The scenario of this report determine that the mobile telecommunication sector in UK have been very competitive. Therefore, it is essential for Vodafone to maintain its current position in the market and simultaneously enhance their market share at both national and international level.
- Analysing the impact of micro environment on Vodafone and its business strategies.
- Assessing the internal environment and capabilities of Vodafone.
- Conducting an analysis of UK’s telecommunication industry using Porter’s Five forces model.
- Determining the strategic direction and options available for Vodafone using Bowman’s strategy clock model.
Business strategies can be define as summary of how firm will accomplish its aim and meet expectations of their clients as well as sustain competitive benefits as compare to their competitors at market place. Management of the company has develop plan of action and plan in order to operate all business activities in an appropriate manner. Through this, organisation has able to achieve goals and objectives which help to gain higher profitability, productivity in long period of time. In this report select Vodafone enterprise to know the impact of business strategies on internal and external working environment (Ackermann and Audretsch, 2013). It is a British international telecommunication organisation which are run their operations activities approx 26 nation and as a partner over 50 additional nations. They have their corporate clients in 150 countries. Vodafone was established in the year of 1991 as Racal telecom. Some product of the company is mobile phone, broadband, fixed line telephone, digital television, IPTV and internet etc. Around 111,556 employees with net income of 6.297 billion in the year of 2017. In this assignment covers PESTLE model of external environment, Ansoff's growth vector matrix, VRIO model, Porters – five – forces theory, bowman strategies clock model and many more.
P1 Explain the impact of macro environment on an organisation
Macro business environment has very important for an organisation in order to run all operations effectively. Some external factor are social culture, economical, political, legal, government, technological and many more. It is a management responsibility to analyse their positive or negative impact on enterprises performance in long period of time. In this report, to know the effect of external environmental elements there are two model are used PESTEL and Ansoffs growth model explain as follows:
PESTEL analyse: Vodafone has provide high quality services as well as product to their clients, so that it has one of the best telecom firm in the whole world. Most of the operation activities has completed in India, Europe, and many other nations. Company has very large market share with worth of hundred billion pound (Alsoboa and Aldehayyat, 2013). Vodafone has successful take its place in the global market. Organisation has been run their business at global level, there are several external environment element that considered in order to analyse firm success in the industry. PESTEL analyse of Vodafone are explain as follows:
(Sources: PESTEL analysis, 2015)
Political: Vodafone is operating their business activities around 50 nation and with partnership at 150 countries. Every country has their own role and regulation related to internation trade or companies so that management of the Vodafone has work accordingly to take advantage of globalisation. But some political action like higher tariff of particular nation or etc. has create issues for the company to operate enterprise in an effective manner. As the organisation is dealing in different parts of the world, so for them it is difficult to follow all the norms and regulations. Therefore, with a continues intervention of the regulatory bodies a decrease in the sales can be seen. For example, UK government has offer to big organisation to invest in rural broadband after the Brixit agreement has done and provide loan at low interest rate. Thus increase connectivity in rural location and enhance productivity of services.
Economical: Various economical factor like exchange rate, interest charge, per person income of different nation, inflation, growth rate, gross domestic product or GDP growth and many more has affect performance of Vodafone in several countries. High or good GDP of nation mean peoples have more income as well as disposable capabilities and they are able to adopting latest communication technology (Bentley, Omer and Sharp, 2013). Moreover, economic crisis has create negative impact on firm performance and sustainability in other nation in long period of time. Therefore, Vodafone is playing a crucial role in enhancing and upgrading the economy of the nation. Thus, company is considering all the factors that can have an external and internal impact on the organisation. For example, Vodafone is a one of large organisation so that their management has analyse economical factor which affect their work performance at market place.
Social cultural: In different location social culture environment has change which shows their behaviour aspect, attitude, perception, lifestyle, save as well as spending habits, needs, wants, demand and many more. Vodafone has operating their business activities around the world and its management develop strategies to analyse these all element in order to gain objectives in several countries. According to the current market situation most of the people are using digital technology and for them Vodafone is providing better offers which customers can avail for having better outcomes. For example, dynamic culture of UK has help Vodafone to make diversify service offers to full fill customers needs and wants effectively. So that they are gain higher clients satisfaction in given time frame.
Technological: Through latest technology firm are capable to achieve competitive benefits as compare to their competitors in same industry. Management of the company has develop differentiate product in order to gain core competencies advantage at market place (Curwen, 2011). Vodafone has spread their business market in several countries but their administration department has find out new location where their services and goods has achieve introduction phase in product life cycle through this firm are able to gain benefits of technology in long period of time in an effective manner. With the change in course of time, technology has played a important role as they are enabling the organisation in providing better services and facilities. For example, Vodafone has used latest technology in order to achieve competitive benefits at market place in long period of time. They are used latest technology 4G, 5G, CDM, LPWA and any more.
Environmental: Pollution like air, water, soil etc. has create negative impact on organisation performance as well as productivity in long period of time. With globalisation firms have become more ethical oriented. In current market environment, clients always want their favourite brand or organisation to be socially responsible in order to save natural geographical area. Vodafone has always consider aforementioned analyse and facts. Vodafone is manufacturing by looking out all the factors through which they can consume less resources. They are more concern about using sustainable resources form which they can give effective results. For example, Vodafone has sponsor football in order to promote game for healthy lifestyle, thus campaign help organisation to achieve goals and objectives with positive brand value.
