The case for analysis, “Vodafone: Out of many, one” has shown an overall view of the company and show the companies good and bad position. The case study also showed the mobile phone business as a whole and explaining the challenge in the industry. Even though Vodafone are the biggest mobile network in the world, they still have their own problems.
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This report will explore the strategic analysis of Vodafone, the world’s biggest mobile network. Firstly, the report will discussed about the superior skills of Vodafone in acquiring companies and integrating them into their operations. Secondly, the report will show how well does Vodafone work with their strategic partners and doe they need full ownership to integrate companies successfully into the Vodafone way of operating.
Discussion about whether Vodafone should look for more strategic partners for expansion or focus on takeovers which result in wholly owned subsidiaries also will be explained in the report. This report will also discuss about Vodafone operational capabilities and how does the economics of the mobile phone market affect the strategy of Vodafone. Finally, the threats that need to be taken by Vodafone and their strategy to solve it.
Taking into consideration all the aspects which been discussed, the strategy Vodafone implement will prove to be very effective. As the segment they chose to target was one of which they are familiar to were able to use their own knowledge to identify the factors that needed to be addressed in order to appeal to the current challenging market (Johnson et al 2005).
Vodafone Vision and Values Capabilities
Where there are people, there will be new technology, because the world needs it to survive. Currently, technology is all around us. Everywhere we go we will run into some type of new technology. Advancement in technology makes everyday things easier than they have ever been before (Anwar 2003). Vodafone is one of the organizations that use technology as their main weapon to compete in the very challenging market nowadays.
Vodafone (2010) is the world’s largest mobile telecommunications network company by introducing innovative products and services, with increasing its worldwide presence to 27 countries and Partner Networks in a further 33 countries. Vodafone has approximately 186.8 million customers worldwide; 25% of mobile phone users around the world are connected to networks in which Vodafone has a shareholding (Vodafone 2010).
CEO of Vodafone, Arun Sarin has dedicated a great level of time, effort, energy, enthusiasm and passion in order to continue Vodafone’s growth over the decade (Anwar 2003). It has been acknowledged that all mobile operators, not only Vodafone, have been focused on new technology while the mainstream customers have been left behind, not knowing how to use it. This is a problem that needs to be changed.
Direct marketing may be a source that can solve this problem, with information being sent to consumers so they are able to understand the new technology being offered to them and realize its uses (Johnson et al 2005).Vodafone vision and values guide the way they act.
Vodafone (2010) corporate values are:
“Passion for the world around us”
“We will help the people of the world to have fuller lives both through the services we provide and through the impact we have on the world around us.”
Internal and External Operations
The ultimate long-term strategic direction has two parts, that of the core philosophy and the envisioned future (Anwar 2003). Anwar (2003) stated that it was done with the re-branding policy that addressed the needs and concerns of employees as well as their target market. It was a good move to get the employees to feel that they are part one huge corporation instead of being part of an individual one.
Vodafone has three key attributes which strongly differentiate them from their competitors (Eaton & Brown 2002):
The amount of technology in with which they continue to drive network and IT savings through centralization of core activities.
Strong presence in the enterprise market, in large corporate as well as in small and medium sized businesses.
Strategic direction involves specifying the quality and figure that Vodafone wishes to develop.
The main objectives of the business are revenue stimulation and cost reduction in the market, innovate and delivering customers satisfaction (Johnson et al 2005). Communications is needed and to deliver strong growth in emerging markets. Vodafone’s strategy will focused on four key objectives:
Drive operational performance
Pursue growth opportunities in total communications,
Execute in emerging markets
Strengthen capital discipline.
A SWOT analysis for Vodafone provides a structure to summarize the marketing strategy for the company (Harding, 1998). The results will show the strengths, weaknesses, opportunities and threats affecting the company in different situations.
Vodafone’s strengths are its global experience and its ability to deploy across many countries.
Sponsors of Manchester United and Ferrari Formula one Team enabled Vodafone to develop its own global presence.
Vodafone has a truly seamless global platform which harmonizes existing and future network systems, and further enhance the company’s ability to introduce products with a focus on both speed to market and the ability to deliver them seamlessly across the Group’s networks.
Standardize customer relation management is also the feather of Vodafone. The company is developing a group-wide standard in CRM to ensure an awareness of its customer base and their preferences in order to facilitate the efficient sales of its new services and products, unlocking the full potential customer base.
Exploring new technology requires huge Research and Development and infrastructural costs.
Vodafone is facing the legal issue in terms of differentiation as the sector of telecommunication is still immature to be responsive to the rapid changes in legal.
Diversification is a strategy that takes the organization into both new market and product or services. (Johnson et al 2005).
It may be highly effective gain from applying the organization’s existing resources or capabilities. Vodafone’s nature of business is in a highly competitive condition.
Vodafone’s competitive capabilities may fully engage in its global expansion, and may have insufficient resources and competence in developing other strategic business units which irrelevant to mobile telecommunications.
Some of the corporate level strategies such as international diversity and global expansion which Vodafone Group is currently experiencing are what they may need to develop. The globalization of markets and competition is the most important consideration.
Videophones, M-commerce, internet access, multimedia messaging all are new areas for future developments.
Further market expansion in Asia.
In developed countries, the mobile phone market has become a mature market and mostly faces the saturated demand.
The market of Vodafone is characterized by rapid-fire technological change because of the pace with which next- generation products are being introduced.
In current globalization of world trade, both developing countries and developed counties are still setting trade barriers in trade liberalization. Vodafone are facing many economy and legal issues.
Orange, O2, T-Mobile and more other global operators are operating the same business.
Conclusions and Recommendations
Vodafone is the world’s largest mobile telecommunications community, employing over 65,000 staff and with over 130 million customers. The business operates in 26 countries worldwide. Vodafone is a public limited company with listings on the London and New York stock exchanges (Vodafone 2010).
The success of Vodafone comes from its wise investment, continuous innovation and also their strategy in focusing on customer services. It has taken a series of strategies like globalization, economics of scale, branding, target audience, value added services to adopt the changing environment and also customer taste. Vodafone have learnt how to acquire customer’s satisfaction by implementing their own strategy (Eaton & Brown 2002).
The conclusion is that the actions undertaken in Vodafone under Arun Sarin leadership are excellent. The action taken in determining strategic direction, managing resource portfolio and organizational culture has benefited Vodafone. On the other hand, the action for ethical practices and organizational controls has been limited.
Vodafone needs to continue exploiting the resources and capabilities at their disposal to remain profitable and competitive in the near as well as the distant future. The fact that Vodafone is the leading mobile phone operator is testament to the principles take by the management. However, leaving things as they are will not suffice. It needs to form strategic alliances to enter into new markets and continue encouraging entrepreneurship among its workforce as well as giving more focus to these areas.
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