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BUS020C415S Business Strategy Assignment Level 5

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INTRODUCTION

Business strategy is identified as a long-term action plan which is designed by the organisation to accomplish particular goals and objectives. It is a master plan which is applied by each and every enterprise with a motive to secure a competitive and strong position in the marketplace. It is also essential and beneficial for the company to attract a large number of customers in a limited time duration. The main aim of the enterprise is to develop an effective strategy in business is to achieve effectiveness, mobilising resources, utilising and perceiving opportunities, securing advantageous positions, directing behaviour and efforts, meeting threats and challenges and gaining command over the effective situation (Ackermann and Audretsch, 2013). All these are highly important and useful for the organisation to gain a competitive edge and benefits easily. This report is based on Vodafone, It is a British multinational telecommunication industry headquartered in London, UK.  This report is based on different tasks which include PESTLE Analysis, Ansoff’s growth vector matrix and many others that affect business operations. Organisational capabilities and internal environment are also determined in this study. Bowman’s strategy clock model and g Porter’s five forces model are also evaluated in this project.

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TASK 1

P1 Impact and influence the macro environment

Vodafone is a telecommunication company which applies different macro and micro factors that have a high effect on business operations and activities in an effective and efficient manner. There are different elements that affect the company's capability to service its customers and establish business operations. The external environment includes two factors such as macro and micro that highly influence on marketing and business strategy. It has also impacted the process of decision-making regarding the achievement of long-term growth and success in the marketplace (Annabi and McGann, 2013). This factor includes PESTLE analysis which affected its performance and profitability in a direct and indirect manner. This force covers six elements Political, Economic, Social, Technological, Legal and Environmental. The description and effects of these factors are determined below:

(I) PESTLE model for environmental analysis:

Political Factor:  The United Kingdom's government keeps on making alterations in all the policies and functions that they have therefore, it is very much needed for organisations to locate all the changes that are being made by them. Modifications in taxation policy can reduce the profitability of firms. When Brexit took place it impacted negatively on telecommunication context which raised the rates of services than previous ones (Auzair, 2011). For Example: in some parts it is being located that Vodafone which is one of the largest companies in the world was also affected as the radiation of network towers can harm children immensely and for this, they have to pay high charges to the government on a regular basis.

Social Factor: It is located that consumers ask for more and pay less which ultimately decreases the cost of products and services that they are offering at the marketplace of both domestic and international levels. For example: It has been analysed that smartphones have changed the whole scenario which ultimately impacted positively in attitude of consumers in this sector.

Legal Factor: There are an ample number of legislations which are being made by the government of the United Kingdom. some of them are the 1974 Act of Sales of Goods, the Health and Safety Act and so on. it is mandatory for firms to follow them in an appropriate manner as failure into this may lead firms to face issues like extra charges can be charged by the government and a decrease in reputation as well can be seen.

Economic factor: In the UK various drastic changes occur after the recession which directly affects the buying behaviour of the customers. This is a negative issue which defines the war of price between various competitors (Azar, 2011). In the context of Vodafone has emerged in which they offer smartphones for communicating in an emergency. In addition to this, it is also vital for firms to effectively understand consumer needs in order to provide them with better services which mat lead in enhancing their performance level at market place.

Environmental factor: Under this, Vodafone include appropriate programs in which recycle their phones In appropriate ways by using the mobile phone. In addition to this, they also provide monetary terms in phone exchange. By this, they improve their performance level. On the other side, the negative impact of the organization is higher energy costs.

Technological factor: As per today's market and business, advancements in technologies are rapidly taking place. With the help of this company enhance their performance level at market place by modifying their technologies. Along with this, the company also provide opportunities in which they understand the customer's needs and provide them same for attaining better results. To attain better success, it is important for a company to improve their process by implementing advanced technologies within its workplace so that it easily serves quality services to its target customers and attain their satisfaction.

