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Vodafone Business Strategy

University: UK College of Business and Computing

  • Unit No: 11
  • Level: Undergraduate/College
  • Pages: 14 / Words 3500
  • Paper Type: Assignment
  • Course Code:

    K/508/0564

  • Downloads: 0
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INTRODUCTION

Business strategies can be defined as high level planning of firms in order to reach to the specific objective. Each entity aims to enhance its profit and sustain in market for longer duration (Harlow, 2016). For that higher authorities prepare effective strategy that helps in gaining competitive advantage and increasing financial performance of the company. Present study is based on Vodafone which has good position in the mobile telecommunication sector. This industry is growing well and over a period of time profit of mobile telecommunication industry has been enhanced to great extent Current assignment will describe PESTLE analysis model with reference to the Vodafone. Furthermore, it will explain concept of strategic capabilities and VRIO model. Study will discuss Ansoff matrix model in order to identify strategic position of the firm. In addition, porter's five forces model will also be explained in this assignment.

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TASK 1

1. PESTLE Analysis

Vodafone is performing well and now it has become the leading telecommunication firm in this industry (Heracleous and Werres, 2016). It has many branches in more than 30 countries. Firm always concentrate on providing amazing services to the consumers so that they feel satisfied. In order to run its operations in smooth manner company emphasis on its external market situations and accordingly makes changes in the existing practices. Pestle analysis model with reference to Vodafone is described as below:

Political factor

Political situations impact on the working of business unit to great extent. Vodafone always prefer to enter into the country where political conditions are stable. It helps the telecommunication firm in running its business in this location in smooth manner. Vodafone is performing well in UK because government of the nation is supporting to the industry. All laws and regulation are in favour of the sector that helps the entity in conducting its operations in smooth manner (Pestle Analysis of Vodafone,2017). India, England, Newbury etc. many other locations where Vodafone is performing well due to stable political conditions.

Economic factor

It is another most essential macro factor that impacts on the overall performance of business unit to great extent (Chathuranga, 2015). If economy condition of nation is good then it helps the Vodafone in attracting new buyers because with the stable economy condition people will get adequate income sources. This enhance capabilities of the population to buy its products and services. On other hand there are many countries where economic condition are not goods. In such condition cited firm has to face huge issues in running operations.

Social factors

It is another macro element that affect external performance of the business unit significantly. Vodafone always look at the life style, preferences, choice of population of particular country (Fasan, 2015). According to their social needs entity offer them products and services. UK is the nation where people like to buy 4 G services, thus entity has started providing them these services. This has helped the entity in enhancing its profit in this country.

Technological factors

Technological advancement helps the firm in raising efficiency of the operations. Vodafone always implements new technologies that helps in offering satisfactory services to the buyers (Florczyk, 2016). Recently it is started providing 4G services to the consumers. This has enhanced sales of the company to great extent. With the changes in technologies, Vodafone also makes changes in its strategies and implement new techniques in workplace so that employees can perform well and can provide satisfactory products to the customers.

Legal factor

Legality impact on the overall performance of the company. Vodafone always follow legislation of each nation that helps the firm in conducting operations in different nations smoothly (Heracleous and Werres, 2016).

Environmental factor

It is another factor of Pestle Analysis that helps Vodafone in satisfying consumers. Company always concentrate on creating positive atmosphere so that people feel happy ad they retain in workplace for longer duration. It follows environmental policies and take care that it can serve better to the society (Fasan, 2015).

2. Ansoff's Matrix

Ansoff matrix model is helpful in identifying strategic position of the business unit in the market. There are many firms which are giving tough competition to the Vodafone. In such condition company has to look upon the strategic position and have to make such strategies that can help in raising its position in the market (Florczyk, 2016). This model consists of four phases

Market penetration

It is the method in which company always sell existing products in the existing market. Vodafone is the leading telecommunication brand that looks upon new opportunities that can support the firm in raising its business performance. Currently it has more than 25000 distribution channels that contribute well in raising profit of the firm (Heracleous and Werres, 2016). If company pay attention on developing existing market then it can help in satisfying consumers well and meeting with their needs.

Market development

It is another strategy that helps the entity in developing its market. Vodafone adopts this strategy and continuously work to enter into the new market. This gives opportunity to expand the business and attracting new buyers. This strategy has make the firm able to work as global entity. It has many branches nationally and internationally. It concentrates on needs of population and accordingly it offers them products and services in the new market. Continuously developing market helps the organization in gaining leading position and gaining competitive advantage in the market (Harlow, 2016). For developing the market Vodafone looks at the effective promotional strategies and enter into new market.

Diversification

It is the type of strategy in which organization has to concentrate on selling different products in different market. This diversification reduces risk of the firm and helps the entity in gaining success in new market. Diversification enhances supply chain system of the Vodafone and it can help the corporation in increasing its profitability. Recently Vodafone has launched new machine service platform (Chathuranga, 2015). With the help of these products many firms are able to manage their wireless system. This has increased demand of Vodafone in the market and it has become able to attract new corporate customers as well.

