Major purpose of this report is to develop understanding and knowledge of student towards different kind of strategy that can be used in tactical, operational and strategic functional activities of firm. In order to address this, it is needed to evaluate supportive models and theories for their effective implementation.
- Identify the impact of external environmental factors over the business strategies of Vodafone.
- Discuss internal environment and overall capabilities of Vodafone.
- Analyse the competitiveness of telecommunication sector of UK.
- Evaluate the available strategic direction and options for Vodafone.
An organisation enters into market to achieve their desired goals and objectives and it can possible when the business activities are executed and performed in profitable manner. It requires business strategy which need to be formulated by the management of an organisation. Business strategy is like a roadmap which provides suitable guidance and direction to the workers in order to perform as per the prescribed standards and regulations made by management of an organisation. The present assignment is based on the Vodafone, a mobile telecom company which deals offering telecom services in multiple of countries. The project explains the impact and influence of macro-environment on company and their strategies to deal with such factors. Porter Five Forces model and Bowman's strategy are also discussed under this report in order to analyse the strategic decisions and plans for the betterment of an organisation (Azar, 2011).
P1. Impact and influence of macro-environment on business organisation and its strategies
Macro-environmental factors includes various factors such as political, economical. Social, technological etc. which affects and influences business operations of an organisation either in negative or positive manner. Such influencing factors forces the management to make an effective decisions and plans in order to deal with them in an effective and efficient manner. It will help company in sustaining in competitive market for longer period of time. Vodafone is largest telecommunication company which deals in providing services in number of countries therefore they are much affected from such factors. So, it is important for management to analyse such factors through conducting PESTLE analysis in order to determine their impacts on business which further help them in making an effective decisions and plans (Cascio, 2018).
Such analysis shall required to be conducted in order to identify and analyse the factors which may influences and affects business functions thus required management of Vodafone to make an effective plans and decisions so as to deal with such factors in an effective and efficient manner. Vodafone has been operated its business in over 30 countries and focuses on expanding its business across worldwide. Macro-environmental factors includes:
Political factors: Such factors are related with government stability which may affect the business operations of Vodafone. Changes in government many changes in taxation policy due to which the prices of telecom services offered by Vodafone are either increase or decrease. Thus, it affects their customer strengths as well. For example, if new government in UK increases the tax rate on telecom services then it will affects the buying behaviour of customers due to which they may shift to their rival's.
Economic factors: An organisation are willing to operate its business in such countries where the economy are more stable as it help them in achieving huge customer strength. Growth in economy will increases the income of the customers which is good sign for company. Having income group may show their willingness to adopt new technology therefore it helps company in generating high revenues and sustain in UK market for longer period of time. The economy of UK may also get affected due to economic crises due to which they failed to attract company to invest in their countries (Chang and Graham, 2012).
Social factors: It is related with culture, behaviour, interest etc. of individuals which affects the sales figure and success of Vodafone. As the preferences and buying behaviour of customers changes frequently due to which the company required to make changes in their decisions and plans accordingly so as to cope up with such changes. As Vodafone is European companies therefore to attain huge customer bases in UK they need to make regular changes in their strategies related with price, offers etc.
Technological factors: Due to high competition in telecom industry, Vodafone required to follow current trends exist in communication and technological area through adopting an advanced technology in manufacturing of new technical products and features of devices which help them in moving head of their rivals.
Legal factors: Vodafone has been operated its business in multiple countries due to which they need to follow legal laws and legislations made by government in which they are operated. Vodafone engaged in various issues due to non-compliance of legal laws due to which the company faces lots of penalties ad fines. It will make negative impact on their brand image of company thus may lose loyal customers as well (D'Aveni, Dagnino and Smith, 2010). As it has also been identified in recent times that Vodafone has not paying adequate amount to their employees as compared to their rivals due to which huge number of employees left the companies. It increases the chances of leakage of information and ideas of company which may bring disadvantage to company. Therefore, it is essential for company comply with legal laws and legislations if want to expand its business to different countries.
Environmental factors: Nowadays, the customers are more ethical due to globalisation as they preferred to get services from such companies who gives maximum contribution for the welfare of the society. This will help company as well in gaining strong brand image in market due to which they attract more customers across worldwide. It also required for company to create a healthy atmosphere at workplace so as to support their employees in giving their maximum efforts in achieving desired goals and objectives.
