vodafone group plc
Vodafone Group Plc is the world's leading mobile telecommunications company,
with a significant presence in Europe, the Middle East, Africa, Asia Pacific, and
the United States. The Group's mobile subsidiaries operate under the brand
name 'Vodafone'. In United States the Group's associated undertaking operates
as Verizon Wireless. During the last two financial years, the Group has also
entered into arrangements with network operators. The services provided by the
Vodafone Group are mobile voice communications, text, picture and video
messaging, email, mobile connectivity with internet and fixed broadband offerings
to meet the needs of every segment of the customers. Other information, mobile
applications, data roaming, DSL, and Vodafone live! With 3G (Third Generation)
are the special services provided by the company.
Vodafone was formed in 1984 as a subsidiary of Racal Electronics Plc. It was
fully demerged from Racal Electronics Plc and became an independent company
named Vodafone Group Plc in September 1991. Currently it is a public limited
company with its footprints in over 32 countries across the world. The company is
incorporated in England and having its registered office as Vodafone House, The
Connection, Newbury, Berkshire, RG14 2FN, UK.
The Vodafone Group has justified its success by having 280 million customers on
the globe and a total market capitalisation of approximately £79 billion with a
turnover of £35,478 million in the year 2008. There are approximately 72,000
employees working with Vodafone Group Plc.The Company's ordinary shares
are listed on the London Stock Exchange and the Company's American
Depositary Shares are listed on the New York Stock Exchange. The company
has invested £5.1 billion in capitalized fixed asset additions, including £1.0 billion
in operations in India, where it has over 44 million customers, with over 50% pro
forma revenue growth. (www.vodafone.com).
Vodafone Group has shown immense development since its birth in every aspect
of the business and great interest in Indian market, this project will guide you
through the growing strategies and the key strengths of the Vodafone Group
PLc., which has helped this company to reach such heights.
2. STRATEGIC ANALYSIS.
“Strategy is the pattern of objectives, purposes, or goals and the major policies
and plans for achieving these goals, stated in such a way as to define what
business the company is in or is to be”. Andrews (1971, p 31).
2.1 INTERNAL ENVIRONMENT.
“A vision statement is an articulation of what the company wishes to become or
where it seeks to go”. Grant (2006, p 61). Vodafone Group PLc. states its vision
as “Our Vision is to be the world’s mobile communication leader in an
increasingly connected world – enriching customers’ lives, helping individuals,
businesses and communities be more connected in a mobile world”.
Acccording to the Vodafone Group PLc. “Our mission is to lead the industry in
responding to public concerns regarding mobile phones, masts and health by
demonstrating leading edge practices and encouraging others to follow”.
Vodafone Group PLc. Says, their corporate Value is “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." (www.vodafone.com).
Harold Koontz et al. (1983) defined objectives as “The end towards which activity
is aimed.” The main objectives of the Vodafone Group Plc on which its strategies
18.104.22.168 Revenue stimulation and cost reduction in the market.
22.214.171.124 Innovate and deliver on our customers’ total communications needs.
126.96.36.199 Deliver strong growth in emerging markets.
188.8.131.52 Drive operational performance.
184.108.40.206 Pursue growth opportunities in total communication.
220.127.116.11 Strengthen capital discipline.
According to McGee, et, al (2005, p 781) “Stakeholders are individuals or
organizations that have an interest, or some kind of stake in the firm’s ongoing
activities”. Following are the major stakeholder groups for the company:
18.104.22.168 Non-governmental organisations
22.214.171.124 Industry forums
126.96.36.199 Governments and regulators
188.8.131.52 Local communities
The company engages with its stakeholders in a range of ways, including one-to-
one meetings, routine engagement on individual issues, partnerships, forums
and at conferences. They engage with stakeholders to understand their
expectations and respond to stakeholders with their evolving CR targets and
programmes. Finally the company reports the progress back to its stakeholders.
2.1.6 ORGANISATIONAL CULTURE:
The Board of the Vodafone Group PLc. is committed to high standards of
corporate governance, which they consider are critical to business integrity and
for maintaining investor’s trust in the company. The Board adopts proper
standards of business practices, operates with integrity and observes and
respects the culture of every country in which it does business.