(II) Ansoff’s growth vector matrix to measure the business's strategic positioning

It is a marketing planning techniques which mainly support a business organisation in identifying its market growth and product. This matrix has four elements of marketing strategies such as product development, market penetration, diversification and market development (Bharadwaj and et. al., 2013). It is applied by Vodafone which assists them in maximising their revenues and implementing their business strategy in systematically. All these are identified as below:

Market Penetration: It is identify as an essential process which assist the Vodafone's in order to increase sales for their present service and products in existing place. It is a fundamental tool for the company in order to advertise and establish their available commodity in the actual trade by conducting market analysis. For example: With this type of strategy, Vodafone increased its sales and revenues over a few years. By applying this strategy, the company measure the parameters of the local and regional marketplace to meet predetermined objectives.

Product development: It is another important part which is essential and beneficial for the organisation to develop their product in the marketplace. In this, Vodafone provides innovative services and products in the present marketplace. Thus, the business entity has introduced their new Wi-Fi services newly in the United Kingdom in their available marketplace. For example:  Different competitors of Vodafone such as EE, BT, O2, Three and BT, Giff-gaff and many others (Bucolo and Matthews, 2011). All these produce similar types of services which affect business performance. So to compete with them, the company has to develop Broadband in a reasonable price at the United Kingdom and Europe. 

Market development: It is identified as an important and best approach where Vodafone advertise its existing service in the new marketplace. In this stage, business organisations have been innovating their new wireless commodities in the global marketplace. Variation in the geographical region, the enterprise has to create innovative marketing and distribution approaches.

Diversification: This telecommunication industry has to advertise its new commodity in a new area. In this, Vodafone has been facing different challenges and problems in respect of attracting a large number of customers. This approach is essential for planning an effective and attractive strategy in the marketplace with a motive to maximise their consumers.

TASK 2

P2 Organisation Capabilities and Internet Environment

(I) Concept of strategic capability

There are various kinds of tactics which are being utilised by each and every kind of business that competes with one another for various reasons like customers, revenue along market share (Grover and Kohli, 2013). There are various kinds of strategies which are being made by the leader of the business which can mainly shape them along with implementing them in an effectual manner.

Strategic AbilitiesThere are various kinds of business abilities which are being mainly utilised for the techniques which need to be focused on for surviving and increment for the incentive after some time. There are a number of techniques which are being used by businesses along with availing many kind of benefits, assets and positions within the market. There is no kind where there is just one strategy which is being formulated for taking the estimation and note of key abilities. Surveying the vital capacities which can be expressed as a mind-boggling process because of the number of different components which should be tended to. The procedure of characterizing the methodologies of business can be expressed as known as key esteem examination.

This for the most part relies upon the information of yearly reports, open reviews and advertising patterns for investigating which sort of business has what it takes and the capacities which others need (Jocovic and et. al., 2014). As the business of Vodafone is changing they are obtaining extra assets which must perform new sort of systems esteem investigation. There are different sorts of elements which can possibly contribute to the business capacities. Different resources like money and property alongside different licenses principally give their commitment to the capacities of business for making and actualizing procedures. There are different variables of the vital capacity including the HR and the structure of the organization as abilities of representative and procedure of the organization basically give their commitment to the business aggressiveness.

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(II) ‘VRIO’ model to determine the strategic capabilities

This is one of the effective tools which is being stated which is mainly being utilised for determining and analysing the number of tools which are mainly being utilised by various internal sources. There are certain potential sources which are being used to identify the kind of source which can be used for attaining and bringing sustainability along with competitive advantage.  

Valuable: The very first question which mainly arises is towards the framework of the resources which are being allocated with the motive of gaining the platform of opportunities and thus dealing with negative aspects. Those kinds of resources are valuable in nature if the answer of the question is in yes. If the resources are being utilised in an optimum manner, value and outputs are much more effective in nature (Kalyani and Sahoo, 2011). This is mainly being done with the motive of bringing improvisation within the differentiation along with minimising the price of the product. For Example: There are various kinds of conditions which are not being met by the resources which in turn can mainly lead to the loss of position within the marketplace. Hence, it is highly essential for the Vodafone's to evaluate the resources which can mainly bring modifications to make it less valuable. 

Rare: There are numerous kinds of resources which are mainly acquired by many of the companies which are as rare in nature. There are a number of resources which has the potential to give the company a competitive advantage within the marketplace. The main reason behind the use of identical resources is that it will help in attaining superior performance. It is needed by the company that they do not ignore the importance of resources along with its abilities which are highly essential for staying up within the market. 

