Impact of the Macro-environment on Vodafone

Internal Strength and Weakness of Vodafone

There are various strengths as well as weaknesses of the company which can be laid down as follows:

Strengths

• Dominance in Cellular market, which gives company a competitive edge over the others.
• Wide geographical Presence.
• Diversified geographical portfolio, with presence in US, ASIA, Africa, Middle East etc.
• Strong Network Infrastructure.
• Ability to adapt with the market condition and this is the reason that company has not faced many cultural and economic problems in establishing itself within various countries (Jensen and Berg, 2012).

Weakness

• Low Research and development
• Negative Return on Assets (ROA)
• No network in rural areas as the company is not able to penetrate that much.
• Tax issues faced by company around the world.

TASK 3

P3 Analysis of competitiveness of telecommunication sector of UK through porter five forces model

Porter five forces model is an effective tool to analyse the competitive strength of any organisation or industry. The analysis of telecom industry of UK can be Made through this tool and is as follows:

Threat of New Entrant

It refers to the threat that a competitor may come in the market and grab market share from existing players operating within the industry. The threat of new entrant within the telecom industry of UK is quite large because of the fact that there is still very good potential left within the sector and necessary growth as well as profitability can be achieved by players. However there are some factors which can lower the extent of this threat and these are

• Huge capital investment required to setup any telecom business within the industry.
• Economies of scale give benefits to existing players.
• Customer Loyalty of present Organisations are quite good and thus it is unlikely that they will switch.

Bargaining power of Suppliers

The suppliers are present within the telecom industry of country in the form of infrastructure provider to telecom companies for the purpose of providing telecom services. Mobile manufacturers are also the suppliers of industry and those are present in quite a huge number, therefore suppliers bargaining power is quite moderate within the sector (Sia, Soh and Weill, 2016).

Competitive Rivalry

It refers to the competition among existing players. The level of competition is quite high among existing players and they follow pricing as well as non- pricing strategies to overcome competition and to gain competitive advantage. Companies spend huge amount on their advertising and promotion budgets which is a clear indicator of the level of rivalry the companies are having in between them. The spending on Research and development is also quite huge and this also indicates the level of rivalry within industry. There are various telecom players within UK and is having capabilities to give competition to each other through various resources that they have (Leonidou and et.al., 2015). Get the best assignment writing service with chat support.

Threat of substitute

It implies the peril that a contender may bring certain things or organizations which may substitute the present thing or organization of the association and thusly may achieve the loss of customers, a bit of the general business and also profitability of the association. The products and services offered by the companies within the sector are quite similar and therefore the scope for substitute is even more within the industry, thus it is quite essential for all the companies within sector including Vodafone to make necessary changes within their product and service portfolios to gain competitive advantage and to make their products something which are not substitutable.

Bargaining power of Buyers

The number of consumers and buyers of telecom industry is very huge and scattered and moreover this industry has become a necessity now for people, therefore buyer's bargaining power is negligible within the sector (San Martin-Reyna and Duran-Encalada, 2012). However they do have too much option within the industry, if they are not satisfied with products or services they can switch to other company, therefore the switching cost is very low for consumers. It is along these lines fundamental that administration of Vodafone might ensure that the level of nature of its items would not break down and benefit conveyance should be better than expected, the main there is a degree that a purchaser would remain steadfast with organization and would not search for different organizations to make its buys.

