Vodafone telecommunications analysis
Abstract This study is based on Vodafone telecommunications. It gives an introduction to the company and provides background information on the business resource management. The report then clearly defines the external and internal factors (business environments). The main body of the report describes the aspects of the business management including microeconomics analysis and evaluation of the business management aspects. The study is attempts to analyse and evaluate two areas of resource management.
Human resource management is one of areas, another area will be marketing. This study is relevant to the world of management users, and gives the opportunity to be involved in a report that will result in a feasible analysis for one of the largest telecommunications company in UK and the world. The information provided in the report was collected through different sources. Experience, secondary data were used. Contents Abstract1 Contents2 Table of Figures2 1. Introduction3 1. 1 Market and Size3 1. 2 Competitors Analysis4 1. 3 Business Environment Analysis5
1. 3. 1 External Analysis (PEST)6 1. 3. 2 Internal Analysis (SWOT)7 2. Vodafone Management aspects8 2. 1 Human Resource Management8 2. 2 Marketing10 3. Recommendations12 4. Conclusions12 5. References14 6. Bibliography14 Appendix15 Table of Figures (Diagram 1 Growth of Vodafone)3 (Diagram 2 Total customers worldwide)4 (Diagram 3 Market Share)5 (Table 1 PEST analysis)6 (Table 2 SWOT analysis)7 (Diagram 1 Vodafone Market Mix (4 P’s))10 1. Introduction Vodafone made the UK’s first mobile call at a few minutes past midnight on the 1 January 1985.
Within nineteen years, the network would become the largest company in Europe and the largest of its kind anywhere in the world. By the turn of the century, almost every second UK citizen would have a mobile (one third of them a Vodafone). And with a 50% increase in customers over just the last 12 months, new generations of technology in the pipeline, and mobile communications-hungry people around the world, there seems little reason to suppose the next fifteen years will be any less dramatic. 1. 1 Market and Size
Vodafone Group Plc provides a wide range of mobile telecommunications services, including voice and data communications, and is the world’s largest mobile telecommunications company, with a significant presence in Continental Europe, the United Kingdom, the United States and the Far East through the Company’s subsidiary undertakings, associated undertakings and investments. The company operate in 29 countries worldwide. The following diagrams show the growth in the company turnover, profits and customers for years 2000-2003 (see Appendix A). (Diagram 1 Growth of Vodafone) (Diagram 2 Total customers worldwide)
The company had a total market capitalisation of ? 86 billion, which making it the second largest company in the financial times stock exchange 100 index, and the eleventh largest company in the world based on the market capitalisation at 23 May 2003.  1. 2 Competitors Analysis Vodafone is a mobile service global company and have competitors worldwide, the UK telecommunication market (the parent company) have been considered, there are four main operators include Vodafone, Orange, O2 and T-Mobile. The market is supported by a fast-growing services sector, driven by new technology, employing around 200,000 people with a turnover of ?
19bn. As shown in the diagram below Vodafone has the largest overall share of retail revenues, with 34. 4% of the total market in 2001/2002, compared with the 26. 4% share held by Orange. O2 had a 22. 3% share and T-mobile was in fourth place with 16. 9%. Vodafone take the differentiation advantage to be the market leader in all three market sectors, calls and fixed charges, short message service and connection.  (Diagram 3 Market Share) 1. 3 Business Environment Analysis Important forces outside and inside Vodafone’s immediate markets and competitors will shape its operations and thrust.
These analysis (PEST and SWOT) aims to provide a detailed understanding of the characteristics of the company. The focus that a PEST analysis produces is that it shows which external factors are influencing Vodafone, and there is a SWOT analysis which looks at internal to business and external to business within the same market factors. 1. 3. 1 External Analysis (PEST) The external environment of Vodafone can be analysed by conducting a P. E. S. T analysis. This is a simple analysis of the company Political, Economical Social and Technological environment (see table 1) for further information (see Appendix B).