Costly to Imitate: There is a high cost which is being involved while using the resource and if it is not present to a company then it may purchase it from a source which can provide it (Klettner, Clarke and Boersma, 2014). There are various kinds of imitation which can be done for the resources and thus mainly provide products and services. There are some of the resources which the company possesses that are costly, and non-imitable and thus can bring sustainability in competitive advantage. There are various kinds of resources which have been determined by Vodafone which are non-imitable:

  • There are some of the old causes, there are numerous resources which have been developed for a long period of time. These are the resources which are found difficult to imitate.
  • This can not be mainly determined by an organisation for any kind of resources which are mainly being caused for the competitive advantage.
  • There are a number of resources which are being utilised based upon the culture of the company which in turn can be related to interrelated relationships.

Organised to Capture Value: There are various kinds of resources which mainly do not provide any kind of benefit if their value of is not being determined in proper time. There are various kinds of activities which are highly essential for organising the system of management, processes, policies along with structure of a company (Köseoglu and et. al., 2013). For example: These kinds of activities are very helpful as these kinds of activities have abilities to create the value and cost of finding or imitating the resources and abilities. This in turn will enable the company to bring sustainability along with competitive advantage.

(III) Identification of the organisation's strengths and weakness

Strength

Weakness

·       Massive Market Coverage: Vodafone is being positioned 395th among the universe's top 2000 brands by Forbes. This organization is known for its system mistakes and wide conveyance. This organization has the second biggest base settled in India. Sit for the most part works in more then 30 nations.

·       Revenue Generated: Billions of dollars are being produced by this organization every year. In 2016 this organization produced 87.3 billion dollars and along these lines, it has been positioned 104 in its deals over the globe and number 84 inside the market esteem.

·       Marketing: Advertising of this organization is very compelling in nature. Vodafone Pug is known over the globe to take after the clients of this organization all over (Murano and et. al., 2011). Alongside this Vodafone Zoo-zoo was a splendid and successful crusade which changed over numerous clients get pulled in .

·       Premium Cost: Administrations are being separated by Vodafone while its rival is entering the market. Because of its correspondence and advertising, there are different clients who surmise that Vodafone is considerably higher than its rivals (Oestreicher-Singer and Zalmanson, 2012). As a result, Vodafone is as yet ready to get some of the premium out of the clients while other telecom administrators are battling with a specific end goal to keep up the positive edges.

·       Dropping Subscriber Base: As per the graph given below, subscribers of Vodafone is mainly dropping out within the last 4 years. This is being mainly stated that the issues are being created for Vodafone who are mainly looking out for the international market scenario.

·       Dropping Brand Valuation: This is one of the essential factors which can be stated as one of the effective reason which can be seen behind customers switching to another reason (Schaltegger and Wagner, 2011). There is the brand valuation along with the subscriber base which is highly strong from the beginning but the factors have been mainly suffering from this.  

·       Losing market share in the USA: USA can be stated as the market in which Vodafone has the opportunity which can mainly demand the premium for obtaining growth (Scholes, 2015). But, this is highly clear that the company has been mainly loosing up the market to Verizon Wireless, AT& T which is mainly performing much more for the UK

TASK 3

P3 Porter’s five forces model of the telecommunication sector

As per the study of Harvard Business School Professor Michael Porter, the telecommunication sector is one of the appealing sectors that has a wide range of scope. He mainly recognised that there are a number of companies which has been keeping a close look on their competitors; but Michael Porter mainly suggested that looking beyond the actions of rivalry along with examining the various kinds of factors which in turn can make an impact on the business environment (Slack,  2015). Below are the described factors:

Another appropriate strategy is the BCG Matrix which is beneficial for Vodafone in order to improve competitive strategy and Ansoff matrix. BCG Matrix includes some parts which are determined as below:

Cash cows: Cash cows are identified as a market leader which displays broad market growth and broad market shares. They acquire more return on the business assets. They assist to cover funds, administrative costs, corporate debts and many other things which are included in Vodafone's.

