Marketing Strategies of Vodafone Group PLC

Executive Summary

Environmental audit the tool by which the performance of Vodafone can be identified. The audit is process in which the identification of the facts is the first step, the second step is to understand the elements, facts and figure and the last element is to identify the measure which are most liable for the problems. PESTEL analysis is the tool by which the checking and controlling of the external factors can be acknowledged (Perreault, JrCannon and McCarthy, 2013). Vodafone is a multi-national company which deals in telecommunication. It is included in the third largest position which measures both the subscribers and revenues. It is the most expensive brand in UK and this brand is estimated at 27 million pounds.

The study is concluded that the tool which have been used to evaluate the performance of Vodafone are the best measures which can be taken and considered. The corporation has the various elements which can influence its business situations. It can be concluded that the strategic growth is based on the constant learning and rectifying concepts. This can be done by auditing the elements of the entity and after doing the proper study and a deep analyses it can be decided that the corporation is on the path of success or not.

External Analysis

The external factors that the Vodafone must deal with the details of the environment in which the entity is operating, the sector, competitor and the purchasing behaviour of potential customers. The external environment has two aspects: the macro-environment that affects the all the companies and microenvironment that affects only the firms in the particular industry.

PESTEL Analysis

The following are the components of external environment which are used to analyse for Vodafone -

• Political factors- In these different factors included which affect the external environment that is regulations, infrastructure and health issue.
• Regulations– Political pressure may be brought regarding the use of the mobiles by the children and by using the phones health issue will be generate (Quester and et. al., 2007).
• Infrastructure– The infrastructure building need to support the network requires the permission with the regulatory bodies to use their lands.
• Health issue– Mobile phones effect on the health of the persons and school-going children.
• Economical factors– These factors affect the cost of the product of Vodafone.
• Cost of Licenses– The cost of acquiring the license of the mobile phones is very high.
• 3G– The network with the cost of building requires a lot of revenue to break even, but if the price is too high, the standard will not take off.

Cost of calls being down– There are constant price wars between the users of Vodafone and there are very few markets where there is a monopoly controlling the mobile market.

Socio-cultural factors– These factors affect the social trends and demographics of the corporate.

Health Issues– If the Vodafone has largest footprint in the different countries in all over the world, the company has been confronted with the competition in both developed and emerging market.

The European market is the largest market for Vodafone group but its revenue in the market are slightly decreasing (Jain, and Haley, 2009). Vodafone group has implemented differentiation strategy but the company has not launched the value-added services in both developed and emerging markets and by that they facing high price competition. While expanding geographic global footprint and diversify the products and services, the company needs to focus more resources on value-added services as the key differentiators in order to maintain the growth.Demographics – Mostly mobile phones are used by the young members of the society. In a country, where the population is ageing, which is across the European Union, the demographics may shift to the aged population ho may have less use of the mobile phones.

Social Trends

Nowadays, mobile phones become popular and having more than one is become a trend. If a trend is not having a phones this could seriously impact on the usage.

• Technological factors– In the industry of the mobile phones it has been a great deal of technological change. Mobile phones are used for the telephonic conversation but at the present time text messaging is also available and it has increased the usage. The issue of ethics as Vodafone can offer a wide variety of the mobile phones with the new technology so this will help to increase their sales revenue.
• Environmental factors– Vodafone have established a recycling program of the handset that encourage the customer top dispose of handsets in a responsible way by providing the incentives to the consumers (Berthon and et. al., 2012).
• Legal factors– Legal policies can affect the sale of the product ans the current situation of the business. It is very important for the Vodafone to update itself with latest laws and regulations.

Porter's Five Force Model

By using this model, competitor analysis takes place by understanding how the threats of new entrants, the bargaining powers of buyers, bargaining power of supplier, the threat of substitute products and the rivalry among the competing firms will effect the competitors in the industry. These five force have a direct effect on the strategies of Vodafone competitiveness.

