Vodafone: Business Strategy, PESTLE, and Competitiveness Report

This report provides a comprehensive analysis of Vodafone's business strategy, focusing on the impact of the macro environment, including political, economic, social, technological, legal, and environmental factors (PESTLE). The report examines how these factors influence Vodafone's operations and strategic decision-making, particularly in light of issues like Brexit and technological advancements like 5G. It delves into the competitiveness of the telecommunications sector, utilizing Ansoff's growth matrix to explore market development strategies. Furthermore, the report assesses Vodafone's internal environment, identifies strategic directions and options, and discusses the company's responses to challenges and opportunities within the dynamic telecommunications landscape. The analysis highlights the importance of adapting to changing customer behaviors, legal regulations, and environmental concerns to maintain a competitive edge. The report concludes with an overview of the findings and the strategic implications for Vodafone.

Business Strategy

Contents
INTRODUCTION.....................................................................................................................................3
TASK 1....................................................................................................................................................3
Macro environment and its influence on activities of business organisation and its strategies........3
TASK 2....................................................................................................................................................8
Analysis of internal environment of company...................................................................................8
TASK 3..................................................................................................................................................11
Examine the competitiveness of telecommunication sector...........................................................11
TASK 4..................................................................................................................................................13
Strategic directions and options available to enterprise..................................................................13
CONCLUSION.......................................................................................................................................15
REFERENCES.........................................................................................................................................16

INTRODUCTION
Business strategy is referred to a long-term planning through which company easily
attaining their set goals and objectives in appropriate time frame. Basically, strategy is related
with action that taken by the company to enhance their overall performance level. Along with
this, it also defines the way to operate business activities in systematic way which helps in
enhancing the chances of attaining competitive advantage in market place. With the help of
this management got better guidance to perform entire activities in effective manner (Chu,
KrishnaKumar and Khosla, 2014) In addition of this, formulating effective business strategies
helps in handling all the actions and at the same time also reduce the chances of arising issues
and conflicts within the company. This will directly contribute in enhancing the performance
level of the company in an appropriate way (Yuliansyah, Rammal and Rose, 2016). Present
report is based on Vodafone, is a mobile telecommunication company which operate their
business in Europe, US and Africa as well. As a biggest and leading telecommunication firm
offer better services to its customers. Different factors of business environment also impact
on business strategy is mentioned in this project. Along with this, competitiveness of
telecommunication industry is also discussed in this project which may leads in enhancing
the chances of attaining success.
TASK 1
Macro environment and its influence on activities of business organisation and its strategies
Macro environment is use to define those factors that exist outside the organisation and
largely affect its activities and decision-making process. Identification and analysis of
external elements is very essential as this support manager in formulate better strategies
which ensure effective implementation of business operations (Mellat-Parast and et. al.,
2015). Political, legal, social, economic, environmental and technology is all are come under
the macro environment. Impact of all these elements on functioning and strategy of Vodafone
is given in the following points:
PESTLE analysis:
This is one of the most popular and effective tools use by business firms to examine
the external forces in order to take better decision (Malerba and et. al., 2015). As Vodafone
operate in various areas of world and offer different type of services to all its customers. So