184.108.40.206 TANGIBLE RESOURCES.
Vodafone Group PLc has tangible resources or assets amounting £127,270
million in the year 2008. It has 96,500 base stations to send and receive voice
calls and other mobile services, 5,500 Vodafone stores, over 100,000 mini stores
and over 8,000 mobile stores. (www.vodafone.com).
220.127.116.11 INTANGIBLE RESOURCES:
Intangible resources of the Vodafone Group PLc excluding goodwill were
amounted to £15,705 million and represented 14.3% of the Group’s total assets.
Vodafone has three key attributes as its essential intangible resource which
differentiate them from there competitors:
18.104.22.168.1 The scale of technology with which it continues to drive network and
centralisation of core activities.
22.214.171.124.2 It provides its customers with great value for money and delivers
innovative services with reduced costs.
126.96.36.199.3 It introduces more services over time, providing increased capacity and
more efficient services every time.
188.8.131.52 ORGANISATIONAL CAPIBILITY.
Vodafone Group PLc. has strong presence in the enterprise market, in large
corporates as well as in small and medium sized businesses which helps it to
establish itself confidently in new, emerging global markets.(www.vodafone.com).
184.108.40.206 HUMAN RESOURCE.
Vodafone has developed a brand essence, “Red, Rock Solid, Restless”, which
communicates a common way of behaving which is designed to enhance
business performance and customer orientation. It also aims to the well being,
treat people with respect, engage employees, and offer attractive incentives and
opportunities. Over 4,500 managers across the group had completed 36,000
hours of dedicated total communications training. (www.vodafone.com).
Vodafone has established a set of six core competencies to build up on their
220.127.116.11 Delivering results – The ability to set measurable targets and managing
time and to get proper resources is essential.
18.104.22.168 Customers Delight -- The employees should appreciate the value of
having profitable customers.
22.214.171.124 Performing through people – This can be done by developing the working
environment by creating mutual trust and respect for others.
126.96.36.199 Creating a personal difference – Vodafone has certain high standards
and the staff strives to put on some extra efforts and takes up responsibility.
188.8.131.52 Managing a changing environment – Cooping up with the change is
184.108.40.206 Communicating for impact - Vodafone values the aptitude to
communicate clearly, concisely and confidently.
2.1.9 PRODUCT PORTFOLIO.
The basic product line offered by Vodafone Group PLc is the communication
services. The company has a range of mobile handsets integrated with PC and
internet facilities. Wireless facilities like 3G and HSDPA (High-Speed Download
Packet Access) and fixed line broadband services like DSL (Digital Subscriber
Line) are also completely new technologies for the users. The consumer can also
take the benefits of consumer push email service, accessing instant messaging
services and images and videos sharing from their handsets.
2.1.10 RECENT PERFORMANCE.
Vodafone Group PLc has shown immense growth in last few years. Currently the
company’s services are spreaded over 32 countries. For the last financial year
the total market capitalisation of the Group was approximately £79 billion with a
turnover of £35,478 million and the number of issued shares was
Vodafone Group PLc has been awarded as the most powerful brand in UK and
11th globally in the BrandZ ranking. The Group also has the awards for the best
innovations and for saving environment by its green work strategies.
2.2 EXTERNAL ENVIRONMENT
2.2.1 PESTEL ANALYSIS:
“The PESTEL framework categorizes external environmental influences into six
main types: political, economic, social, technological, environmental and legal”.
Johnson (2008 p 65).
220.127.116.11 POLITICAL FACTORS
18.104.22.168.1 Have to face risks from laws and regulations of different governments in
22.214.171.124.2 Member of key industry trade associations on public policy issues, like:
World Economic Forum
International Telecommunication Union.
126.96.36.199.3 Group policy for not making any political donations or political support,
in which it has no legitimate business interest.
188.8.131.52.4 Vodafone has a commercial alliance with Manchester United football
team and Ferrari formula one team.Vodafone is able to develop new value added
services specifically for Manchester United fans. This dual branding exposes the
Vodafone name in countries where it may not have been previously known.