PoliticalEconomic •The tax policy change upon the region of the company •Political stability •Employee laws •Developing countries privatising monopolies •Extent of regulation/deregulation •Free trade agreements •Networks in 29 countries worldwide and leadership in mobile phone •Growth for global market •The interest rate management policy has remained unaffected by the acquisitions completed during the financial year •They are the most successful company in the FTSE 100 •Communicate the brand values to consumers through marketing that is sensitive to cultural considerations and concerns around the use of mobiles
SocialTechnological •Provide comprehensive training for the right people •Give scholarship for the community •Taking new responsibilities and developing new ways of working •Establishing health and safety courses for the employee •Over 296 million customers worldwide •The employees work in group teams •Network energy use has increased due to the growth in the business •Use systems less potent ozone depleting gas •ensuring that health associated with the use of handsets and radio base stations •Encourage the suppliers to adopt high standards •Guarantee greater and faster quality than anyone
•Develop new smart, small device with wireless connectivity •Information technology continues to become cheaper and have more practical applications •Provide fast transmission of all sources of data, including voice, written communications, and video information (Table 1 PEST analysis) 1. 3. 2 Internal Analysis (SWOT) The SWOT analysis provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment. Environment factors internal to the firms classified as strengths (S) or weaknesses (W), and external to firm classified as opportunities (O) or threats (T).
The following table shows SWOT analysis for Vodafone: StrengthsWeaknesses •Strong brand name and leadership in mobile market •Good reputation among customers with market share of 34. 9% •Spread worldwide in 29 countries •Ensure fast, flexible and quality for the customers •Experienced and innovative company officers •Provide the same service from the other companies •Lack of marketing capability •Low profitability of certain tariff •Perceived high cost of electricity in the network stations OpportunitiesThreats •A growing market (increase new customers) •Specialised in network design
•Availability to work with other network •Sponsor other companies •Open market•A growing amount of advertising and business inroads by outside regional and national firms in the local and international area •The 3G mobile phone network face a new rival 4G (Table 2 SWOT analysis) 2. Vodafone Management aspects Vodafone has different aspects to investigate; each of these aspects was a factor for the company success. Analyse these aspects help Vodafone to monitor the improvement of service and to get an overall picture of the organisation. Below human resource management and marketing will be analysed and evaluated. 2.
1 Human Resource Management In 1999, Vodafone merged number of companies’ subsidiaries into one and became Vodafone. It became evident that there were many different systems and procedures in place for activities such as recruitment. The Vodafone team was working hard to resource 3000 recruits each year. Vodafone’s re-sourcing strategy is to ensure it becomes the most effective recruiter in the telecommunications market within two years. Vodafone aimed to: •Establish a re-sourcing centre which operated as an internal agency to proactively manage recruitment for Central Services, Technology and Customer Management.
•Create a single recruitment management platform, including an integrated candidate database. •Control costs effectively by reducing the reliance on agencies and maximising the value of Vodafone’s employment brand to attract candidates direct.  There was limited infrastructure to support re-sourcing activity and the HR teams relied on manual processes to deal with the large volumes of applications. The candidate experience of the recruitment process was not always positive, due to the lengthy process.
The Internet was a good source of candidates, although there was no technology platform in place to manage the online candidates through the selection process. Vodafone aligned recruitment to the business’ web centric vision and further use of the award winning career website was encouraged. A large proportion of activities focussed on promoting Vodafone’s employer brand and driving candidates to the website to encourage them to register online. Vodafone next created a ‘talent bank’ a database of everyone who has applied to work at Vodafone.
The key benefit of the database is that it allows Vodafone Re-sourcing team to proactively discuss job opportunities with people who have an expressed interest in working at the company. This direct sourcing of candidate via the webcentric strategy, and the resulting cost savings, has been the biggest success for Vodafone: •A webcentric recruitment strategy which cuts cost per hire by at least 40% •Recruitment expertise from Vodafone personnel, reducing fixed headcount and overheads •The percentage of candidates recruited via agencies has dropped to less than 25% •A more cost effective re-source of interim managers
•A manageable number of recruitment agencies to work with and build quality relationships with favourable commercial terms •Creation of a proprietary ‘talent bank’ which has helped to reduce time to hire. The human resource management established plan for two years of training for the employees, the department obtain the workers for recruitment and selection, employee relations and employment law, policy and procedure plus a lot of project work (see Appendix C). Vodafone is offering its employees: buy one get one free share scheme and a save as you earn scheme, and give 28 days holiday a year.
Vodafone vision is to be the world’s mobile communications leader so the strategy they are following is to work on the internal factors (employees), which is an important issue to be the most successful organisation worldwide. The wireless world is transforming with a new generation of advanced mobile technologies emerging. This technology is re-defining how people interact with the world around them and Vodafone is taking a central role in its development. 2. 2 Marketing Vodafone is the largest mobile telecommunications company in the world.
