Vodafone UK Business Strategy: A Comprehensive Analysis

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1BUSINESS STRATEGY OF VODAFONE
Business Strategy of Vodafone, UK
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2BUSINESS STRATEGY OF VODAFONE
Table of Contents
Introduction................................................................................................................................3
Task 1: The external environment..............................................................................................3
Pestel model for the environment analysis.............................................................................3
Ansoff’s growth vector matrix to analyses the strategic positioning.....................................5
Task 2 Organisation’s internal environment and capabilities....................................................7
VRIO analysis........................................................................................................................7
SWOT analysis of Vodafone, UK..........................................................................................8
Task 3: Analysing the telecom sector......................................................................................10
Porters five forces analysis...................................................................................................10
Stakeholder analysis.............................................................................................................11
Balance scorecard to know the competitive edge of Vodafone...........................................13
Task 4 Acknowledging strategic directions.............................................................................15
Vision and mission of the company.....................................................................................15
Company’s objectives..........................................................................................................15
Strategic choice....................................................................................................................15
Bowman’s strategy clock model..........................................................................................15
Porter’s generic strategy.......................................................................................................17
Competitive analysis............................................................................................................18
Tactics chosen by the company............................................................................................18
Evaluation, monitoring and controls....................................................................................18
Conclusion................................................................................................................................18
References................................................................................................................................20

3BUSINESS STRATEGY OF VODAFONE
Introduction
Telecommunication is one of the biggest gifts given by technological science to the human
society. It has eased communications through facilitation of communication with the help of
chain of networks. Telecommunication has reached almost in every country and regions,
including United Kingdom (Ghezzi et al. 2015). UK is one of the most developed countries
of the world. The usage of telecommunication within UK has been increasing day by day,
which has empowered various telecommunication industries such as Vodafone. Due to rise of
telecommunication in UK, competition has also increased for Vodafone Company. The
following report has thus highlighted the business strategies of Vodafone in the
telecommunication sector of United Kingdom.

4BUSINESS STRATEGY OF VODAFONE
Task 1: The external environment
Pestel model for the environment analysis
Vodafone is one of the leading mobile companies with a significant marketing in the region
of UK. Strategy observed by Vodafone is to look at the future within confidence. In order to
make the activity of telecom sector successful, Vodafone adapts a strategy that might be
driven a comprehensible mission in the region of UK (Chen et al., 2012). To understand the
environmental analysis, PESTEL is taken into consideration.
Factors Description Affect
Political  UK markets are extremely controlled and expensive
in terms of telecom sector.
 Government has not allowed any telecom sector to
enter the market.
 Vodafone has to take the permission for entering
the market
 Vodafone has to obey the communication law as
they build the brand image in UK (Bharadwaj et al.
2013).
Negative
Economical  During the recession time, the market has been
affected hugely as the customers are not able to buy
any product
 Vodafone has to change their activity related to the
recession time and attract the customers to buy a
phone
 Competition between the Vodafone and local
telecom servicers is high. The company requires
using the latest technology to cover the whole
market (Amit and Zott, 2012).
 The inflation rate is 4.0% in UK market, which has
also affected the buying behaviours of customers.
Thus, Vodafone has to reduce the product price as
customers may buy easily.
Positive
Social  The education level would be between 90 to 95%
as the people take a proper decision in UK
 Company has to target the people and fulfill their
demands, as the company will be successful within
Positive

5BUSINESS STRATEGY OF VODAFONE
UK market (Connor and Lande, 2012).
 In the technology world, it is really hard for the
company to convince their customers as they give a
better product than others
 UK market has always changed according to the
latest technology , which has also affected to the
Vodafone strategy and customer level
Technological  Several technological advancement have occurred
within the logistical and production unit within
industrial sector
 Vodafone has to give the latest technology to their
customers and convince them to utilize the
technology like 3G and 4G
 Customers are always looking for a navigation
support handset so it would be good point for the
Vodafone to enter in UK market (Khalili Shavarini
et al., 2013).
Positive
Environmental  Environmental law gives heavy penalties on the
telecom sectors as Vodafone has to control their
production
 Several measures have to be controlled when
packing the products
Negative
Legal  Employment law and labour are very strict in the
region of UK
Negative
Table 1: PESTEL Analysis
(Source: Learner)
Ansoff’s growth vector matrix to analyses the strategic positioning
In case of Vodafone, Ansoff’s matrix supports the company to examine the product strategy
in the recent competitive market. It also helps the company to assess the economical abilities
for making progress in their business within UK market (Figurska and Matuska, 2013). By
using the Ansoff matrix, the company will take proper business strategies to develop their
place in the market. In order to evaluate the product strategy, Ansoff matrix would be an