184.108.40.206 ECONOMICAL FACTORS.
220.127.116.11.1 In the year 2009, the GDP growth is estimated to be 6.9%.
18.104.22.168.2 Partner network strategy enables the group to implement its global
services in new territories, extend its brand reach into new markets, and create
additional revenue without any investment.
22.214.171.124.3 Vodafone contributes directly to countries in which it operates through
licence fees, taxes, and by purchasing products and services. With the ‘cash
value added’ parameter Vodafone has added £12.3 billion to the global economy
126.96.36.199.4 Low penetration and low GDP rates in emerging markets restricts the
group from revenue growth opportunity in entertainment and internet services.
188.8.131.52 SOCIAL FACTORS.
“Social investment is not an add-on to business activities, but at the heart of how
to engage with the communities where the customers, employees, investors and
suppliers live”. (Vodafone Group Plc Social Investment Policy).
184.108.40.206.1 Special accessible features and services for disabled and elderly
people, and other customers who find it difficult to use mobile phones.
220.127.116.11.2 Vodafone Group PLc. supports emergency telecommunications
systems by having mobile technology for responding to disater situations.
18.104.22.168.3 Provides mobile services and monetary contribution for increasing
awareness on health, education, and welfare issues.
22.214.171.124 TECHNOLOGICAL FACTORS.
126.96.36.199.1 Innovative services provided via 3G/3G broadband (HSDPA) with
working towards reducing the costs.
188.8.131.52.2 An MVNO (Mobile Virtual Network Operators) leases capacity from a
network operator, which has helped to create dramatic reduction in mobile prices.
For example, Tesco mobile in UK using O2’s network to run its services at lowest
184.108.40.206 ENVIRONMENTAL FACTORS.
220.127.116.11.1 Vodafone has direct control over the running of its networks. It has a
strategy to reduce the energy use and control impact on climate change.
18.104.22.168.2 The company’s special division recycles more than 95% of the network
equipment and all local operating companies collect mobile phones for reuse and
22.214.171.124.3 The Group contributes to funding independent scientific research to
resolve scientific uncertainty in areas identified by the World Health Organization
126.96.36.199.4 Emphasis over video conferencing to reduce the pollution from traveling
188.8.131.52 LEGAL FACTORS.
184.108.40.206.1 Privilege leave entitlements are recognized as a liability, in the calendar
year of rendering of service, as per the rules of the company.
220.127.116.11.2 Contribution to Superannuation fund is being made as per the Scheme
of the Company.
2.2.2. PORTERS 5 FORCES:
18.104.22.168 COMPETITIVE RIVALRY:
Vodafone Group PLc has a number of strong rivals across the world. As the
company is slightly poor in manufacture of mobile handsets it can face a strong
competition from Virgin, O2, Nokia, Samsung, Sony and T-mobile whereas in
telecommunication services the group has to face a rivalry from Bharti AirTel,
Orange, Virgin, Reliance and O2. To overcome the challenge of competitive
rivalry measures like innovative features, new product launch and cost reduction
can help the group to take the advantage over its rivalry products.
In increasing technological world there can be many substitutes for the products
and services Vodafone Group PLc is providing. PDAs are very common
substitutes for the mobile phones and for other services personal computers,
landline phones, internet, satellite phones etc. can be the substitutes.
22.214.171.124 NEW ENTRANTS:
Telecommunication market is spreading very quickly all over the globe. Vodafone
Group PLc. Is facing threat from the upcoming new brands like LHS, Debitel and
126.96.36.199 BARGAINING POWER OF BUYERS:
Vodafone has a threat from its rivals as the customers have more choices from
new packages from other operators. The potential buyers of the Group come
from every segment of the market. The advanced technological services like
gaming and entertainment are mainly used by the baby boomers and on-mobile
internet services are generally preferred by the working class. To maintain the
consumers segments, the Group needs to stick to the requirements and needs of
the consumers and proper promotion strategy has to be adopted.
188.8.131.52 BARGAINING POWER OF SUPPLIERS:
Vodafone Group PLc. has its own certified and chain suppliers. It assesses new
and existing suppliers for compliance with the Code of Ethical purchasing, so
there’s hardly any problems regarding suppliers for the business.