It operates in 29 countries and has over 296 million customers, a staggering 34% of all users worldwide. Vodafone’s strategy is customer focused and product led; the company is continually developing new products and services which utilise the latest technological advances. However, as consumers become increasingly sophisticated users of modern mobile technology, Vodafone makes new demands and seek added value through product improvements. Vodafone must feed this back into its product strategy. 
The company not only offers mobile, WAP and text services, it’s also one the biggest sport sponsors such as Manchester United, Formula One, English Cricket and Vodafone Derby. Vodafone marketing mix (see diagram 1) depends upon brand marketing and local marketing. First of all brand marketing is designed to increase general public awareness of the Vodafone brand or other local Group brands and marketing. Brand communications include sponsorships and advertising on radio, television, in general circulation newspapers, in magazines and in specialised publications.
Vodafone established loyalty points to perform the local market as the second strategy. The loyalty point scheme will benefit the Vodafone customers by providing better deals with the network. (Diagram 1 Vodafone Market Mix (4 P’s)) Different approaches used to attract the consumer and business sectors to Vodafone. Products and services are available directly to both consumer and business customers in the majority of markets. Directly-owned stores are becoming increasingly popular in most markets, with customers invited to try out service offerings such as Vodafone live!.
Local Internet sites offer products and services online and sales forces are in place to discuss terms with business customers. Indirect distribution includes using third-party service providers, independent dealers, agencies and mass marketing. Service providers are prevalent in some markets, most notably the UK. Marketing to third-party service providers includes maintaining a competitive tariff structure, providing technical and other training to their staff and providing financial incentives for service providers, their dealers and sales people. Service providers receive discounts on the Group’s airtime rates for each tariff.
Service providers also receive financial incentives from the Group related to their success in attracting new customers to the network. These comprise gross connection bonuses, airtime growth awards and other specific incentives. Supermarket chains and multiple retailers are also used to achieve mass distribution of prepaid products, with top-up vouchers available in a wide selection. 3. Recommendations Vodafone is the leader mobile market in the world that make them control the market of mobiles, in order the company puts threat on the governments, which will make the governments to take actions against the organisation.
In this case Vodafone should increase the partnership to include the governments. The pace of technological development accelerates with each new generation of discoveries and applications. Already new product development cycles have reduced from years to months, for example the company satisfy the customers’ needs with 3G phone network for the current time, but it should be alert for the technology changes to be the first company to adopt the new technologies of phone network in the right time, that will continually proved the leadership for Vodafone.
Vodafone should consider a plan to cut the price of mobile phone calls to attract the users to make more phone calls, which will increase the profit of the company and attract more users to the network. Vodafone considers Market Segmentation and Market Definition are indistinguishable and should be treated as such. The analysis to be used for market mix should be according to established competition law principles and identical to that used for the definition of relevant economic markets. Market segmentation should not be used to target different remedies within a relevant market.
Targeting of remedies is highly desirable, but should be done independently of market definition and not prejudged by it in any way. Webcentric strategy save Vodafone advertising costs, Vodafone will not have to interview a lot of people who may not suitable so that will save Vodafone money and time. However, Vodafone will be missing well qualified people, employees from competitor firms will not be attracted and Vodafone will miss out the opportunity of getting employees with experience in other companies.
The Vodafone Strategic Plan for human resources clearly identifies the need to improve the effectiveness of processes and data and reduce their associated costs and risks in support of the organisation’s strategy of growth. The provision of effective management systems, based on sustainable technology platforms, is a prerequisite to streamlining business processes to meet these growing demands without expansion of support staff. 4. Conclusions
Vodafone treat the external agencies as members of the company to streamline its processes to reduce the time to hire as well as continuously improving the candidate recruitment experience. The development of webcentric contains significant challenges for HRM. Clearly, the development of webcentric will lead to significant challenges for the HRM strategies and policies of those companies that become caught up in this new technology. These challenges include recruiting, redeploying, training and retraining of labour to provide required IT skills.
However, they also extend to the recruitment, training and re-training of management staff so that organisations are able to operate effectively and develop in the brave new world of web strategy. Vodafone is continually looking to add value to the services it provides and to the packages it offers to customers. There will be few new customers available. So the challenge is to provide added value services and competitive charges to existing customers who are becoming more sophisticated and demanding.