before expand its operations in new areas it is very important for organisation to undertake a
study related with external forces of that country.
Importance of PESTLE
One of the main feature of PESTLE is that it provide an opportunity to manager to
identify and examine the factors exist in business environment. This help in formulate
effective policies and support entity to maintain its position in market (Lueg, Pedersen and
Clemmensen, 2015). With help of this analysis entity can formulate a contingency plan and
can respond to the carnages take place in external business environment.
Political factors: This aspect help in determine the government and its various rules
exist in a specific country. Political conditions exist in country largely affect the activities of
business firms. Further various relevant factors such as peace of state, political instability and
many more all affect the growth of company and the industry (Torrent-Sellens, 2015). Like
when government get changed in UK then Vodafone operations get impacted most just
because they require to again and recraft their strategies in define manner of course. It is very
important for Vodafone to examine this because approval of government is very essential
before set up a new plant in a country. Thus, such aspects of political consideration need to
assess and determine in better and supportive manner (Chang, 2016). In addition of this,
Brexit is current issue in UK which define instability in political factors. Brexit is that
incident that largely affect the telecommunication sector. In context of Vodafone, they also
affected from Brexit in which they reduce their performance level. Wifi and internet are the
daily part of an individual's life. Customer believe that data and internet should be treated the
the same by service providers. There is a a complex fight between service providers, people
and government.
Economic factors: This is one of the most significant factor that require to be analyse
by entities because this directly impact on profits of company. Mainly this aspect covers the
inflation rate, deflation rate, currency rate and GDP of a specific country. Good GDP indicate
high purchasing power of individual and this increase the success chances of entity’s product.
Movement in economic conditions of country directly affect the profits of firm so this require
to be examine by Vodafone (Hofmann and et. al., 2014). Economic condition affect
telecommunication sector and also impact decision taken by the firms operate in that such as
Vodafone. Another thing which need to assess by management of Vodafone is to start
operations at such course by evaluating the nature of depression and recession. If they found

that country is facing either of the situation then they have to frame such kind of strategies
which enable in managing that as well as support in managing economic growth as well. For
example, recent time economic crisis the nation has been face by Vodafone. Along with this
global uncertainty is also impact on company which directly change all the strategies. Interest
rates, taxes and inflation rate affect the telecommunication sector. Expenses affect pricing per
plan. Huge funds are to build towers and resources in rural areas and the consumers who
don't live in big cities get affected.
Social factors: This element of macro environment indicate the lifestyle, hobbies,
language, culture and behaviour of local people living in the area in which entity operate or
wants to operate. Study of this element increase knowledge of managers about the attitudes
and behaviour of individuals. This help in manufacture product as per the specific
requirements of customers and results in customer satisfaction. In this way, entity can retain
its customers for a long time period. Vodafone requires to determine needs and preference
of their clients and customers properly (Lewis, 2014). This assist in getting each and every
consumer properly as well as control the social aspects properly. When entity consider needs
of customers while manufacture and offer its products then it help in retain customers for a
long time period. Along with this, for maintaining and managing goodwill at market world,
Vodafone need to contribute in society as well. This facilitate in managing their operations
properly. As it is relate on local beliefs and customers culture in which Vodafone operate
their activities to improve their performance level. Horizontal growth of telecommunication
sector is limited. Due to monopolies in telecommunication sector they have the power to
charge of both internet and mobile carriers.
Technological factors: In today’s business environment when an organisation use
updated technology then it helps in attract more customers and provide support to respond to
the changes that take place in business environment. As Vodafone is known for offer better
and effective products to all its customers so to maintain its market share, it is very essential
for entity to use the new and updated technology (Chang, 2016). With this, organisation can
utilise the opportunities exist in market and can generate more number of profits. By use new
and updated technology Vodafone can manufacture and offer featured products to its
customers and can sustain in market for long run. When a big change take place in
technology then it affect the sector. As Vodafone is focus in the latest trends and technologies
in which firm easily enhance their productivity level. In recent time company use 5G within
this activities this will change customers behaviour and taste as well. Basic needs in

