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PESTEL and competitive analysis of Vodafone

Paper Type: Free Essay Subject: Marketing
Wordcount: 3300 words Published: 1st Jan 2015

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“A transnational, or multinational, corporation has its headquarters in one country and operates wholly or partially owned subsidiaries in one or more other countries. The subsidiaries report to the central headquarters. The growth in the number and size of transnational corporations since the 1950s has generated controversy because of their economic and political power and the mobility and complexity of their operations. Some critics argue that transnational corporations exhibit no loyalty to the countries in which they are incorporated but act solely in their own best interests.”

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Mexican Market:

Mexican market telecommunications industry specifically, industry growth has long outpaced broader economic growth. Mexican telecom market will expand at a CAGR of 7.9% over the next five year to generate $34.9 billion in 2015, dua to radio-access migration from 2.5 to 3G platform, spectrum winners and the entry of a new player increasing competition. In Mexican market slowest growth rate in the since 2002 but the Telmex enter in the market so the Mexican the economic growth will be increase and also the telecom sector are the most effective sector in the economy. During 2009 and early 2010 Mexico’s telecom industry maintained double figure annual growth in the recession periods. Telmex only company who dominates the fixed-line market with around 90% of lines. Telmex increase the fixed lined annual growth compare to the 2000 it’s only 13% to increase in 2009. So the Mexican telecom current markets it’s really good opportunities of the other countries telecom company to enter in the market and doing a good business. A telecom sector give the new competition and more 3G services offers of the country’s telecommunications, media and technology sectors to increase the Mexico’s market.

Mexican governments and People encouraging telecom competition because of the better coverage, affordable process and communication has lead the economy. Government expect mobile services revenue to account for 67 percent of the total market by 2015, so it’s increase total subscribes base of roughly 41 million new adds between 2009 and 2015. In Mexico’s most of the other telecom company has good opportunities to enter the market.

Vodafone Background:

Vodafone is the world’s leading mobile telecom company, with a significant present in Europe, India, The Middle East, Africa and the united state though the company subsidiary undertaking joint ventures associated undertaking and investments. The group’s subsidiaries operate brand name Vodafone. Verizon wireless in the United state associated with the Vodafone. During the last few year companies entered into arrangements with network operators in countries where the group does not hold an equity stake. Vodafone group and it’s partner network co-operate in the development and giving global services under the brand logo.

Vodafone Group is a largest telecom company in UK and it’s headquartered in Newbury, England. They made first phone call just minutes after midnight on the 1st of January in 1985. Vodafone already recognized as a largest company in the world. Vodafone is the biggest telecommunication network provider in the world and it’s turnover and has a market value of about one hundred billion pound. It’s a FTSE 100 company and is ranked 3rd. It’s had also approximately £92 billion as of November 2010, making it’s the 3rd largest company on the London stock exchange. It operates network in over 30 countries and has partner networks in over 40 additional countries.

PEST Analysis:

Political Factors:

Regulations: In Mexican markets telecom licence are very tightly controlled and very expansive. Mexico’s governments not allow to the easily enter the telecom market because for this industry has a very good growth. NAFTA (North American Free Trade Agreement) is not allowed to star business in the Mexico’s. They follow a very high regulation related to the customer need and the environment. Vodafone has to take permitions to enter the Mexican market and government also need very high quality for the service and also government tight measure are implemented to decrease mobile phone use for children because of health issues.

Infrastructure: Vodafone has to establish the infrastructure to support the network usually require taking permission from the government and other regulative body. So Vodafone has to give the brand image and assets to take the advantage and entering the Mexican market.

Communication act: Mexican market has own communication act so the Vodafone has to follow this act and change policy related to this act. Mexican market has good opportunities for Vodafone but they have to follow the communication act so they can easily enter the market and give the better service to the customer.

Economic Factor:

Recession: Last year recession periods also very effect of the market so the customer not buying new product but doing a saving so the it’s effect to the Vodafone growth so they have to change their policy related to the recession periods and attract to the customer to buy a phone. In the recession periods the amounts of money are willing to spend; therefore there is a price war between leading company network providers to force to down their call charges and sms charges.

Cost of New Licensing: In the current Mexican market 3G technology introduced so Telmex also using this technology to cover the whole telecom market. It’s creating competition between the local telecom providers and the Vodafone. New technology always wants a high expenditure to acquiring new technology.

Inflation Rate: Mexican market current inflation rate are 3.60% so the it’s also effect to the customer buying behaviour. So the Vodafone has to decrease his product price to comfortable for the customer and they can buy easy. If the inflation rate going high then People saving money and they control their buying. So it’s directly effect to the Mexican economy.