Starts: Star has broad growth of a high generation of cash and market shares. They are directly related to the market. if stars keep Vodafone's reputation means support maintains their condition then they can move into the cash cows.

Dogs: It considers low market share as well as low market growth. They cannot make cash and; not take cash. Dogs don't have a decent possible to make any cash.

Questions Marks: It considers low market share so they take in low cash. It is also known as a troubled child. If it does not prosper to get a leader then it will move into the cash cow.

BCG matrix displays the condition of Vodafone in the marketplace either it declines in the dogs, stars cash cows, or in a question mark. the company have high market shares but it has a succulent challenger in the market. This matrix is essential and beneficial for the organisation to achieve long-term advantages and benefits as compared to their rivals.

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(a) Rivalry with Existing Competitors:

There are various kinds of factors which provide strength to the competitors of the Vodafone UK. Moreover, this company mainly looks out for the number of competitors which are mainly present within the marketplace and they are working in a much more effective manner. It is highly essential for the company to determine the various kinds of services and products which are being provided by the rivalry and the ways Vodafone is mainly utilising them. This type of comparison mainly has intense competition which can be enough to draw the attention of customers for the company by reducing the prices (Svee, Giannoulis and Zdravkovic, 2011). For Example: Being a global brand, Vodafone is a multi-national brand and for them, there is various kinds of suppliers along with buyers which mainly has the choice of choosing another brand over this and thus they are mainly not getting a good deal from the current market along with company.

(b) Bargaining power of Buyers:

This kind of factor is mainly being identified by the prices which are being mainly improved by the suppliers and that too in an ease kind of manner. There are a number of potential suppliers which are present within the company along with the uniqueness and getting the appealing factor from the products and services which in turn can mainly become highly essential for having the customers have better kind of alternative. For Example: So a research is being created by Vodafone and thus the price criteria is being set along with keeping competition within mind. 

(c) Bargaining power of Suppliers:

There are various kinds of factors which are mainly being identified by the Vodafone company and thus they can sort out the ways by which prices can be reduced.  Moreover, there are certain buyers who are present or the company along with how in the order will be from their side. However, an analysis of the costs will be done which are being utilised for shifting from one product to another from the competitors (Svee, Giannoulis and Zdravkovic, 2011). For example: When there are less amount of customers, they have power more than the company within the marketplace. But the customers are high in number in the case of Vodafone.   

(d) Threat of new entrant:

When there is an entry within a new market, the position of the company can be much more affected by that. If the money is not present much along with efforts which are done for entering into the new market and thus compete it in much more effectual manner. Then it is mainly needed for having the small type of security with the help of technologies which are being mainly possessed and due to which high level of competitors can enter within the market and can make a negative impact on the position of the Vodafone company. For Example: A favourable position can be gained only if there; are strong and durable barriers present within the entry for availing various kinds of benefits (Bharadwaj and et. al., 2013).         

(e) Product Substitutes:

This can be expressed with regards to the probability for the clients who are paying special attention to the different sorts of methods for doing what precisely the organization has been doing. This can be made significantly more clear by a case that if there is a supply of exceptional item benefits which primarily adjust a fundamental procedure and hence individuals can substitute this sort of process in manual way or it should be possible by outsourcing it. For example: Substitution which is as a rule simple and modest for influencing it significantly more to debilitate the situation on the organization is in and in this manner can put the benefit proportions in peril.

TASK 4

P4 Applying Bowman’s strategy clock model, examine the strategic direction and options

Strategic direction can be identified as an essential process and activities which help to accomplish predetermined objectives and goals in an effective manner. It is the role and responsibility of a manager to provide effective direction to their employees with the aim of gaining a competitive edge in a limited time duration (Bharadwaj and et. al., 2013). In order to suggest and consider the entire strategic direction of the enterprise. This business organisation use Bowman's clock strategic model which supports an enterprise to investigate the different elements.