6BUSINESS STRATEGY OF VODAFONE
efficient tool as it estimates 4Ps of marketing mixture and allows the company to take
balanced decisions. Ansoff matrix for the strategic position of Vodafone is followed:
Market penetration
 Vodafone uses its products within the
existing market
 The company is focusing to enlarge its
market share with a market penetration
strategy
 Employing a market penetration plan by
giving introductory costs and enlarging
their promotion and distribution efforts
Product development
 Vodafone would invest in R&D to make
the new items to enter in the existing
market
 Acquiring a product for the competitors
and merging the sources to make a new
item
 Strategic partnership with other
companies like IDEA to obtain access
every distribution channel
Market development
 The firm owns a proprietary technology,
which may leverage into new markets
 Customer are profitable in the new
market
 Making products accessible in several
formats to enlarge the sales
Diversification
 There may be potential synergies as
Vodafone has to realize between the new
product and existing business
 Include navigation products for wide
range of people
 Customising the products, which may
include wide range of items for the
people in UK
Table 2: Ansoff’s growth vector matrix for the strategic positioning
(Source: Learner)

7BUSINESS STRATEGY OF VODAFONE
Task 2: Organisation’s internal environment and capabilities
VRIO analysis
The strategic abilities and capacity of Vodafone can be evaluated with the help of a strategic
analysis framework of VRIO. According to Al-Debei et al. (2011), this tool will also help in
assessing the ability of the organisation to adapt the environmental changes occurring in the
business environment of Vodafone. Through using this strategic tool, the opportunities as
well as the missing essential factors in the business environment of Vodafone can also be
evaluated effectively. This in turn will help the organisation in expanding its business within
the telecommunication sector of United Kingdom and thus Vodafone will be able to tackle
the competitive rivalry offered by other telecommunication companies present within in
United Kingdom.
The term VRIO is an abbreviation, which denotes the terms Value, Rareness, Imitation and at
last Organisation. The outcomes of the application of VRIO analysis framework over
Vodafone are depicted in the table mentioned below.
Capability or
resources
Value Rareness Imitability Organisation Competitive
advantage
Accessibility
to capital
Yes No No No Competitive
parallelism
Price
strategies
Yes No, as similar
kind of price
strategies are
used the rivals
in UK.
Yes, pricing
strategies are
most
commonly
imitable.
No Temporary
competitive
advantage
Flexibility in
supply chain
network
Yes No Supply chain
are similar to
some of the
competitors
Optimum
utilisation of
this resource
has been made
by the
organisation.
Sustained
competitive
advantage
Network
capability
Yes Yes No Yes Temporary
competitive

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advantage
Local and
global
presence
Yes Yes Yes Yes Sustained
competitive
advantage
Brand
awareness
Yes Yes No, it is not
easy to imitate
the brand
awareness of
the
organisation
Optimum
utilisation has
been made by
the
organisation.
Sustained
competitive
advantage
Leadership
vision
regarding the
upcoming
challenges
Yes No It is difficult
to imitate the
leadership
vision of the
organisation.
No, proper
utilisation has
not been made
by the
organisation
yet.
Potential
competitive
advantage
Table 1: VRIO analysis
(Source: Learner)
Through the above VRIO analysis framework of Vodafone, the strategic capabilities
possessed by Vodafone can be acknowledged in an effortless manner.
SWOT analysis of Vodafone, UK
Now, there are some weaknesses and strengths, present in the business of Vodafone in the
telecommunication sector of UK. Therefore, Baines and Shi (2015) have stated that these
strengths and weaknesses of the organisation need to be identified and analysed effectively.
Therefore, in order to asses these factors along with the threat and opportunities present in the
business environment of the organisation, SWOT analysis framework will be brought in use
and will be applied on Vodafone, UK.
Strengths of Vodafone Weaknesses of Vodafone
 Vodafone has integrated chain of  Vodafone has been finding it difficult to
sustain customers in its long-term

9BUSINESS STRATEGY OF VODAFONE
subsidiaries under its flagship.
 Vodafone has broad coverage on media.
 The company possess high level of brand
awareness and provides superior services
to its customers (Pagani, 2013).
 Vodafone has made its successful
presence over social media websites.
 Company performs attractive and unique
advertising through cartoon characters.
commitment strategies and plans.
 The prices for fixed line and broadband
services provided by Vodafone are
higher.
 Vodafone has been facing issues in
provision of services in rural regions of
United Kingdom.
 The customer base of Vodafone has been
facing a slight decline.
Opportunities for Vodafone Threats for Vodafone
 Vodafone has the opportunity of
developing more advance and new
mobile network technologies.
 More investment can be done for
generating high amount of revenues.
 Introduction of 5G network can
facilitate rapid growth of Vodafone in
the telecommunication market of
United Kingdom.
 It has threat from its competitors such as
O2, Virgin, and BT etc.
 Negative effects on finance and economy
due to Brexit
 Vodafone has major dependence on
European market.
 Profit margins and revenues have been
facing substantial drops in them.
Table 2: SWOT analysis of Vodafone, UK
(Source: Learner)

