Business strategy is identify as a long term action plan which is design by the organisation to accomplish a particular goals and objectives. It is a master plan which is apply by the each and every enterprise with motive to secure a competitive and strong position in marketplace. It is also essential and beneficial for the company to attract large number of the customers in limited time duration. Main aim of the enterprise is to develop effective strategy in business is to achieve effectiveness, mobilising resources, utilising and perceiving opportunities, securing advantageous position, 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 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 includes PESTLE Analysis, Ansoff’s growth vector matrix and many other that effects on business operations. Organisational capabilities and internal environment is also determined in this study. Bowman’s strategy clock model and g Porter’s five forces model are also e
P1 Impact and influence the macro environment
Vodafone's is a telecommunication company which apply different macro and micro factor that are highly effects on business operations and activities in an effective and efficient manner. There are different elements that effects the company capability to services their customers and establish business operations. External environment includes two factors such as macro and micro that highly influence on the marketing and business strategy. It's also impacted on the process of decision making regarding achievement of long term growth and success in marketplace (Annabi and McGann, 2013). This factor includes PESTLE analysis which effected its performance and profitability in a direct and indirect manner. This force cover six elements such as Political, Economic, Social, Technological, Legal and Environmental. Description and effects of these factors are determined as below:
(I) PESTLE model for environmental analysis:
Political Factor: 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 profitability of firms. After 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 part it is being located that Vodafone which is one of largest company in the world was also got affected as radiations of network towers can harm children immensely and for this they have to pay high charges to government on a regular basis.
Social Factor: It is being located that consumers asks for more and pays less which ultimately decreases cost of products and services that they are offering at marketplace of both domestic and international level. For example: It has been analysed that smart phones have changed the whole scenarios which ultimately impacted positively in attitude of consumers under this sector.
Legal Factor: There are ample number of legislations which are being made by government of United Kingdom. some of them are: 1974 act of sales of good, 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 government and decrease in reputation as well can be seen.
Economic factor: In UK various drastic change are occur after the recession which directly affect on the buying behaviour of the customers. This is negative issue which define the war of price between various competitors (Azar, 2011). In context of Vodafone's has emerge in which the they offer smart phones for communicating within emergency. In addition of this, it is also vital for firm to effectively understand the consumer needs in order to provide them better services which mat leads 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 of this they also provide monetary term in phone exchange. By this they improve their performance level. On the other side, the negative impact of organization is higher energy cost.
Technological factor: As per today's market and business, advancement in technologies are rapidly take place. With the help of this company enhance their performance level at market place by modifying their technologies. Along with this, company also provide take opportunities in which they understand the customers needs and provide them same for attaining better results. For attaining better success, it is important for company to improve their process by implementing the advances technologies within their workplace so that they easily serve quality services to their 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 apply by Vodafone which assist 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: This type of strategy, Vodafone's increase their sales and revenues over few years. By applying this strategy, company measure their parameters of local and regional marketplace to meet with predetermined objectives.
Product development: It is another important part which is essential and beneficial for the organisation to develop their product in marketplace. In this Vodafone's provide innovative services and products in the present marketplace. Thus, business entity has introduced their new Wi-Fi services newly in United Kingdom in their available marketplace. For example: Different competitors of the Vodafone's such as EE, BT, O2, Three and BT, Giff-gaff and many other (Bucolo and Matthews, 2011). All these are produce similar type of services which effects on business performance. So for competing them, company has to developed Broadband in reasonable price at United Kingdom and Europe.
Market development: It is identify as an important and best approach where Vodafone's advertise its existing service in new marketplace. In this stage, business organisation has been innovating its new wireless commodity in global marketplace. Variation in the geographical region, enterprise has to create innovative marketing and distribution approach.
Diversification: In this telecommunication industry has to advertise their new commodity in new area. In this, Vodafone's has been facing different challenges and problems in respects of attracting large number of the customers. This approach is essential for plan an effective and attractive strategy in marketplace with motive to maximise their consumers.
P2 Organisation capabilities and internet environment
(I) Concept of strategic capability
There are various kind of tactics which are being utilised by each and every kind of business who competes with one another for various reasons like customers, revenue along with market share (Grover and Kohli, 2013). There are various kind of strategies which are being made by the leader of the business which can mainly shape them along with implementing them in effectual manner.
There are various kind of business abilities which are being mainly utilised for the techniques which needs to be focused for surviving and increment for the incentive after some time. There are number of techniques which are being used by business along with availing many kind of benefits, assets and position within 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 mind boggling process because of the quantity of different components which should be tended to. 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 alongside advertise patterns for investigating which sort of business has what it takes and capacities which others need in (Jocovic and et. al., 2014). As business of Vodafone is changing and the are obtaining extra assets which must perform new sort of systems esteem investigation. There are different sort of elements which can possibly contribute inside the business capacities . Different resources like money, property alongside different licenses principally gives 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 organization basically gives their commitment to the business aggressiveness.
