sector which helps in determination of the competitors which are present in
market and the strategies which are adopted by them. Such analysis
provides the opportunity regrading development of their own strategies
which contributes in the process of attainment of competitive advantage.
Porter's five forces is one of the effective model which improves the
understanding regarding ascertaining of competitiveness of business
environment. It provides the opportunity to Vodafone is to assess the
profitability which is associated with their strategies and business
functioning (Business Strategy. 2015). The application of the provision of this
theory helps in determination of the other important factors which are
present in business environment and have negative impact upon the
performance of organisation. These forces are classified into five groups are
defined below:
 Competitive rivalry: At this step management of Vodafone
identifies different number competitors and their strength in
organisation. It is observed that in telecommunication sector hue
competition is present which impact the business operations of
Vodafone. This will improves the understanding of management of
Vodafone to rebuild their strategies which contributes in attraction of
large number of customers. Due to having high competition in market
they decided to fix low prices of their services to influence the
behaviour of customers. The big rival which are present in market
includes BT, EE etc.
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 Supplier power: This will includes the process of identification of the
number of suppliers which are associated with Vodafone in
providence of their different functions to end customers. Here, they
also determine the cost of switching from the suppliers because this
analysis helps in determination of the fact that how existing suppliers
are important for them. It is identified that large number of supplier
are present in market so, the option of switching is cheaper
alternative.
 Buyer power: This will includes the process regarding the
determination of the power of buyer and having impact upon their
prices. They also improve their understanding the about hoe much
expensive for buyer to switch from their organisation to their rivals. It
is observed that Vodafone is multinational organisation which has
huge customer base which shows that the power in their hand less
regarding influencing of their pricing policies.
 Threat of substitution: This includes about the identification of the
substitute product and services which are provided by their rivals.
This will helps to understand that if substitution cheaper then then
will have direct impact upon their probability and customer base. So,
the Vodafone is need to use the innovative technologies to make their
business operations more unique and effective.
 Threat of new entry: It includes about the assessment of entry
modes in the market. It is observed that in telecommunication market
entry is not easy which requires fulfilment of different legislation and
requirements. This will prove as the strength of the Vodafone to
improve their market share and attract large number of customers.
Determination of these information helps to make better strategies
which provides the opportunity to build high brand image and
improves profitability.
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