Product development

It is the type of strategy in emphasis on developing new products that can satisfy needs of existing buyers. Vodafone is performing well in UK and many other countries. It collects information about needs of clients and accordingly offer them products and services. If it develops its products and sell it to existing buyers then it will help in creating positive brand image and making people loyal towards the brand. Vodafone has started providing 4G network services to its existing consumers (Florczyk, 2016). This has retained customers in the firm for longer duration. Network that provides by the firm is good as compare to other organization. Thus, this gains attention of other buyers as well that supports business unit in increasing number of consumers and gaining competitive advantage as well (Chathuranga, 2015).

TASK 2

1. Strategic Capabilities

Strategic capabilities are the significant feature of business unit that describes ability of the organization to fulfil needs of consumers. Strategic capabilities make the company different from other competitors. Each firm makes some strategies that helps in strengthening their capabilities and minimizing their lacking points. It supports entities in gaining success and sustaining in the market for longer duration (Harlow, 2016). Capabilities are such strong points that make the firm able to expand their business and create positive brand image in the mind of customers.

Investors like to invest in such firms which have strong capabilities to earn more profit. If organizations are unable to satisfy investors then they will not in vest in the organization. Strategic capabilities attract investors and they invest huge amount in the organization in order to gain high return over it. Strategic capabilities of business are such as employees, managers, financial resources, visibility of the firm etc (Fasan, 2015). All these aspects create unique brand image in the mind of investors and they make decision to in vest amount in the organization. Vodafone is the successful telecommunication brand. Company always concentrate on their employees. It treats them well and provide them positive workplace environment so that they feel happy. This helps the company in retaining skilled people in workplace for longer duration and making them loyal towards the brand. These talented people contribute well in the success of business unit and support in providing quality services to clients. Entity trains them so that they can enhance their skills and can perform well in the entity (Florczyk, 2016). Financial resources of Vodafone is another capability of the firm. It utilizes its monitory resources well. This helps the firm in minimizing expenses and enhancing revenues of business unit. Strategies to manage resources of the business play significant role in the success of the firm. Vodafone has effective strategies that has helped entity in managing its resources well and minimizing wastage. That is why Vodafone has become able to expand its business in many countries successfully. This strategic capability of the firm has supported in raising its band image in the market.

2. VRIO/VRIN Model

It refer with evaluation of Vodafone company resources, it complements the PESTLE analysis method, which is used by marketers to analyse the macro environment forces so this VRIO is related with assessment of internal resources of business, it is helpful for improvement of all internal resources with effective this company particular area (Shanbhag, and et.al 2016). Some characteristics are this model given below.

Value: It is consisted with that valuable resources which is high competitive advantage, Vodafone obtain their products but it is not easy to acquire their product are equally.

Rareness:Vodafone resources are available to all competitors they provide their services in rarely.

Imitability: It is related with Vodafone an ideal resources it cannot be obtained completing their work.

Non substitutable: This company ideal resource cannot be utility by any other resources.

3. Strength and weakness of organization

Strength: Vodafone is very famous all over the world, it cover large number of distribution channel and various types of covers. This organisation generating billions of dollar of revenue every year. 2016 they generate their total revenue 87.3 billion dollars. So this firm boosting the all over the market . This firms time to time again comes out with greater campaign at the right time for increasing their sales. They sale their services in premium cost, this organisation providing their services is differentiating rather tan other telecom operators. They have massive subscriber which they retain their business in 2016 the total number of subscriber of this firm across the world was close to 250 million customers (Stonehouse, and Houston, 2013). The brand value of this company is 28 billion dollars in 2016 so they focus on their product quality. It is impossible for other telecom industry, so they maintain their brand equity and the brand recalls.

Weaknesses: the main problem of Vodafone looking at whole world market scenario, they have need to strength its core values and follow strategies to obtain more customers (Shanbhag, and et. al, 2016.). They dropping brand valuation and they also losing market share in their USA and performance is very bad in Europe they loose their work performance they do not generate more revenue from its home market in fact if they look their revenue. They do not concerted on their business in effective ,manner so they why they decreasing their performance . 