smartphones, like voicemail and caller ID. Now people wants internet access that's why data
is added to mobile plans. Technology is one of the factor that replace very fast with changes
in time. Technology is growing with economic growth and in the firm that us updated
technology get growth and success. Telecommunication firms with 3G services are not allow
to avail tax breaks.
Legal factors: This is another significant element of external environment. Mainly this
indicate the laws and regulations introduce by legal bodies in order to get a control over
business operations of enterprises (Yuliansyah, Rammal and Rose, 2016). It help in monitor
and measure the actions taken by commercial firms to serve its customers. When firm does
not follow the rules then it either results in penalty or legal action. Vodafone face a issue that
it does not give much consideration to needs and wants of its staff members and this is the
main reason why large number of workers are leaving the organisation. For improve this
situation, entity require to introduce some changes in its product and should focus more on
needs of its staff members (Grant, 2016). It is very important that healthy and positive
working environment should be offer to employees so they can work well. When government
introduce changes in legal policies then it affect the decisions and profitability of various
sectors. In order to maintain its positive image and to enhance its goodwill, it is very
essential for Vodafone to take business decision as per the laws and regulations exist in that
country. As Vodafone follow anti- trust law in wireless communication industry to enhance
their performance level at market place. Telecommunication sector is often affected by the
legislations issues. A separate department of Telecommunication was developed in 1985
which was created to expand, develop and maintain significant aspect of telecommunication
system.
Environmental factors: In today’s business environment, customers are become more
aware about various issues and safety of environment is one of it. Entities who consider this
element before take business decision attract more customers towards its products and
services. Further this help in create and maintain a positive image in market that offer large
number of long term benefits to entity (Parnell, 2016). Vodafone have to preserve and work
in favour of environment as well. This enable and support them in managing things properly.
Thus, they have to work properly and in determine manner so that environment would get
preserve and manage properly so that all related issues would get minimise with positive
reflection on society by establishing secure network of radiation. Global warming and climate

changes affect how telecommunication products reach to consumers and this directly affect
the telecommunication industry and its various players.
All these are the major factors of external environment that affect the actions and
decisions of a business entity. By examine these factors, Vodafone can ensure effective
expansion of all its commercial activities in new areas and at the same time can attain its set
goal and objective. In addition to this, entity can achieve optimum utilisation of business
resources as this bring efficiency in business process.
Ansoff’s growth matrix:
This is a tool which can be use Vodafone in order to determine the competitiveness of
telecommunication industry of United Kingdom. One of the main benefit of this it provide
direction to manager which help in take better decision related with business operations.
Further this help in utilise the opportunity either with help of new market and product or with
current market or product. Mainly this matrix is divided into four parts as given in the
following points:
Market development: Under this, entity start selling its products in new market or
areas. Vodafone is already operating in large number of areas and due to this profit number of
entity is very large (Mellat-Parast and et. al., 2015). By offer its services in rural areas entity
can increase its customer base. But for increase the sale of its products, Vodafone requires to
opt an effective channel to interact with target audiences. It is very important Vodafone to
carry out research in order to identify needs of customers as with this, entity can make
products as per their specific needs and requirements.
Market penetration: One of the main benefit of this strategy is that it ensures optimum
utilisation of all resources and enhance efficiency of business process. This increase market
share and business growth of company (Malerba and et. al., 2015). In this section, Vodafone
need to focus on their current products and services and try to sale out them in new market
world or in current market area. This enable and support them to managing things properly so
that desire growth at market world could get assess in define course of frame.
Product development: Under this strategy, new products are manufacture and offer by
firm to serve its customers and get their satisfaction. With this, entity can retain them for long
time period and can get a competitive position in market. Vodafone need to try to develop
new offers adn services in telecom sector which consider under the product development

course. This assist and support them in developing products properly at new market world so
that define growth and sustainablity get done adn procure better.
Diversification: Under this strategy, entity offer new products in new market to
increase its market share and to increase the number of its profits. Vodafone can expand
themselves in two define criteria where one is related diversification and another one is
unrelated diversification. Thus, business could utilise their related diversification so that they
could attract vast range of individuals by introducing relevant products and services like
mobile phones etc.
All these are the major strategies cover under the Ansoff’s growth matrix. Before
choose a final strategy, it is very essential for manager to collect information about the
situation exist in market and undertake a situational analysis will be beneficial for entity in
this.
TASK 2
Analysis of internal environment of company
Undertake an internal analysis is related with identify strengths and weakness of firm.
One of the main benefit of this type of analysis is that it helps manager in take better decision
and help in minimise the negative impact of its weakness. Vodafone operate on an
international level, so undertake internal analysis is very important for entity to achieve
desired goals and objectives.
Strategic capability: This aspect reveals the ability of a business entity to do achieve a
competitive benefit which help in attract large number of customers towards its product. it
examines the strategy and various tools use by firm to execute its business operations.
Further, market position of company and all its resources is also examining in this (Torrent-
Sellens, 2015). Strategic capability of organisation play a big role in its success as this help in
get a competitive edge in market. Interested individuals such as employees and supplier do
efforts to highlight strategic capability of firm. Managers undertake a detailed study about
strategic capability as this help in get desired outcome provide basis to generate more profits
as compare to its rivals. Financial bodies and government agencies also indicate a interest in
strategic capability of firm.