Vodafone is one of the largest and popular telecommunication company which has attained strong brand position in market. Therefore, it must required to analyse all such factors in order to cope up with them in an appropriate manner (Firnkorn and Müller, 2012).
Ansoff's growth vector matrix:
Such matrix is an effective strategy tool with the help of which the companies are able to formulate an effective and fruitful strategy in order ton execute business operations in more effective and efficient manner. Through such matrix, the management are able to find out the best possible way of grabbing competitive opportunities in order to gain competitive advantage in market. Such matrix consists of four growth strategies which are explained as below:
Market penetration: Under this strategy, the company may decide to capture large market share with the available products and services in market. Therefore, the management of Vodafone must required to utilise their available resources in an optimum manner so that they can enhance their telecom services so as to achieve growth and success.
Market development: Under this strategy, the company decided to expand its services to new market segments in order to achieve growth and success in market for longer period of time. On the basis of survey, mostly young generation preferred to use smartphones in order to update their knowledge and information so that they can live as per the trends. As it has been identified by Vodafone that their mostly loyal customers are from urban areas due to which the management are directed to make an effective strategies to attract customers from rural areas as well so as to increase their customer base (Haley, Haley and Tan, 2011).
Product development: Under this strategy, the company decided to bring new products into current market in order to capture large market share. For example, launching new Wi-Fi hotspot devices which grabs an eye of customers which helps in increases their revenue as well. Therefore, the management of Vodafone required to bring new products into market on regualr basis.
Diversification: Under this strategy, Vodafone offers diversified their business into new through developing new products for new markets. For example, Vodafone may get into partnership with any retail companies in order to increase their revenues and profits. In this, their main focus is to expand their brand image through out the world so that they can easily recognised in market ( Higgins, Omer and Phillips, 2015).
P2. Assessment of internal environment of enterprise
As Vodafone has operated its business in number of countries thus facing tough competition from large number of rivals of national as well as international. It is essential need to make an effective strategies and plans so as to compete with rivals in an effective and efficient manner.
Strategic capability: It is essential for an organisation to identify their strengths and weaknesses and accordingly prepare plans and strategies in order to improve their weak areas so as to achieve competitive advantage in market. The strategic plan are must required to formulate in order to execute business operations with the help of utilising resources in an optimum manner. Through this, Vodafone can able maintain their strong position in market. Strategic capability of a firm refers to the skills and capabilities through which the company can easily attain strong presence in front of their rivals. There are various parties such as stakeholders, customers etc. which gives maximum support in the growth and success of company therefore formulation of plans and strategies for their betterment with an expectation of getting result in near future (Klettner, Clarke and Boersma, 2014). For an illustration, Implementation of advanced technologies required he amount of investment due to which the company required to get support from their investors and various financial institutions who are agreed to provide them loan at particular rate of interest.
In addition with this, delegation of roles and responsibilities on the basis of their skills and knowledge which brings motivation and confidence among them due to which their performance level are also increased. The government bodies and financial institutions are also play a valuable role in getting success within shorter period of time.
It is considered as analytical tool which help company in identifying and analysing their capabilities and resources the company have at present so that corrective actions should be taken by the management of Vodafone. Through using such tools, the management are able to find out the ways of utilising available resources in an optimum manner so as to achieve better possible outcomes. It includes different aspects which are as follows:
Valuable: The most valuable thing the company have attained is resources which need to be utilised in profitable manner so as to decrease cost of services provided by them. As resources are limited which requires to be utilised at an optimum manner. Therefore, it is the responsibility of management to make an effective strategies regarding allocation of resources so as to bring maximum outcome in return. Therefore, it must required for Vodafone to educate their employees about the value of resources as their role in success of an organisation which bring motivation among the to utilise resources in an effective manner (Porter, 2011).
Rare: It states that an organisation having adequate amount of resources will increases the chances of getting competitive advantage to the fir in near future. As Vodafone is one of the largest multinational company which deals in offering telecommunication services in multiple number of countries therefore they are more capable to acquire resources due to having lots of funds. The compa