Social Factor:

Education: Mexico education level will be between 90 to 95 percentages so the people take a good decision for which product and company better for them so it’s also effect to the Vodafone. They have to targeting people and fulfil they need then Vodafone will be success in Mexican market.

Life style change: In the world new technology always entering so it’s really hard for the company to convince to the customer that they provides a better product then other. In Mexican Market always change a new technology always so the it’s effect to the Vodafone strategy and customer level. Etc. I-phone. If the other company give the better phone and upgrade the product then customer life style and fashion always change so they move to the other company.

Technology Factors:

New Inventions: Mexican market is the growing and well established market so many companies wants to enter in to the market and earning a lot. So they doing something different to the local company so they always give better and upgraded product compare to the local company so it’s always effect to the Vodafone that how can they give the new technology to the customer and convince then to use this technology. Etc. Wi-Max and 3G

GPS: it’s also available in all handset so the Vodafone can give the navigation programme to customer. Customer buying a navigation support handset not a buy a high price navigation system so it’s will be also good point to enter the Mexican market.

Market Segmentation:

Segmentation is a way to have more targeted communication with the customers. This process describes the characteristics of the customer groups within the data. Segmenting means are putting the population in to segments according to their similar characteristics. Segmentation is important part for the company to entering a new market. So they know who’s customer and what they product needs.

Geographical: Mexico is the most populous Spanish-speaking country in the world. About 70% people live in urban areas so the Vodafone has to cover this area and give the good product and scheme so they can convince and buy. Vodafone have to cover all the Mexico’s market and introduce their product. Mexico divides into different parts so Vodafone has to cover all the geographical area and enter into the market.


Age: Mexico market telecom industry customer base on the age over 14 to 50. So the Vodafone has to fulfil all the needs and wants customer like product and new handset they have to provide. In this age periods people earning so they can buy a new handset for the fashion and basic uses so the company has to target this age people to increase their market.

Gender: Telecom sector is only one sector that no one takes monopoly means male and female both r interesting equally so the Vodafone has to give the good handset and scheme to both gender.

Education: Mexico people education level is 90 to 95 percentages so company have to differentiate to the customer related to education. Vodafone has to launch a new product and scheme so the educate people can easily interested and buy a handset and plan also. So has to more focus on educated people. Education is the intended customer likely to be at lower education or higher education so what their interests/age range will be company has to always target that people.

Social Class: Mexico has a different class people so company has to launch new product and plan related to the people class. Like company introduce i-phone so they have to target Businessman, Professional people. Company has launch different plan related to customer class life upper class, lower class.

Targeting Market:

Vodafone has to set a target market for their products that they are going to sell or service to the Mexican market. Company has to segment of a certain market that a company identifies as a customer.

Vodafone has to target in Mexico market at a middle classed workingmen with an average paid job. Also target the higher classed people who earn reasonable amount of income. Company has to target that people those who likes product will not be cheap and looking for a quality product rather than a bargain or an average sale. In Mexico economy is in growth periods so the Vodafone can target audience will be aged at middle and higher class, professional working men aged 21-35 years. Vodafone has to use new technology and product to attract the Mexican people and give the cheap and better handset compare to the Telmex Company. Telmex is the leader of Mexico’s local, long-distance telephone and internet service Provider Company so Vodafone has to launch a new plan and new product to give the competitive advantage to the company.

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Vodafone is a leading telecommunication company in the UK and also listed in FTSE 100 companies so it’s already brand image and position in the market. So it’s really helpful for the company to entering into the Mexican market. Telmex already cover the Mexican market to give the landline service and Brand band providers so it’s take a huge number of customer base in the market. Vodafone has to using strategy in positioning, UK Company use the brand “Power to You” campaign. So the company give the customer that power that they launch new service that bring the internet, the email and social communities to use to closer than ever to customers. Company has to give service to use email and internet on mobile phone so the Mexican people always keep in touch with other friends and family members. Vodafone customer services are also very good and it’s improving the IVR so for the customer easy to use services. Vodafone also give I-phone apps so it’s customer know the new product and better service on his i-phone.

Competitor Analysis:

In the Mexican Telmex already cover the whole the market in landline and mobile sector and other competitors AT&T and Worldcom in the market so it’s really thought for the Vodafone. But Vodafone has to launce Mobile handset and the service both sector in the market so they can give the tough competition to the Telmex and other company. Telecom sector is right now very good for the Mexican economy.

Customer always a main part for the any industry and market. Current situation customer has the choice of many different types of product at present time due to the high level competition. So Vodafone has to give some different types of product like broadband and 3G, GPS all this services to the customer so the company market will be going high and company earning a profit.

Vodafone is a largest network service provider in the uk and rest of the world they have big brand image so it’s really helpful for them to enter a new Mexican market and target the customer local people and divides them different segments.