3. SWOT ANALYSIS:
“It deals with the Strengths, weaknesses, opportunities and threats of a
company. S.W.O.T analysis involves analyzing the external and internal
marketing environment”. Kotler (2006).
1. By referring recent performance, the Group has
global experience and ability to deploy across
2. With Manchester United and Ferrari, Vodafone
enabled to develop its own global presence, as
a political factor.
3. Having a huge product range, hence
differentiated and innovative services.
4. As explained before in resources, the Group
has a well trained and innovative human
1. Competitive rivalry in Porter’s 5 forces has
explained that the company is having a weak
product range e.g. Mobile handsets and other
2. By company’s financial reports it can be
derived that the Group is investing a huge
amount on research and development and
tangible assets which finally lower the profits.
1. By taking the social aspects into consideration,
increasing trend of mobile phones is an
advantage to the Group which can help it to
increase its sales.
2. The Group has competitive advantage, as it is
the innovator of new technologies e.g. 3G,
HSDPA as explained in technological factors of
3. High disposable income and decreasing price of
electronics in Europe. Hence the Vodafone
group has an advantage as it is well established
in European countries.
1. Declining economy and decrease in the value
2. Group policy of making less political
interference, with reference to political factors.
Hence strict rules of different government.
3. With a number of new entrants there is high
competition in the emerging markets with
upcoming brands and a huge range in new
4. Low penetration and low GDP rates in
emerging markets restricts the group from
4. STRATEGIC CHALLENGE OR ISSUE.
RIVALS AND THE HIGHLY COMPETITIVE MARKET.
Vodafone Group PLc. has shown development in all the aspects of the business.
The company is well established in the global market with excellent figures for
profits and its success. At this position Vodafone Group has some key issues
and challenges to be faced which are proving as hindrances in the path of its
success. The major problems faced by the Group are its rivals and the highly
competitive market. The company is facing strong competition in the
telecommunications and product segments. The brands like AirTel, Orange,
Virgin, Reliance, and O2 are among the major rivals of the Vodafone Group. The
issues which are of major concern are that the competitors could be having
better suppliers and better network providers. Every year the Vodafone Group
PLc spends a huge amount on its marketing strategies but still it is facing a very
high competition in the market.
To overcome this problem there could be internal and external factors, by
implementing these, the companies can develop its strategies. Internal factors
include betterment of human resource and technological advancement. External
factors can include differentiation of products and cost leadership.
As the Vodafone Group PLc is the telecommunication leader it can develop itself
and can bring its footprint in rest of the countries. But this needs to overcome the
problem of competition in the market. So by working and improving on its
marketing and other strategies the group can be on top of its rivalry group.
5. STRATEGIC OPTIONS
5.1 RESOURCE BASED STRATEGY-
5.1.1 (Option -1) Human resource is associated with the people working in the
organization .an efficient, talented and trained human resource can help
Vodafone Group PLc to get and acquire the best talent from a huge and
educated work force. A proper procedure of selection, training, and development
of the employees and proper incentives and rewards is very essential to motivate
the employees and get the best out of them. For Vodafone Group PLc strategy is
very essential to conquer its rivals in terms of products and services.
5.1.2 (Option -2) Technological advancement can be another option to increase
the reputation of the company and to overcome its competitor’s strategies. The
company has to give emphasis to the research and development department to
get new and innovative ideas for its products and services offered. The company
can take the advantage of its innovative services via 3G/3G broadband
5.1.3 (Option -3) Marketing and sales strategies can be a efffective option to
have a power over its rivals. Innovative promotional strategies, meaningful and
attractive slogans like “Hutch is now Vodafone” can be very helpful for the
comapany’s popularity. Sales strategies covering special offers , lower tarrif
rates, personalised servicing and a proper coustomer service centre can have a
strong influence on the consumer market which can help Vodafone Group PLc to
increase its sales and conquer its rivalry competition.