10BUSINESS STRATEGY OF VODAFONE
Task 3: Analysing the telecom sector
Porters five forces analysis
For any telecom sector, several factors are impacted on the business strategy of that company.
In order to analyse the influence of such aspects Porter’s five forces may be used. It is a
holistic strategy, which took strategy choice away from just analysing the recent competition
(Alsudiri, et al., 2013). Porter five forces aim on how Vodafone may develop sustainable
benefits in UK’s telecom sector. The analysis of competitive forces of Vodafone is given
below:
Threats of new entrants- In the telecommunication sectors, new entrants brings new ways,
innovation of doing the things and put pressure on the Vodafone company. Thus, the
company has to low the pricing strategy, decrease costs and provides new value propositions
to their customers in UK. Vodafone has to manage all these challenges and make efficient
barriers to secure its competitive edge (Danciu, 2013). In this context, company has to build
the capacities and use the money on R&D to deal with the competitors. It significantly
decreases the strange profits for the new companies like Vodafone. Thus, a threat of new
entrants is low.
Bargaining power of the suppliers- As opined by Jocovic et al. (2014), all the sectors are
purchasing their raw materials from the suppliers in UK. Powerful suppliers utilize their
negotiating power to extract high costs from the companies in telecommunication field. In the
region of UK, Vodafone may develop effective supply chain with different numbers of
suppliers. For being a famous company, Vodafone operates with better margins than its
rivals do. It enables them to absorb the prices increases from its suppliers than the
competitors. The overall effect of bargaining suppliers is low.
Bargaining power of buyers-As noted by Švárová and Vrchota (2014), buyers are often
demanding lot from the company. They desire to purchase the best products in accessible
price. This put lots of pressure on Vodafone in the long run. By developing a huge base of
customers, it would decrease the bargaining power of buyers and give a benefit to Vodafone
to rationalize its production process and sales. The company will also focus to produce
innovating items. New products will decrease the deflection of existing consumers of
Vodafone towards its competitors. Thus, bargaining power is very high in terms of
customers.

11BUSINESS STRATEGY OF VODAFONE
Threat of substitute products- As per view of Beckmann et al. (2014), many products of
renowned brands contains of harmful chemicals, which may interfere on the health of
customers. As an outcome, Vodafone faces threat of substitute from the several products. It is
quite high if it provides a value proposition, which is uniquely dissimilar from the recent
offering of telecommunication sector.
Competitive rivalry- In UK, there is several well-known telecom sectors as they make
constant development regarding innovation in their items. Some of the notable competitors
for Vodafone include Airtel, JIO. Vodafone operates within a very competitive
telecommunication sectors. This competition does take toll on the entire long-term
profitability of the company. Thus, rivalry power is high (DeFillippi and Roser, 2014).
From the above discussion of Porter’s analysis, it is clear that competition rivalry between
telecommunication industries is extremely high. Additionally, as consumers are the major
stakeholders in this sector, it is necessary for Vodafone to provide their items regarding to
their needs and demands. In this context, suppliers play main role to give the raw materials
and packaging components for the products. It is clear that Vodafone has to maintain the
proper connection with them to gain the competitive edge (Schaltegger et al. 2016). On the
behalf of company, a new entrant threat is quite low. It is also necessary for the company to
adopt several strategies, which may properly adhere to impact of these forces on the product
sales.
Stakeholder analysis
Stakeholder analysis gives a way of mapping the business strategy to Vodafone in UK
market. The company utilizes the choices of most powerful stakeholders to structure the
projects in early stages. As argued by Belás et al. (2015), it supports the organisation to
develop their quality in current situation of the market. Powerful stakeholders may support
Vodafone to get more resources than the competitors. By connecting with stakeholders early
and often, Vodafone may ensure that they know what company will do and fully recognise
the advantages of company’s project. This indicates that they would like to help the company
when it is necessary. Vodafone may recognize the conflict situation by using the stakeholder
analysis. As outlined by Dyllick, and Muff (2016), stakeholders are playing an important role
to determine the success of Vodafone. Stakeholder analysis of Vodafone is given below:

12BUSINESS STRATEGY OF VODAFONE
Stakeholders Nature Roles Impact
Managers Inner In case of Vodafone, managers
have the huge responsibilities.
They have to control all the
employees and take the proper
decision in terms of employee’s
engagement.
High
CEO and Senior
managers
Internal CEO and senior managers are in
the highest position. They
support the managers in case of
organisational strategy. However,
they play significant roles in
several areas like decision-
making policies, products
launching and adoption of new
business models for the company.
Medium
Employees and
workforce
Internal They are one of the important
aspects for the company.
Employees support company in
producing new items, their
advertisement policies and sales.
They are mainly controlled by the
managers and leaders. Leaders
are motivated their employees by
giving several rewards, respects
and incentives. They perform
according to the rules and tasks
set by the managers in Vodafone.
Medium
Suppliers External Supplier’s connection has
become so essential within
effective business management.
Company has to maintain the
better connection with suppliers
as they gain the competitive edge
Medium