(II) ‘VRIO’ model to determine the strategic capabilities
This is one of the effective tool 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 of the sources which are being used to identify 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 deal with negative aspects. Those kind of resources are valuable in nature if the answer of the question is in yes. If the resources are being utilised in 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 product. For Example: There are various kind of conditions which are not being met by the resources which in turn can mainly lead to loosing up of position within marketplace. Hence, it is highly essential for the Vodafone's to evaluate the resources which can mainly bring modifications for making it less valuable.
Rare: There are numerous kind of resources which are mainly acquired by many of the companies which are as rare in nature. There are number of resources which has the potential of giving company competitive advantage within the market place. Main reason behind the uses of identical resources are that it will help in attaining the superior performance. It is needed by 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 the high cost which is being involved while using the resource and if it is not present to a company then it may can purchase it from the source which can provide it (Klettner, Clarke and Boersma, 2014). There are various kind of imitation which can be done for the resources and thus mainly provide products and services. There are some of the resources which company possesses who are costly, non imitable and thus can bring sustainability in competitive advantage. There are various kind of resources which has been determined by the Vodafone which are non imitable:
- There are some of the old causes, there are numerous resources which are being developed for the 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 number of resources which are being utilised along with based upon the culture of the company which in turn can be related to interrelated relationships.
Organised to Capture Value: There are various kind of resources which mainly does not provide any kind of benefit if the value of them is not being determined in proper time. There are various kind of activities which are highly essential for organising the system of management, processes, policies along with structure of company (Köseoglu and et. al., 2013). For example: These kind of activities are very helpful as these kind 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 organisation' s strength and weakness
· Massive Market Coverage: Vodafone is being positioned 395th among the universes top 2000 brands by Forbes. This organization is known for its system mistake 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 has produced 87.3 billion dollar 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's was a splendid and successful crusade which changed over numerous client get pulled in .
· Premium Cost: Administrations are being separated by the Vodafone while its rival are entering the market. Because of its correspondence and advertising, there are different clients who surmise that Vodafone is considerably more higher then its rivals (Oestreicher-Singer and Zalmanson, 2012). As result, Vodafone is as yet ready to get some of premium out of the clients while other telecom administrators which are battling with a specific end goal to keep up the positive edges.
· Dropping Subscriber Base: As per the graph given below, subscriber of the 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 factor 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 subscriber base which is highly strong from the beginning but the factors has been mainly suffering from this.
· Losing market share in USA: USA can be stated as the market in which the Vodafone has the opportunity which can mainly demand for the premium for obtaining growth (Scholes, 2015). But, this is highly clear that the company has been mainly loosing up the market to the Verizon wireless, AT&T which are mainly performing much more for the UK.
P3 Porter’s five forces model of telecommunication sector
As per the study of Harvard Business School Professor Michael Porter, telecommunication sector is one of the appealing sector who has wide range of scope. He mainly recognised that there are number of companies which has been keeping close look on their rivals but Michael Porter mainly suggested that the looking beyond the actions of rivalry along with examining the various kind of factors which in turn can make impact on the business environment (Slack, 2015). Below are the described factors:
Another devising appropriate strategies is BCG Matrix which is beneficial for the Vodafone's in order to improve competitive strategy and Ansoff matrix. BCG Matrix includes some parts which are determined as below:
Cash cows: Cash cows are identify as a market leader which display that broad market growth and broad market shares. They acquire more return on the business assets. They assist to cover funds, administrative cost, corporate debts and many other things which are includes in the Vodafone's.
Starts: Star has broad growth of high generation of cash and market shares. They are straightly related to the market. if stars keep Vodafone's reputation means support maintain their condition then they can move into the cash cows.
Dogs: It consider low market share as well as low market growth. They cannot make cash and not take cash. Dogs don't have decent possible to make any cash.
Questions Marks: It consider low market share so they take in low cash. It is also known as trouble child. If it does not prospering to get a leader then it will move into the cash cow.
BCG matrix display the condition of Vodafone in the marketplace either it decline in the dogs, stars cash cows, or in question mark. company have high market shares but it have succulent of challenger in the market. This matrix is essential and beneficial for the organisation to achieve long term advantages and benefits as compare t their rivels.
(a) Rivalry with Existing Competitors:
There are various kind 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 much more effectual manner. It is highly essential for the company to determine the various kind 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 the intense competition which can be enough to draw the attention of customers for company by reducing up the prices (Svee, Giannoulis and Zdravkovic, 2011). For Example: Being a global brand, Vodafone is the multi national brand and for them there are various kind of suppliers along with buyers which mainly has the choice for choosing the another brand over this and thus they are mainly not getting the 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 ease kind of manner. There are 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 to have better kind of alternative. For Example: So a research is being created by the Vodafone and thus the price criteria is being set along with keeping competition within mind.