• Rivalry with Existing competitors– Position of the Vodafone as cost leaders the competitors has a hard time to compete on the basis of price because in any aspect of logistics is inferior then the competitors will have to fall the prices.
• Bargaining power of buyers– The buyers in the mobile industry are strong. These buyers can reduce the cost leader prices but nor pass the level of the closest competitor. This ensures that Vodafone will continue to earn the profit at an above-average return to its closest competitor.
• Bargaining power of supplier – Supplier of the mobile industry is also strong (Ataman, Van Heerde and Mela, 2010). Vodafone could hold the suppliers cost down and it could make a profit even when competitors are making only average returns.
• Potential entrants – Vodafone must continue to reduce the cost below that of competitors. Vodafone can help to make the entrance into the mobile industry to its potential competitors by maintaining the level of high efficiency.
• Product substitutes– Vodafone faces a low threat of product substitutes. Substitute to be produced at a lower rate by the use of the economy of scale, their buying power and their absorption of temporary price increases that come from the supplier that do not need to be passed to the consumer

Internal Analysis

It is the process of identifying and analyse the organise the specific characteristics include the resources, capabilities and core competencies (Douglas and Craig, 2011). Internal analysis is comprised by the following elements which includes organisation current vision, mission, strategic objectives, and strategies.

Resources – These are the assets that Vodafone has carried out for the work activities and process related to the business mission, goals and objectives. Resources includes financial resources, physical assets, human resources, intangible resources and cultural resources and these resources are very helpful for Vodafone.

Strategic capability - The company is able to develop the strategic capability that can be analysed with the help of the value chain activities that are primary and support activity. Substantial strategic capability is developed by Vodafone regards to the operations to provide the telecommunication services at low cost with good quality for that company have to develop the technology to exploit the technological opportunity (Rivera-Camino, 2007). For handle the development of the human resources it has to develop the capabilities of the recruitment and selection for improving the technological innovation and motivation for more technological innovation. Organisational capabilities are the complex and coordinated network of Vodafone routine and processes that determine the transforms of the enterprise its input into output effectively and efficiently.

Core Competencies – These are the major value-creating skills and capabilities that are shared the multiple product lines or the multiple business. The sharing process inside the company is what distinguish the core competencies from distinctive capabilities. Vodafone has organisational processes and routines to get work done. These capabilities of the corporate are the fundamental building blocks for the development of the core competencies.

VRIO Analysis

This technique is used for the analysis which consider the several dimensions for the evaluation for the organisation as well as for the competitor.

V – Value. It is expensive on the resources and it is obtain in the market.
R – Rareness. Resources are limited in the Vodafone.
I – Imitability. There is difficulty to imitate the resources.
O – Organisation. These are those resources by the existing arrangements and can the organisation use that resources properly.

It is the way of evaluating the resources of Vodafone which are divided as follows:-

• Financial resources – These resources which are used by Vodafone in taking the decisions related to finance.
• Human resources – These resources are like men, machines for making the product.
• Material resources – These resources are like raw material etc. for making the products.
• Non Material resources- These resources like knowledge and information available to the Vodafone for making the products and plans.

Value Chain Analysis

It includes the two type of activities that is primary and support activities. Primary activities include the inbound logistics, operations, outbound logistics, marketing and sales, and the services which are provided by Vodafone. Support activities assist the primary activities which help the organization to achieve its competitive advantage. It includes procurement, technology development, human resource management, and firm infrastructure. By all these factors Vodafone achieves the leading position in the competitive market.

SWOT Analysis

To identify the internal strength and weakness of Vodafone and the external opportunities and threats which the environment needs to the company for that SWOT analysis is needed.

• Strength – Vodafone has introduced its brands into the existing brands of its controlled network and retains the value of the internet of that brand which is exist in the market in each country. Standardised customer retention management is a feature of Vodafone. The company is developing management to ensure the awareness of its consumer base and their preferences in order to help the efficient sale of the new product and services.
• Weakness – The capital expenditure of Vodafone is high. Exploring the new technology needs huge research, development and infrastructure cost. Enterprise is not flexible when it switches to alternative technologies if the underlying infrastructure will nor support it.
• Opportunities – Third-generation mobile phone is expected to be the major product of the telecommunication industry as it will allow the faster and high quality data which will facilitate the mobile internet at broadband speed (Atasu, Sarvary and Van Wassenhove, 2008).
• Threats – Mobile telecom company have to accept the decisions that may be made for political or social reasons without taking into account the effect on the company in the industry.