5.2 ENVIROMENT BASED STRATEGY-
5.2.1 (Option -4 ) Cost is a major part of any business as it goes as an essential
factor to attract the customers towards the companies services and the products
offered. As the company is spreaded globally, Vodafone Group PLc can reduce
its costs by centralise its services and by reducing the expenditure on its
capitalisation. With lower services rates the Group can establish itself in the
countries where there is low disposable income and amoungthe lower class
5.2.2 (Option- 5) The strategy for differentiation of products and services from its
competitors is very essential for Vodafone Group PLc. The company and its
rivals almost have the same product line , so it becomes essential for the Group
to defferentiate its products and services by using innovative and better
technology to place its product in the market as the customers first choice. Lower
tarrif rates, attractive internet plans etc could be introduced in the market to take
the lead over its cometetors.
6. STRATEGY SELECTION
OPTION CONSISTENCY SUITABILITY VALIDITY FEASIBILITY BUSINESS RISK
YES YES YES YES NO YES
YES YES NO NO YES YES
Marketing and sales
NO YES NO NO YES YES
NO NO NO NO YES YES
Differentiation YES YES YES NO NO YES
6.1 STRATEGY SELECTION CRITERIA. By Johnson (2008 p 357)
“The purpose of the organization, a prime test of any option has to be its
consistency whether it is in agreement with the objectives of the organization. In
a business context, this is likely to be the mission and its ability to deliver the
agreed objectives of the organization”.
“Suitability means to be appropriate for the context of the strategy of the
organization both internally and externally. The environment can be explored
from the mixture of opportunities to be taken and threats to be avoided”.
“Validity means that the calculations and other assumptions on which the plan is
based are well-grounded and meaningful. In addition, many options will use
business information that may be well grounded is background materials or
alternatively, doubtful in its nature”.
“Feasibility means that the proposed strategies are capable of being carried out.
Although option may be consistent with the mission and objectives, there may be
others difficulties that limit the likelihood of success”.
An option may lack feasibility in three areas:
184.108.40.206 Culture, skills and resources internal to the organisation.
220.127.116.11 Competitive reaction and external factors.
18.104.22.168 Lack of commitment from managers and employees.
6.1.5 BUSINESS RISKS.
22.214.171.124 Financial risk analysis: Cash flow, breakeven, company borrowing
requirements, financial ratio analysis.
126.96.36.199 Sensitivity analysis: Optimistic assessment, pessimistic assessment.
188.8.131.52 Scenario projections: Broader view of future developments; can take
qualitative as well as quantitative view; less concerned with future and
more with contrasting views.
6.1.6 ATTRACTIVENESS OF STAKEHOLDER
Includes the following factors:
184.108.40.206 Financial risks to shareholders
220.127.116.11 Employment levels for employees
18.104.22.168 Management opportunities or redundancies
22.214.171.124 Broader community issues such as environmental concerns
126.96.36.199 Government response to strategy initiatives.
7. STRATEGY IMPLEMENTATION.
Vodafone Group PLc has shown immense development in the emerging market
of technology. The Group has always reacted to its rivalry strategies and every
time, the company has brought a positive change in the market and has
innovated technologies which has helped the Group to retain its customers and
provide its best products and services to them.
After a complete analysis of the Group’s resources and environmental factors, it
has been proved that the company is very good on its strategy formation but the
area which can effects the company’s reputation and make the Group stand
lower to its rivals is Human Resource.
Human resource of an organization is very important factor in order to strive in
this competitive market of today’s world. The Group has to utilize its human
power efficiently in order to which the company has to improve itself on the
process of man power planning, recruitment, selection, training and development
and staff retention strategies. Man power planning includes the proper estimation
of employees and talent required in the future. Recruitment process can be
improved by using proper techniques for making the choice of the workforce.
Selection criteria should be made according to the nature of work of the
employees and the proper assessment is needed to acquire the best talent.
Training and development are the factors which can help Vodafone Group PLc to
make its employees understand the nature of the work and the objectives of the
Group; it will also make the Group to utilize maximum efficiency and talent from
the trained workforce. Finally, the Group has to provide proper strategies for
incentives and rewards of its employees in order to decrease the staff retention
rates and to utilize its full man power.
Proper strategy on human resource can make Vodafone Group PLc standing on
top of the business world. A proper and trained human power has always been a
competitive advantage for any business. With a good human resource the
company can express itself in a better and a broad way which will help the Group
to overcome the problem of competition and provides a better platform in the
future then that the company is holding now.
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