VRIO analysis: This is another tool which is use by business enterprises to examine
the usefulness of resources and its importance in success of entity. It help in utilise all
business resources at an optimum level and also provide competitive benefit to organisation.
Valuable: This aspect of VRIO analysis help in identify the resources that are
valuable to a business entity and are the ones that help in capture a large market share (Lueg,
Pedersen and Clemmensen, 2015). One of the main benefit of these type of resources is that it
support in offer more value to the customers which entity in maintain its market share. These
types of resources add effectiveness in business. This save both time and cost of entity.
Determine the value of its resources is very significant for Vodafone as with this, entity can
offer value to its customers and at the same time can satisfy their needs. Although, Vodafone
have to value their each and every product better as well as value about resources properly.
This enable and support them in managing and gaining competitive advantage and become
leader at global market world. Thus, for this aspect, they need to utilise each and every
resource in better and determined course of manner. In addition of this, Vodafone use
valuable resources which may helps in increasing the customers taste and demand towards
the company products and services. For attaining success at market place, company should
review all the resources in daily basis so that they easily get competitive advantage and at
the same time also make necessary changes within internal and external changes to meet
customers expectation.
Rare: Valuable and rare resources boost up the success process of entity and also
provide competitive benefit. Unique resources support entity in manufacture featured
products for its customers and at the same time help in attract large number of customers
(Hofmann and et. Al., 2014). All resources are rare in frame which need to understand by
Vodafone management better. This rareness enable and support administration to get done
things correct so that competitive edge could be assess better. This will boost up the success
of a firm in define course of manner. As Vodafone has identical resources through which
firm can make and implement effective strategies to attain competitive advantage form its
rivals. For attaining the same, Vodafone should be neglect all those resources that are
common. This will important for company to survive in competitive marketplace.
Costly to imitate: When organisation’s resources remain difficult to imitate by other
organisations then it increase effectiveness of business process. As resources use by

Vodafone are difficult to imitate by other entities so this provide large number of benefits to
company.
Organised to capture value: To get various benefit, it is very essential for business
entity to determine the value of various resources it use to carry out its activities. With this,
firm cam formulate plan to utilise all resources at an optimum level and can get a competitive
position in market (Moseley, 2017). Vodafone need to organise their resources properly
where they have to determine importance of each and every aspect properly. This grouping of
resources enable Vodafone to utilise them better which further support in gaining and
defining competitive advantage.
By this analysis Vodafone determine their strengths and weaknesses which may aid in
expanding business in another countries. As a world's leading mobile telecommunication
company they offer their services in various countries such as Africa, Asia Pacific and many
more. As the main focus of this company is to cater customers needs in which they easily
increase their revenues.
Strengths and weakness of Vodafone
Strengths: This aspect indicate the specific features and qualities that support entity in better
satisfy the need of its customers. Strengths of Vodafone are given in the following points:
 Today, Vodafone is one of the leading player in telecommunication industry.
 Large number of products and services are offer by entity to satisfy the needs of its
customers.
 High brand recall and brand visibility support in attract large number of customers
every year. Due to offer various products and services, entity generate large amount of profit and
at the same time firm ranked among top 2000 brands working in telecommunication
industry.
Weakness: This is the aspect that negatively affect the success of enterprise. Weakness of
Vodafone is given below under the following points:
 Firm is facing a downfall in number of its subscribers. To improve this, entity
require to introduce some changes in its policies and strategies.
 Due to large number of competitors, entity face a price war which decrease the
profits of company (Lewis, 2014).
 Ineffective distribution channel is another weakness of entity.