(c) Bargaining power of Suppliers:
There are various kind of factor 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 which are present or the company along with how in the order will be from their side. However, analysation of the cost 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 the power more the company within the marketplace. But the customers are high in number in case of Vodafone.
(d) Threat of new entrant:
When there is the entry within the new market, position of the company can be much more affected with 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 being mainly needed for having small type of security by 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 negative impact on the position of the Vodafone company. For Example: Favourable position can be gained only if there are strong and durable barriers are present within the entry for availing various kind 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 sort 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 supply of exceptional item benefit 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.
P4 Applying Bowman’s strategy clock model, examine the strategic direction and options
Strategic direction that can be identified as an essential process and activities which help to accomplish their predetermined objectives and goals in an effective manner. It is the role and responsibility of manager is to provide effective direction to their employees with aim to gain competitive edge in limited time duration (Bharadwaj and et. al., 2013). In order to suggest and considered the entire strategic direction of enterprise. In this business organisation use Bowman's clock strategic model which support an enterprise to investigates the different elements.
Bowman's strategic clock model: It is effective and essential model which is used by the organisation in order to achieve competitive edge and benefits in limited time duration. This model was established by David Faulkner and Bowman with motive to increase customer attraction in the organisation. This framework includes different steps which are shown under this:
Position 1: Adverse added value and cost: It is a position that will not consider as the part of competitive advantage in business operations and services. In this perceived value of clients show the low price of products that adversely effects on business operations and activities. In cause of Vodafone's, position of the company in the marketplace is more powerful and famous which is beneficial for them to gain maximum number of profit. Under this position, Vodafone's add some value and cost in their electronic products which assist to attract large number of customers easily.
Position 2: Adverse price: It is identify 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 business manager is to identify market demands and customers needs towards business services and products. For example: In this service cost is not high and volume of outcome is not less that enable enterprise to gain higher benefits. It is identify as a adverse position of the Vodafone's in marketplace. Under this position adverse and high price of the products is highly effects on business performance and profitability. This position are maximised competition for company which is not good for them to survive in marketplace easily.
(Source: Bowman's Strategic Clock, 2015)
Position 3: Hybrid: At this position, the situation shows the maximum cost beside with the products and service differentiation. It is mainly emphasis on customer perception by providing quality products and services at affordable price. It is more effective approach for the organisation to make strong position of the company in marketplace (Auzair, 2011). Under this situation price of the product is more high which has adverse impacts on business operations. In order to compete this, Vodafone's try to decrease their products price which is beneficial to gain competitive advantages easily.
Position 4: Differentiation: Under this position, Vodafone's differentiate their products and services in marketplace and as per the needs and wants of customers. In this position price of the products are classified as per its quality and quantity. Company does not belongs this type of position because electronic equipments cost is diversified as per business products. For example: In this Vodafone's disseminate and develop strong brand knowingness among customers and in 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 the Vodafone's to focus on their new products and services which help to them to maximise sales and revenues of company in limited time duration. For example: Vodafone's directly promoted their goods and services in market that assist to increase turnover and sales in given time duration. So it is good for the organisation to maintain long lasting relationship with customers. Under this position, Vodafone's mainly focused on customer needs and wants which is essential for them to maximise their revenue in limited time duration. In this Vodafone's introduced one net, a mobile voice services and hosted fixed for small and medium organisation.
Position 6: Dangerous High Margin: It can be identified as the hazards positioning strategy of the company in which cost determination is high without providing detected value of service. For example: Customer of the Vodafone's that continuously purchasing their services and products. Thus, it will maximise customer base in the enterprise as well as gain competitive edge in given time duration.
Position 7: Monopoly Costing: Under this, business condition, Vodafone's does not light and stress over the value of products and services which is provided by the company to its clients and consumer 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 services price as the demand and desired 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 service that track to user loss and failure in market share of each and every business organisation. Under this type of situation company loss their market share which is not good for them to easily compete their challengers.
Vodafone's applied focused differentiation strategy in this they introduced One Net, hosted fixed as well as mobile voice services for SMEs. It is charge as per user, claims and month the total net solutions can be 16%-21% cheaper than small and medium business pay for typical services presently.
From the above mentioned report, it can be concluded that strategy is essential and important for the business organisation to accomplish their long term goals and targets. Company 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 other that highly support business organisation to maintain their long lasting relationship with customers and employees. All this model support the organisation to analysis industry and market as well as gain competitive benefits within an organisation. So it turn to the achievement of long term growth and success in marketplace.
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