Bowman's strategic clock model: It is an effective and essential model which is used by the organisation in order to achieve a competitive edge and benefits in a limited time duration. This model was established by David Faulkner and Bowman with a motive to increase customer attraction in the organisation. This framework includes different steps which are shown under:

Position 1: Adverse added value and cost: It is a position that will not be considered as part of competitive advantage in business operations and services. In this perceived value of clients shows the low price of products that adversely affect business operations and activities. In the case of Vodafone, the position of the company in the marketplace is more powerful and famous which is beneficial for them to gain maximum profit. Under this position, Vodafone add some value and cost in their electronic products which assists in attracting a large number of customers easily.

Position 2: Adverse price: It is identified as a second position which is also beneficial and important for the organisation to set an effective price of their electronic items (Azar, 2011). It is the role of a business manager is to identify market demands and customers need towards business services and products. For example: In this service cost is not high and the volume of outcomes is not less which enables enterprises to gain higher benefits. It is identified as an adverse position of the Vodafone in the marketplace. Under this position, adverse and high prices of the products have a high effect on business performance and profitability. This position maximises competition for a company which is not good for them to survive in the marketplace easily. 

(Source: Bowman's Strategic Clock, 2015)

Position 3: Hybrid: At this position, the situation shows the maximum cost besides the products and service differentiation. It mainly emphasises on customer perception by providing quality products and services at affordable prices. It is a more effective approach for the organisation to gain a strong position of the company in the marketplace (Auzair, 2011). Under this situation price of the product is higher which has adverse impacts on business operations. In order to complete this, Vodafone try to decrease their product prices which is beneficial to gain competitive advantages easily.  

Position 4: Differentiation: Under this position, Vodafone differentiates its products and services in the marketplace and as per the needs and wants of customers. In this position prices of the products are classified as per their quality and quantity. The company does not belong to this type of position because electronic equipment cost is diversified as per business products.  For example: In this, Vodafone disseminates and develops strong brand knowledge among customers and in the marketplace. It is also beneficial to build loyalty and customer base in the enterprise

Position 5 Focused differentiation: In this added cost value is higher which is highly demanded by the customers for consuming perceived and quality value (Annabi and McGann, 2013.). It is important for Vodafone to focus on their new products and services which helps to them to maximise sales and revenues of the company in a limited time duration. For example: Vodafone directly promoted their goods and services in the market which assisted in increasing turnover and sales in a given time duration. So it is good for the organisation to maintain long-lasting relationships with customers. Under this position, Vodafone's mainly focused on customer needs and wants which is essential for them to maximise their revenue in a limited time duration. In this, Vodafone introduced One Net, a mobile voice service and hosted fixed for small and medium organisations.

Position 6: Dangerous High Margin: It can be identified as the hazardous positioning strategy of the company in which cost determination is high without providing the detected value of service. For example: Customer of Vodafone continuously purchase their services and products. Thus, it will maximise the customer base in the enterprise as well as gain a competitive edge in a given time duration. 

Position 7: Monopoly Costing: Under this, business condition, Vodafone does not light and stress the value of products and services which is provided by the company to its clients and consumers in an effective and systematic manner (Ackermann and Audretsch, 2013). For Example: In various countries, the monopolies are stringently direct in respect of opening themselves from faxing product and service prices as the demand and desire of an organisation.

Position 8: Market share Damage: It is another position which can be identified as the competitive class. In this, the cost quality is state observed with the middle product scope along with the minimum quality which is perceived by products and services that track to user loss and failure in market share of each and every business organisation. Under this type of situation, company lose their market share which is not good for them to easily compete with their challengers.

Vodafone applied a focused differentiation strategy in this they introduced One Net, hosted fixed as well as mobile voice services for SMEs. It is charged per user, claims and month the total net solutions can be 16%-21% cheaper than small and medium businesses pay for typical services presently.

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CONCLUSION

From the above-mentioned report, it can be concluded that strategy is essential and important for the business organisation to accomplish its long-term goals and targets. Companies use different techniques for expanding their business operations such as; Porter’s five forces model, PESTLE Analysis,  Ansoff’s growth vector matrix, VRIO’ model, Bowman’s strategy clock model and many others that highly support business organisation to maintain their long-lasting relationship with customers and employees. All this model supports the organisation to analyse industry and the market as well as gain competitive benefits within an organisation. So it turns to the achievement of long-term growth and success in the marketplace.

REFERENCES

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