TASK 3

Five Porter’s forces model

  1. Bargaining power of buyers: it refers to the buyer power are the size and focus on customers, Vodafone use these forces in efficient manner. Buyer power is one of the horizontal forces that influences the value of this firms (Shavarini, and et. al., 2013). They focus present number of unique product, small suppliers such as small market supplying their product in small enterprise. This force is related with high number of player in the market and also few people.
  2. Bargaining power of suppliers: it is focus on relative size and focus of suppliers relative to Vodafone industry, this company take part and it is second degree of unique input supplied. The ability of this firm they charge their consumer in different prices with difference value. This company raising their product price through this forces , providing low qualities of services the reducing the availability of their services (Shavarini, and et. al., 2013). This organisation makes strong supplies they helo to their firms more competitive and decreasing profit potential for the customer. This is very important method to increasing the buying power in their target market.
  3. Threats of new entrants: it consists with the new competitors enter in existing market or company. Vodafone firms will attract more competitors to looking to earn more profits , it is easy way anyone enters in new market but it is not easy for competing suddenly with lot aue competitors so it is very complex. Large number of competition help to increased business productivity and increasing customer demand. The threat of new entrants porter creating many effects like existing competitors and influences the ability of old product. If any company enter in market so it is very challenging other company to competing market compitions.
  4. Threats of substitutes: substitute product is one of the same mean some time Vodafone offer similar offer as comparison other telecommunication company like same types of recharge, services also in same prices (Stonehouse and Houston, 2013). There are many reasons in which the threat of substitutes help to making stronger than usual. Switching cost it this industry switch their cost of product there are so several chances to explore their services. If they reduce the price of product so more consumer purchase their products but in case if they are increasing their price so lot of client are not ready to buying this institution product. This company also focus on product quality if they want higer sales so they maintained their product quality.
  5. Rivalry within the market: it is refers with Vodafone industry large number of competitors, they increase their market share through using this model. The intensity of rivalry will be increasing so this organisation will also high their growth. They maintain their brand loyalty in effective manner, if this firms produce lot of product capacity will have greater rivalry among challenger (Qiang, 2014). Some time this model decreasing small number of product in this industry. This company also the market leader and it is fast growing firm at fixed low cost. This enterprise product service are very different as comparison other firms. This model main motive to earn more profit with providing the best product services, reasonable rates and build-up their relationship with number of customers. This company has achieve the market strategies that has helped to managing its resources. This strategic ability of the organisation has supported in raising their services in the market. It is very useful for attaining the more profit.

TASK 4

Using Bowman’s strategy clock model, analyse the strategic direction of Vodafone organisation

Vodafone using Bowman's strategy clock model, it shows the company markeing position in comparison to offering other competitors. It is following some strategies positions is given below.

Positioning 1: low prices

it refer with the segment of particular options and Vodafone apply effectively cost to selling their product and continually attracting new and potential consumers. This organisation will not win any client loyalty without produce their qualities product (Shavarini, and et. al., 2013). if this industry are not focusing product qualities so they cannot achieve their target easily. So they concerted on product or services for maintain their position in market with effective price.

Position 2: low prices

Vodafone select many options for their product or service when it will be low cost the organisation operate under this scheme its profit margin will become very down. So this firms need to increasing their sales volume for long run businesses (Shavarini, and et. al., 2013). If this enterprise at low cost leader so they have large size of sales volumes or strong strategies for its product positions.

Position 3: Hybrid

it is referred to the if company interest to provide the offer the service at low price but offer of product with higher perceived value than other low cost challengers (Omar, and et.al, 2013). In this Strategies volume is an problem but they maintain their company reputations of offering fairs prices for their good an service.

Position 4: Differentiation

Vodafone company focus on their product or services, they provide their service to the customer in different types the aim of this organisation to giving the best service their client in order to differentiating product means variety of services at low prices so this firms increasing their sales volume and providing customer satisfaction (Hill, and Schilling, 2014). So they focus on their service in effective manner.

Position 5: focused differentiation

Vodafone also focus on company service offer in high detected the value of product opposite high rates. These strategies adopted by the consumer buy their product or services based on perceived value individual. If consumer trust in their service so they have to maintain their beliefs (Qiang, 2014). The firms adopt these strategies operate in highly targeted market and gain high amount.

Vodafone implements this method it helps to increasing their sales volume and they are obtained more profit. This method is very help full for selling good and services and it is also helped to find out the competitive edge and fulfil customer needs. This industry also following some strategies for maintaining company position (Harrison and John, 2013). So at time Vodafone company position is good and they focus on how to achieve their goal of the business for increasing their market product or services position. If they are not focus so company face many problems decrease their product qualities, reduce their cost, no any customer are ready to buy their services, so it is very important aspect to use relevant strategies for stability in their position rather tan other companies.

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CONCLUSION

It can be concluded that the various types of strategies, implements and evaluating all the decision of Vodafone company achieve their goal with long run business. It also includes this file impact of macro environment of this company and its business strategies also. It also explains the pestle model for analysis this organisation. This file also use Ansoffs growth Vectors matrix. This file also included the strength and weakness of the company. It also evaluating the bargaining power of buyers, suppliers, new entrants, threats of substitutes and rivalry within market. This firms main motive to maintain business strategies with effective manner and achieve the goal of the organisation and established the customer relationship got long run business.

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REFERENCES

  • Harlow, H. D., 2016. Vodafone Egypt (B), managing corporate cultural change and organizational performance. Emerald Emerging Markets Case Studies.6(4). pp.1-17.
  • Heracleous, L. and Werres, K., 2016. On the road to disaster: Strategic misalignments and corporate failure. Long Range Planning.49(4). pp.491-506.
  • Chathuranga, D., 2015. Analysis of the impacts of Merger and Acquisition on business development in Telecommunication industry in India: Case study of Vodafone & Hutch (Acquisition) and Indus & Bharti Airtel (Merger).GRIN Verlag.
  • Fasan, P., 2015. Defining a Strategy to Achieve Sustainable Operational Excellence in the Afghan Telecommunications Sector.
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