vodafone group plc

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1. INTRODUCTION 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. 1

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Page 1: 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).


Page 2: Vodafone Group PLc

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.


“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).


2.1.1 VISION.

“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”.


2.1.2 MISSION.

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”.



Page 3: Vodafone Group PLc

2.1.3 VALUES.

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

are focused: Revenue stimulation and cost reduction in the market. Innovate and deliver on our customers’ total communications needs. Deliver strong growth in emerging markets. Drive operational performance. Pursue growth opportunities in total communication. 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: Non-governmental organisations Investors Consumers Industry forums Employees Suppliers Shareholoders Governments and regulators Local communities


Page 4: Vodafone Group PLc

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.



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.


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). 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: The scale of technology with which it continues to drive network and

centralisation of core activities. It provides its customers with great value for money and delivers

innovative services with reduced costs.


Page 5: Vodafone Group PLc It introduces more services over time, providing increased capacity and

more efficient services every time.


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). 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

success. Delivering results – The ability to set measurable targets and managing

time and to get proper resources is essential. Customers Delight -- The employees should appreciate the value of

having profitable customers. Performing through people – This can be done by developing the working

environment by creating mutual trust and respect for others. Creating a personal difference – Vodafone has certain high standards

and the staff strives to put on some extra efforts and takes up responsibility. Managing a changing environment – Cooping up with the change is



Page 6: Vodafone Group PLc Communicating for impact - Vodafone values the aptitude to

communicate clearly, concisely and confidently.



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.



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.




“The PESTEL framework categorizes external environmental influences into six

main types: political, economic, social, technological, environmental and legal”.

Johnson (2008 p 65).


Page 7: Vodafone Group PLc POLITICAL FACTORS Have to face risks from laws and regulations of different governments in

geographical expansion. Member of key industry trade associations on public policy issues, like:

World Economic Forum

GSM Association

International Telecommunication Union. Group policy for not making any political donations or political support,

in which it has no legitimate business interest. 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. ECONOMICAL FACTORS. In the year 2009, the GDP growth is estimated to be 6.9%. 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. 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

in 2007/08. Low penetration and low GDP rates in emerging markets restricts the

group from revenue growth opportunity in entertainment and internet services.


Page 8: Vodafone Group PLc 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). Special accessible features and services for disabled and elderly

people, and other customers who find it difficult to use mobile phones. Vodafone Group PLc. supports emergency telecommunications

systems by having mobile technology for responding to disater situations. Provides mobile services and monetary contribution for increasing

awareness on health, education, and welfare issues. TECHNOLOGICAL FACTORS. Innovative services provided via 3G/3G broadband (HSDPA) with

working towards reducing the costs. 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

rate. ENVIRONMENTAL FACTORS. 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. The company’s special division recycles more than 95% of the network

equipment and all local operating companies collect mobile phones for reuse and



Page 9: Vodafone Group PLc The Group contributes to funding independent scientific research to

resolve scientific uncertainty in areas identified by the World Health Organization

(“WHO”). Emphasis over video conferencing to reduce the pollution from traveling

trips. LEGAL FACTORS. Privilege leave entitlements are recognized as a liability, in the calendar

year of rendering of service, as per the rules of the company. Contribution to Superannuation fund is being made as per the Scheme

of the Company.



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. SUBSTITUTES:

In increasing technological world there can be many substitutes for the products

and services Vodafone Group PLc is providing. PDAs are very common


Page 10: Vodafone Group PLc

substitutes for the mobile phones and for other services personal computers,

landline phones, internet, satellite phones etc. can be the substitutes. 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


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. 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.



“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).


Page 11: Vodafone Group PLc


1. By referring recent performance, the Group has

global experience and ability to deploy across

many countries.

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

the company.

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

of currency.

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

revenue growth.


Page 12: Vodafone Group PLc



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.


Page 13: Vodafone Group PLc



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.


5.2.1 (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


Page 14: Vodafone Group PLc

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.





Human resource


Technological advancement


Marketing and sales


Cost leadership



Page 15: Vodafone Group PLc

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: Culture, skills and resources internal to the organisation. Competitive reaction and external factors.


Page 16: Vodafone Group PLc Lack of commitment from managers and employees.

6.1.5 BUSINESS RISKS. Financial risk analysis: Cash flow, breakeven, company borrowing

requirements, financial ratio analysis. Sensitivity analysis: Optimistic assessment, pessimistic assessment. Scenario projections: Broader view of future developments; can take

qualitative as well as quantitative view; less concerned with future and

more with contrasting views.


Includes the following factors: Financial risks to shareholders Employment levels for employees Management opportunities or redundancies Broader community issues such as environmental concerns Government response to strategy initiatives.


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.


Page 17: Vodafone Group PLc

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.


Page 18: Vodafone Group PLc


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