1.1 PESTLE Model for environment analysis
Vodafone PESTLE AnalysisPESTLE analysis is a strategic tool which help in analyse the macro environment of the organisation. Pestle stands for -Political, Economic, Social, Technological, Environmental and legal factor that impact the working of this company. Changes in the macro environment factors can have direct impact on not only the Vodafone group but also have effect on other players in communication also. This provide great detail about operating challenges Vodafone will face in current macro environment other than competitive forces.
Political Factors :-
These factors play a major role in determining factors which give effect on Vodafone long term profitability in certain country and market. This company is operating in Wireless communications which is located in many countries and bring out itself to different types of political environment and political system risks. These factors are related with political system and political instability of countries where this company wish to market its products. This will involve examination of system of government that other countries have adopted . This company can closely analyze the many factors before entering in market .These are related with political stability and importance of Wireless communications sector in the economy of country, Risk of military invasion, level of corruption which is related to level of regulation in technology sector and pricing regulation related with mechanism for technology.
Economic Factors :-
These factors are related with inflation rate, saving rate, interest , foreign exchange rate and various economic cycle which determine the aggregate demand and aggregate investment of economy. There are factors which are related with competition norms which gives impact on competitive advantages of the firm. This company use country's economic factors which is related with growth rate, inflation and industry's economy indicators for example wireless communication industry growth rate, consumer spending etc. which help in forecasting the growth of these sectors. Economic factors which this company is consider these are various economic system in countries of operation, government improvement in free market and related technology, exchange rates, efficiency of financial market, unemployment, inflation and interest rates. Vodafone has to establish the infrastructure which help in supporting the network which usually require taking permission from the government and other regulatory body. So, this company has to give brand image and asset to take the advantages of other market.
Society's culture and way of doing things impact the culture of an organisation. These are related with values, customs, beliefs and attitude etc. Shared beliefs and attitude of people play important role in how marketers of this company will understand the customers of given market and how they design the marketing message for wireless communication industry consumers. This involves the management of Vodafone which help in analysing the income level, social structures, educational backgrounds, religion and family units before marketing its services of network operations to the entire market. These factors play a major role in utilization of services in the society because some religious beliefs may not allow the use of mobile phone in church. Therefore it is important for the company to clearly identify the right services and products for the right consumers as well as for the right markets. Therefore this company has to consider in details such factors in order to avoid losses associated with social factors.
Technology is fastly impact the various industry across the world. A company should not only to technological analysis of the industry but also the speed at which technology give bad impact on industry. Slow speed give more time while fast speed of technology give more better result to company and also increase the profitability. These factors help in analysis the understanding the following impacts it is related with recent technological development by Vodafone competitors, its impact on product offerings and rate of technological diffusion.
Every country follow their own laws and regulations because legal framework and institutions are not enough to protect the intellectual property rights of an organisation. A firm should carefully evaluate before entering such market as it can lead to theft of organisation's secret . Vodafone consider various legal factors these are Anti-law in wireless communication industry overall in country, discrimination law, consumer protection, e-commerce, employment and safety law.
Different markets have different norms or environmental standards which give effect on profitability of an organization. Even within a country often states that can have different environmental laws .Before entering in new market or starting a new business in existing market the firm should carefully examine the environmental standards that are requires to operate in market. Their are various factors which company should consider before entering into market and these are like weather, climate change, laws related with environment pollution, Waste management in technology sector, Air and water pollution regulation in wireless communication industry, waste management in technology sectors, attitude towards green product and attitude towards renewable energy.
1.2 Ansoff's growth vector matrix
2.1 Apply VRIO Model to determine the strategic capabilities of Vodafone
VRIO Model: The framework was proposed by Jay.B.Barney with an aim of evaluating the impact of company's micro-environment factors such as financial resources, material resources, knowledge, information, human resources on their business operation and activities. It is an analytical technique that mainly deals in evaluating company's resources and competitive advantage in overseas market. It encompasses of value, rareness, limitability and organisation.
With the assistance of this mode, Vodafone can easily analyse their resources in an effective manner. Once the company knows about their resources, they better understand competitive advantage and weakness. The dimension of VRIO are discussed below:
Value: It includes cost of resources and how to obtain it easily from the market?
Rareness: It deals with how limited or rare resources are?
Imitability: How is it difficult to imitate the resources?
Organisation: It deals whether available resources support the existing arrangement of company and can the firm use it optimally or properly.
Vodafone has mainly taken into account this model so as to assess the situation inside the organisation. It covers resources,
2.3 Identify strength and weakness of Vodafone
Extensive market coverage: Vodafone enjoys strong customer and market base spread all across the world. Presently, the company is operating in more than 30 countries and also has partner operation in many more additional places. Thus, the company is enjoying significant share in mobile-telecom sector in most of the countries in which they are mainly operating. As of 2017, the market share of Vodafone in South Africa, UK, India, Germany and Italy are 50.9%, 40.6%, 22.7%, 3.9% and 32.3%. Moreover in UK, it was ranked the 6th most valuable global telecom brand in United Kingdom.
Innovative advertising strategies: Innovation ha always plays crucial role in Vodafone advertising strategies: In-fact the company was the first one among others who comes into partnership with Yahoo in 2006. According to the survey conducted by Deloitte “more than 74% of UK's young population uses their smartphones while walking, bathing, eating .This can only be possible if the mobile network they are using provides strong signals to them so that they can use it anywhere they want to. In Today,s era life of a person is totally depend upon the latest and advance technology.
Success of M-Pesa: The company has launched its own mobile transfer services. It enable million of customer to pay their online bills, do recharge, book tickets and many more thing. This is only become possible with the such effective and successful services. M-Pesa is providing several offers in various countries like UK, Africa, Asia etc. This also become the another reason for attracting youth or young generation.
Cut Throat Competition everywhere: In its homeland, the company is facing strong competition against EE, Three network, O2. This enable their management to keep changing their policies and strategies on frequent basis. Thus creating disruption in overall business activities and operation as they firm only focuses on attaining high competitive advantage over others.
Legal Proceeding: The company also faced some allegation related with cell phone radiation that will lead to decrease revenue of telecom-mobile industry. Various cases have filed against Vodafone concerning health issues that children or people face as a result of extensive use of mobile usage. As per the Deloitte statistics report, In UK, young generation aged between 16-75 years old have increased their usage of smartphones up-to 74% which is not good as this might adversely affect their health and brings mental instability.