Vodafone Strategy

5 May 2017

Task 01 In this case of strategy formulation for a selected organization, I have selected Vodafone Group PLC which is the world’s leading mobile telecommunications company, with a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through the Company’s subsidiary undertakings, Joint ventures, associated undertakings and investments.

At 30 June 2010, based on the registered customers of mobile telecommunications ventures in which it had ownership interests at that date, the Group had 347 million customers, excluding aging customers, calculated on a proportionate basis in accordance with the Company’s percentage interest in the seventures. The current mobile market competition is very tight so that to survive in the market, the strategy which we prcatice is very important. Let’s discuss what is Strategy and strategic management.

Vodafone Strategy Essay Example

As Johnson and Scoles defined strategy is the direction and scope of an organizaion over the long term which achieves advantage for the organization through its configuration of resources within changing environment to meet the needs of arkets and to fufll statkeholder expectations. Strategic management is the development, implementation and control of agreed strategies. There is more to strategy than merely deciding what you want to achieve and how you are to achieve. Corporate Strategy is concerned with what types of business the organization in.

It denotes the most general level of strategy in an organization. Business Srategy is how an organization approaches a particular product market area. It can involve decisions such as whether to segment the market and specilise in particular rofitable areas, or to compete by offering a wider range of products. Some of the large companies cannot operatre under one strategic business unit so that, these firms have diversified Strategic Business Unit (SBU) dealing with paricular areas. So, Business Strategy for such large organizations is startegy at the Strategic Business Unit (SBU) level.

In the case of Vodafone, it has the network over the world and its main product is telecommunication network. When we consider this telecommunication network service providers, its direct competitiors are T-Mobile, and Orange. The goal of the shareholder’s is maximizing their wealth and profitability. This is known as very basic goal and every shareholder may have different goals and objectives. As we know who are the shareholders? Groups or individuals whose interests are directly affected by the activities of a firm or organization are stakeholders.

In the case of Vodafone PLC, there are lots of stakeholders and their expectation is to survive in the market and increase the earning per share (EPS). We can classify the shareholders as follows; * Internal Stakeholders – Vodafone Employees, Management * Connected – Vodafone Sharehoders, its customers, suppliers and lenders. stakeholder groups can exert influence on strategy. The greater the power of a stakeolder group, the greater its influence will be. Each stakeholder groups has different expectations about what it wants, and the expectations of the various groups will conflict.

To some extent, the expectations of stakeholders will influence the organization’s mission. As mentioned above, the employee’s expectations will be expecting high level salary, quick promotions, incentives and Job security. When we look into the environment of Vodafone Group PLC, there are various participants such as internal group and external group. A large part of business strategy consists of making the organization’s interaction with its environment as efficient as possible. The degree of uncertainity in the environment is of great importance.

The great uncertanity is a challenge to the strategic management and uncertainity depends on complexityand stability. PEST analysis. As we know the environment is divided into micro environment and macro nvironment but, we consider more on macro environment and to drill down it we can do PEST analysis. That is the general environment relates to PEST factors in the environment affecting all organaizatins. * Political – Legal factors * Economic factors * Social and cutural factors * Technological Factors Political – Legal factors The political environment is not simply limited to legal factors.

Existing Government policy affects the whole economy, and governments are responsible for enforcing and creating a stable framework in which business can be done. The recent time 2009/10, e were able to see that government power has changed and the economy recession. Political risk in a decision is the risk that politoical factors will invalidate the strategy and perhaps severly damage the firm. Legal factors affect the particular industries such as telecommunication, electricity, gas and other services subject to regulators who have influence over market access, competition and pricing policy.

Economic factors It is very important because it influences at both level national and international level because the world economy decides the national economy. The recent economimc recession is the best example for it. And also, othe economic factors such as economy growth, inflation, exchange rate, overseas market, capital flows and trade, telecommunication local trend, interest and tax rate, business cycle and government spending are influencing the industry.

Social and cultural factors The following factors influence the industry such as population growth, rate of mobile users, age limit, geography, social family structure, empoyement rate, wealth and willingness of people to use mobile. The conduct of the company, its management, nd employees will be measured against the ethical standards by the customers and other members of the public with whom they deal. Technological factors In the fastest growing world, the role of technology becomes as an essential for our day to day life because that much it has taken part in the life cycle.

In the case of Vodafone PLC, they do not manufacture anything and source from third party with latest updations. The word technology is used to mean three rather different things * Technique * Organization This technoogy contributes to Vodafone to overall growth and with the help of latest echnology Vodafone is able to increase total output in following ways; * Gains in productivity * Reduced costs * New types of product at chepest cost The five forces model provides a comprehensive framework for analysing the competitive environment.

Such factors are as folows; 1. Potential entrants 2. Bargain power of customers 3. Bargain power of Suppliers 4. Threats of substitute and 5. Rival. According to this five forces analysis the position of the Vodafone organization is very tight competition and threats of new products are more at lower price so, it is in a osition to introduce new product to manage its competitors and keep the customers loyal. Task – 02 Task – 03 To select alternative strategies, we shoud do some more analysis and bring them in to practice.

The most common way of doing this is to analyse the factors into strengths, weakness, opportunities, and threats. We can call this as SWOT analysis and this is assessment of strengths and weakness, opportunities, and threats in relation to the internal and environmental factors affecting the entity in order to establish its condition prior to the preparation ofa long term plan. If we identify the strengths and opportunities properly, then we should convert them in to new strategy formulation.

Weakness and threats should be converted into strengths and opporturnities rerspectively. We should match the strength with the available opportunities because strength which do not match any available opportunity are of limited use wile opportunities do not have any matching strengths are of little immediate value. The conversion requires the development of strategies which will convert weakness into strenghts in order to take advantage of some paricular pportunity, or converting threat into opportunities which can then be matched by existing strengths.

Same as this corporate analysis, there is GAP analysis which compares the organization’s targets for achievement over the planning period and what would the organization be expected to achieve if it carried on in the current way with the same products and selling to the same markets, with no major changes to operations. To develop a new strategy we can use the following ways. 1 . Generic Competitive Strategies 2. The Strategy Clock 3. Value Chain differntiation and focus on both.

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