TASK 4

P4 Strategic Direction and Options available for Vodafone

Bowman's Strategy Clock is a model utilized by an organization while planning promoting system to examine its aggressive position in contrast with the contributions of contenders. It is a diagrammatic portrayal which demonstrates connection between client esteem and cost

Figure 1: Bowman's Strategy clock model

Following can be the eight strategic positions that Vodafone can adopt in order to enhance its competitive position are as follows:

• Low price Value:This is a section particular alternative and organizations don't more often than not contend in this class. This is the "clearance room" and numerous organizations would prefer not to be in this position. Organizations pick this position when their item needs separated esteem. An organization can apply this through cost successfully offering volume, and by consistently pulling in new and potential clients. Vodafone do not compete in this category as the prices of its products as well as services are usually high as compared to its competitors.
• Low Price:A Company can choose this alternative for their items or administrations when it will be minimal effort pioneers. At the point when an organization will work under this system (low costs) its overall revenue will turn out to be low so organization need to deal high volume. In the event that an organization which is ease pioneer has sufficiently extensive volume or solid vital explanations behind its position, it can manage this approach and turn into an intense power in the market (Muduli, 2012). Vodafone is a company with a good brand value therefore it is easier for company to charger a higher price instead of low price, therefore company would not opt this strategy more often.
• Hybrid (Moderate prices and Moderate differentiation):Hybrid are those intriguing organizations which offer items or administrations to its clients at a low cost, yet offer items or administrations with a higher saw an incentive than its other ease rivals. In this methodology volume is an issue however organizations assemble a notoriety of offering reasonable costs for sensible products and enterprises.
• Differentiation:In differentiation an organization grows such items and administrations which offer extraordinary characteristics that are esteemed by clients. At the point when an organization creates and plans such items and administrations which separate (high saw esteem) it from contenders it generally got an aggressive edge. Marking assume a key part in separation techniques as it enables an organization to wind up synonymous with quality and also a value point.
• Focused Differentiation:In Focused Differentiation organizations items offers high apparent esteem items against high costs. This technique embraced by those organizations whose clients purchase items or administrations in light of apparent esteem alone (Ritchie, 2013). It isn't essential that items have any genuine esteem, yet the view of significant worth by the clients is sufficient to charge extensive premiums. This kind of strategy does not have much relevance in telecom industry because the prices and costs of services provided by companies are usually competitive unlike the prices in this strategy.
• Increased price and Standard product:In some cases an organization takes a risk and basically expands their costs with no expansion to the esteem side of the condition (no highlights and development in Product as well as services). On the off chance that the cost increment is acknowledged by client, organization will appreciate higher productivity and in the event that it isn't, their offer of the market fall, until the point that organization make an acclimation to their cost or esteem (McGrath, 2013). This system can't work in long haul suggestion as an unjustified value premium will soon be found in a focused market.
• High price\ Low value:This technique can be executed in a market where just a single organization offers the products or administration (imposing business model valuing). As a monopolist, organization don't need to be exceedingly worried about including an incentive in their item or administrations in light of the fact that, if clients require what organization offer, they will pay the value organization set. Vodafone cannot use this strategy for the purpose of doing its business operations as it is not the only player within the telecom industry of UK.
• Low value\ Standard price:If a company is having a low value product, the only way it can sell its products is through lowering the overall prices for its products, if it keeps the prices at the same level it will surely lose market share in the long run. Hence, If Vodafone opts for this kind of strategy; it will have to keep the prices of its products also very low (Ireland, Hoskisson and Hitt, 2012).

CONCLUSION

In this way, one might say that business strategy is an exceptionally Essential piece of any business. It sets purposes, bearings, goals for the association and furthermore outlines rules so as to accomplish the set destinations and targets. It is likewise very critical that these techniques are actualized in successful way with the goal that organization can accomplish upper hand and business development in the more drawn out timeframe. There are different apparatuses which procedures can be confined inside an association, for instance, PESTLE examination and SWOT investigation which allows the organization to survey interior qualities and shortcomings with outside circumstances and dangers and thusly it enables the organization to strategise effectively for the advancement of organization and its partners. It is likewise important to remember the impact of these components on the organization and it's working so a proactive as well as enhanced approach towards these variables can be connected over period of time. In the current era of competition it is very necessary that right kind of policies and business strategies are framed to retain and increase the customer base of organisation along with maintaining necessary profitability and growth.

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