Strategic Choice:- Generic strategies are the core ideas and the Vodafone has implemented the different strategies. For doing the choice of the strategy Vodafone use the Ansoff matrix :-

Ansoff Matrix:- This matrix is divided into four parts that is Market penetration, product development, market development and diversification.

Market penetration is used when the products which are exist in the market to increase the market share of Vodafone. The current capability, resources are the factors which are used for growth oriented strategy.

Product development is necessary for the firm because consumers wants new and unique products so that value of the brand increases.
Market development means to expand into new market with the existing products. Vodafone have the capability and the resources to enter into the new market to increase the growth of firm and attain the success.

Diversification – It happens when both new products to be developed and new markets to be tapped.

Strategic Evaluation

A company can achieve sustainable growth to survive its business when it possess the competitive advantage against its competitors globally. Global telecommunication industry is fragmented industry. The company has implemented differentiation strategy but it requires the sustainable advantage in order to provide the values to its subscribers. A enterprise can gain competitive advantage by creating the more values than its competitors. The corporate has centralized supply chain to weaken the bargaining power of suppliers to achieve the operational efficiency. Vodafone has invested in the many companies for improving the technologies globally to create innovative and differentiated products and services (Thorpe and Morgan, 2007). To reduce the bargaining power of substitute products, the company has to diversify its products and service portfolio and offered a wide range of product and service include the value added services to meet the consumer needs.
Recommendations

Vodafone has expanded its global geographic footprint through the horizontal integration, joint venture and strategic alliance by capitalizing on its superior brand recognition. The company has thus implemented differentiation strategy and initiated one Vodafone program to achieve the cost effectiveness and efficiency. By gaining the economy of scale and globally to improve the bottom line performance (Kanagal, 2009). Vodafone has formulated and implemented those generic strategy in accordance with its vision & mission and external & internal environment. the company has to initiate in order to create a value-added services to meet the consumers needs. Vodafone has the largest geographic footprint in more than one country , the company has been confronted with the high competition in both developed and emerging markets.

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Conclusion

Vodafone has largest footprint in the different countries in all over the world, the company has been confronted with the competition in both developed and emerging market. European market is the largest market for Vodafone group but its revenue in the market are slightly decreasing. The market is expected to grow continuously and most multinational mobile operators have recently focused on the Indian market and the corporate facing high price competition in the market. Vodafone group has implemented differentiation strategy but the company has not launched the value-added services in both developed and emerging markets and by that they facing high price competition. While expanding geographic global footprint and diversify the products and services, the company needs to focus more resources on value-added services as the key differentiators in order to maintain the growth.

References

• Ataman, M. B., Van Heerde, H. J., & Mela, C. F. (2010). The long-term effect of marketing strategy on brand sales. Journal of Marketing Research.
• Atasu, A., Sarvary, M., & Van Wassenhove, L. N. (2008). Remanufacturing as a marketing strategy. Management of Science.
• Berthon, P. R and et.al. (2012). Marketing meets Web 2.0, social media, and creative consumers: Implications for international marketing strategy. Business horizons.
• Constantinides, E., & Fountain, S. J. (2008). Web 2.0: Conceptual foundations and marketing issues. Journal of direct, data and digital marketing practice.
• Dishman, P. L., & Calof, J. L. (2008). Competitive intelligence: a multiphasic precedent to marketing strategy. European Journal of Marketing.
• Doole, I., & Lowe, R. (2008). International marketing strategy: analysis, development and implementation. Cengage Learning EMEA.
• Douglas, S. P., & Craig, C. S. (2011). Convergence and divergence: Developing a semi-global marketing strategy. Journal of International Marketing.
• Hultman, M., Katsikeas, C. S., & Robson, M. J. (2011). Export promotion strategy and performance: the role of international experience. Journal of International Marketing.
• Jain, S. C., & Haley, G. T. (2009). Marketing planning and strategy. Cincinnati South-Western Publishing Company.
• Kanagal, N. (2009). Role of relationship marketing in competitive marketing strategy. Journal of Management and Marketing Research.
• Leppäniemi, M., & Karjaluoto, H. (2008). Mobile marketing: From marketing strategy to mobile marketing campaign implementation. International Journal of Mobile Marketing.

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