 Due to ineffective research and development department, entity is not able to offer
new and featured services to its customers.
TASK 3
Examine the competitiveness of telecommunication sector
Porter’s five force analysis:
It is one of the important analysis for business organization of examine the
competitiveness in telecommunication sector. Under this Porter stated that business have to
maintain a close eye on their competitor but on the other side Michael also encourage as well
as support business to look at their strategies of competitors which may leads in improving
overall performance of the company. Along with this, he also said that there are five forces
that helps in examine the competitive environment that largely impact of business activities
(De Massis and Kotlar, 2014). In UK market telecommunication is fastest growing and
competitive as number of companies provide telecommunication services to customers. In
this context, for effectively analyse the competitive environment, five forces model adopt by
the company which are as follows: Bargaining power of buyers: Under this, consumers are the important and king for
company as it is high power of buyer. As various companies are serve their services in
competitive market place. In this the main reason is that is regulated nature of
industry. As it is big threat for Vodafone, thus it is important for them to make as well
as implement effective policies to attain their set goals and objectives by delivering
quality products and services. This will help in satisfying customers’ needs and wants
in most effective manner (Moseley III, 2017). It directly contributes in capturing the
larger market share from company rivals. Vodafone have unlimited number of huyers
all around the world whom interference required to assess properly. Thus,
management have to assess the bargaining power of buyers power which is relaitively
low in tenure as there are vast number of buyers found in all over the world. Thus,
management need to assess this aspect and maintain and manage their diversified
operations better and in define manner of course. Bargaining power of suppliers: As suppliers are refer to mobile operator as they
provide better infrastructure to established mobile operation in market. As
manufactures are also consider as a supplier for telecommunication companies. Along
with this the bargaining power of suppliers are moderate but it larger affect the

competitiveness of telecommunication industry. In this company easily manage their
working performance in order to established their positive brand image and at the
same time also maintain their high market share. Another thing which requires to
understand by management properly is bargaining power of their suppliers. Vodafone
have diverse number of suppliers which restrict their suppliers to bargaining with
companies (De Massis and Kotlar, 2014). Here, suppliers required to think about each
and every aspect properly where Vodafone could easily switch from their suppliers. Threat of new entrants: In telecommunication industry in UK, threat of new entrants
is significant as the potential growth is very high. In this number of new player are
highly enter in market for operating their business. Thus, it is also a threat for
Vodafone as they have to formulate as well as implement effective plans and
strategies to make their strong place in market. With the help of this company
improve their performance level high as compare to its competitors. This will directly
contribute in establishing positive brand image at market place (Chu, KrishnaKumar
and Khosla, 201). Vodafone found that in telecom sector, there is low threat of new
entries where management could operate properly. Although, it requires huge fund
investment which have to determine by small companies in appropriate frame so that
they could easily working on each adn every aspect better and in define manner. Threat of substitutes: As in telecommunication sector, substitute products and very
high because number of companies also serve same products and services at low cost
as customers are easily switching. For this company have to use new technologies and
ways to produce better services for their customers at affordable cost which will helps
in improving their customers base. Along with this, it is threat for Vodafone company
so that company should adopt effective methods to retain their customers by
providing them better services (Torrent-Sellens, 2015). This will help in capturing
larger market share form its rivals and also grab customers attention as well.
 Rivalry within the market: Under this, competition is very high in telecommunication
sector as number of companies are involve and operate their business to attain
competitive advantages. In this company also use various strategies to improve the
chances of attaining higher profitability level. Along with this, promotional activities
are also needs to allocation of budgetary as it defines level of competition at market
place. On the other side, another element is company also invest money in research