Legal: Government of different nation want to save their local market and companies so that they are develop some policies which create barriers for external firms like higher taxation rate, trade barriers and many more. At international market Vodafone has many rivals so that company has face lot of legal issues like copy right and other pirated etc. for this Vodafone has pay lot of penalties. A part form this, company has accused for payment that they can not provide sufficient salary to their workers as compare to their competitor in same industry. As the organisation is spread all over the world so following all the legal factors is not possible for them. Although they are optimised some of the legal factors and it is helping them in establishing their company in an effective manner. For example, after Brixit, government of UK has make legal law related to investment into rural area which help to increase employment opportunities into that location.
Ansoff’s growth vector matrix: Most of the company has want spread their market in order to earn new customers as well as launching new goods and services to gain higher growth opportunities in long period of time (Cadle, Paul and Turner, 2010). Management of the company has analyse which option is best to take advantage of high return for any investment to achieve growth of the enterprises. In Ansoff matrix has provide four option for development and highlight the all associated risk. The four growth strategies are explain as follows:
Market penetration: In this action of plan, management has sale their product and services into current market place. They develop strategies in order to increase sells and profitability. Thorough this, firm has increase customers satisfaction, loyalty to grow long term value. Vodafone is a improve quality of product and services in order to increase market position as well as profitability in long period of time. So that they have receive higher customer's satisfaction and brand value at market place.
Market development: In this, manager has find of new market location in order to sell their goods, services among new consumers. Vodafone has used this strategies to achieve growth in long period of time and take advantage of introduction phase of product life cycle model. It is a one of the best strategies in which firm has take advantage of globalisation into world level. Thus help to run their operational activities in different nation in an very effective manner. Vodafone are expend their working area to reach large number of clients. Through this, firm are able to achieve their aim ' global presence' has full fill in an effective ways. Management of the company has select best most appropriate one method or strategies to go international level and run their business activities in other nation effectively with higher customer's gratification.
Product development: It is a most attracting method to gain or arise opportunities in existing market. Management of the company has used innovation as one of the product development tool to attract large number of clients toward firm commodities. It help to achieve competitive benefits as compare to their rivalry in current industry (D'Aveni, Dagnino and Smith, 2010). For example, Apple has continuously improve of modify their goods which help them to gain sustainability as well as growth in the market. Management of Vodafone has continuously focus on their product as well as services development which help to achieve aim in limited period of time. Through this, firm are able to achieve high market share as compare to their competitors at market place.
Diversification: It is a very high risky strategies, in this company has sell their new goods at completely new market. Diversification has worked well when business has already work or foundation in that place. Marketing manager of Vodafone has used this strategies to expand their market in other location which help to increase profitability as well as sustainability in long period of time in an appropriate manner.
P2 Explain the impact of organisation internal environment and capabilities
Strategic capabilities: Ability of successful implementing competitive plan of action which help to survive as well as increase its value in long period of time. It shows firm capabilities in order to run business activities in a appropriate ways to achieve goals, objectives effectively in given time frame. Administration of Vodafone has develop action of plan and execute them, this whole process help organisation to analysis their strength and weaknesses. Through this, they are remove barriers that are arise in duration of implementation and manage all work in an appropriate manner.
In current market environment, in order to surviving in highly competition for company it is necessary that they must be innovative in their work but for this firm has analyse customer's needs and wants accordingly produce product as well as services. As well, it also very nesecar for organisation to identify their resources capabilities and finance to implementing action of plan into work place (Dobbs, 2014). In detail, enterprise which have innovation ability has also known as a company's strategic capabilities. The success of strategic abilities has depends internal and external environmental factors that influence positively, negatively of institution performance, productivity in long period of time.
‘VRIO is structure of enterprise investigation of their business strategies which is the part of strategical scheme of the firm. Through this, Vodafone has analysis their sources which help to achieve competitive benefits in industry. VRIO is a tool to know internal strength and also analyse all abilities and firm resources that help to achieve goals and objectives in given time frame. The current strategy of Vodafone has create for geographic expansion, acquisition of new potential consumers, sustain consumers, raising usage of product and services with the help of innovative engineering or technology. VRIO has stent for Value, Rareness, Imitability and Organization. This model has develop by Jay B. Barney for evaluating available resources of an organisation. VRIO model are explain below:
(Sources: VRIO Model, 2016)
Valuable- Under this, management want to rise their resources value in order to product higher quality goods and services. Through this, firm has gain competitive benefits by adding some value in existing product to exploit opportunities against danger. It help to gain profitability as well as in long period of time. Resources is very important for the company to create customer's satisfaction and enhancing value of clients (Firnkorn and Müller, 2012). It can be done through used differentiation strategy to reduce cost of production. It is a management responsibility to take this point into consideration to achieve high market position, profitability, sustainability etc. Vodafone is build strong brand image at market place thus help customers to full fill needs and wants. For this they are used valuable resources that help to make differentiated services as compare to their competitors at market place.