In Mexico Market no one telecom company give the all services to the whole market. Telmex give the landline and AT&T give the mobile services so Vodafone has to good chance to cover the whole market to launce the new cheap product and Vodafone already know of it’s customer service and network so it’s really helpful for them to enter and give the competition to the other competitor.

Market Entry Strategy:

Vodafone has a good brand image so it’s really easy to enter to the other country market, but they have to take licence from the government and search data what kind of the customer need and they gating.

In Mexican market Vodafone has to search the kind of service provide Telmex in the market and is that they customer satisfied or not. Telmex only focus on the landline customer so Vodafone has to use the broadband and internet service and also give the good plan, better network so the customer can move to the Telmex to Vodafone.

Vodafone have already high capital so it’s better to enter market directly not using joint venture. They have also good reputation in the telecom market so they can use this brand image to enter a Mexican market. If the Vodafone entering the market then competition will be going high so it’s directly effect to the customer plan and price will be going down, it’s help to the country economy and customer also.

Marketing Mix Tactics:

Vodafone uses advantage as being a large international organization and implements differentiation and cost leadership strategy they benefit from economies of scale. Big brand image also help for the Vodafone to give the competitive advantage and adding more value to their service and product compare to the competitors.

The marketing Mix consists of many different factors like product, Place, Price and Promotion so Vodafone has to take this point and compete to their competitor.

Product: Vodafone offers different type of products to different type of customer and so can segment their market. Vodafone currently targeting the business people to give the business phone like Blackberry, I-phone, HTC so it’s give the more advantage for the company to attract company. Vodafone has good network coverage and they provide all over the world. Vodafone also produce 3G broadband and internet service in the current market and diversifying to the customer to buy a product. Vodafone promote Vodafone live, Vodafone mobile connect USB modem, Vodafone freedom packs etc. All are good product. Vodafone also provide good voice quality so the customer can prefer new product and handset also. So it’s helpful for the Vodafone to enter the Mexican market and differentiate to customer to their products need and provides good quality of network and better plan compare to the Telmex.

Price: Vodafone are able to offer different customers to different services life Pay as you go, Pay monthly contract, simply sim and Business solutions for business. So they have to structure their pricing method towards different need of the customer need. Telmex is the only one telecom company cover the most of the part in Mexican market so they use Monopoly of the price and they give the high rate of service so Vodafone have to manage and cover the customer base on the price and service.

Place: Vodafone operates their customer through retail stores all over the uk, There are over 400 in the retail outlets and they also offer their services through independent retailer like Phones4u. So it’s better to enter in the Mexican market Vodafone has it’s own image so local retailer like to take franchises of the company and earn a money. Vodafone have a good capital so they can build the new branch and store also so they can give the good competition to the competitors. Vodafone has to use easy way to direct selling to the customer in the Mexican market.

Promotion: Vodafone using a high level of advertising and they have a solid marketing structure. They always advertising poster on the street, TV Campaign and also famous Formula one champion Lewis Hamilton to advertise their products. This ensures people are aware of Vodafone new offers and discounts. Vodafone has to also use the local celebrity in Mexico’s so the people divert to the using a company product and give the new offers.


Launch location base services: Vodafone has a largest telecom company in uk and they have a brand image so they can easily enter in to the Mexican market. Vodafone has to cover whole the Mexican market like rural and urban area also and give the customer need product. Rural area most of the people not earn more so Vodafone has to give the cheap and better product for the customer needs.

Increase GPRS Subscribers base: In the Mexico’s internet are the covering a good market and they provide good opportunities for the company so Vodafone has to launch handset that support the GPRS and set NEV also. Most of the people always like to use Facebook, Twitter, Yahoo Mail in mobile internet so Vodafone has to improve the internet service so they can satisfied the customer need and compete with the Telmex.

Concentrate More on value Added Services: Vodafone give the value added services like News, Face book, twitter, National Lottery, Games, Weather so it’s earn a lot. Value added services are easy to use and they increase they company profits so they have to increase the network but also increase the value added services.


Vodafone is the largest mobile network retailer in the world in terms of turnover, has to continue to grow as develop more products and services. Vodafone maintain a sustainable competitive advantage have to update service with the changing the new technology and exists in the telecom market changing. If Vodafone has to enter in to Mexican market then they use the new technology and increase customer services. Current situation technology is always changing aspect in the mobile phone industry so the Vodafone give the competitive advantage to change to service. Vodafone’s strongest resource are their intangible assets like human resources are the most vital resource for them to stay ahead of their competitors and the main supply of competitive advantage. Finally Vodafone has good opportunities to start a new business in the Mexican market and increase a profit also.


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