This report is entitled to making of strategic management plan by the strategic manager of Vodafone.
- Analysis of Macro factors and their impact on Vodafone.
- Analysis of internal capabilities holds by Vodafone.
- Evaluation of industry analysis using porter five force model for Vodafone.
- Demonstration of strategic direction received by Vodafone.
Business strategy is identify as an important requirement of an enterprise with the support of which entire activities and functions of company are performed effectively. In the organisation strategy is depict as a plan of action which is made by administration of a firm with a motto to accomplish their set objectives and goals within pre-determined time. In simple word, it is look-alike a roadmap which render guidance and direction to the entire workforce to perform accurately and gain profitable outputs. It is also identified as a science and art of marshalling and planning resources for their effective use (Ackermann and Audretsch, 2013). In this assignment, chosen enterprise is Vodafone which deals in telecommunication sector and has operates and run their business in Africa, Europe, United States and Middle East is undertaken for the motive of preparing and designing this assignment. This report is based on Macro-environment and its impacts on business. Organisational capabilities and internal environment of the firm is also determined in this study. Porter's five forces analysis and Bowman's Strategic Clock are also shown in this assignment. Main purpose of this assignment is to identify impacts of internal and external factor of environment on business operations and functions.
P1 Impact and Influence of Macro Environment on Vodafone
The business operations and activities of each and every enterprise whether medium, large or small are highly affected by macro-environment which business administration to implement a better strategies in order to meet with these factors effectively. This factor made with social, political, legal, technological, environmental and economical which assist a company or reduce negative effects to them (Alsoboa and Aldehayyat, 2013). In this one of the main factor is PESTLE Analysis which extremely influenced on Vodafone operations and functions. These are determined as below:
PESTLE Analysis: It is important factor which highly effects on company operations and function in positive as well as negative way also. Due to this, administration department of the Vodafone take an effective plans and action to deal with them effectively and efficiently. Beside this, firm has operated and established its business operations approximately 30 nations and attain success and development on regular basis. Thus, they highly influenced from macro-environment which determined as below:
Political Factor: Due to political changes, business operations and activities of Vodafone is highly effected. For example: in the United Kingdom, new government of the country may maximise tax rate on the service of telecom which rises price of products as well as through this business entity identify different trouble in attracting large number of clients. Thence, firm upgrade to render better and effective telecommunication services in UK where the changes in political situation are more stable. In today's environment, the conflict or misunderstanding yield place in Europe, it make more effects on decision and operations of organisation.
Economic factors: This factor mainly linked with the economic stability of UK which creates more effects on operations and activities of Vodafone. There are different nations which creates the maximum variation the business get to enlarge their business activities in other and unique place (Bentley, Omer and Sharp, 2013). Economic growth and development of the country will maximise the income level of people in which they show lots of willingness and interest in order to implement advanced technology. Thus, it will support firm in generating maximum amount of the capital for long duration. Recently, in the United Kingdom, Economic crisis bring unfavourable effects on business functions and operations of enterprise.
Social factor: It is another factor that fundamentally related with beliefs and culture of people who are living in same country in which company is running. It may influenced on the company success and growth thus requirement to create modifications in their strategies as well as policies also, it pertain to the culture of an individual. As Vodafone, it is a European and telecommunication organisation which needed to modify their policies as per the element of social factor in which the enterprise has launched.
Technological factors: It is one of the main and essential factor which is followed by all organisation in order to improve their growth and success in limited time period. In this Vodafone always try to perform and activity according to trends which obtain in technological and communication area. Through maxima rivalry in telecom sector, it is more valuable for the enterprise to compete their challengers in an effective and quick way.
Legal factors: Company is operates and launch their business operations at global level through which they obtain high competitions from their competitors (Cadle, Paul and Turner, 2010). Hence, it is essential for the telecom sector to consider entire legislation and regulations which is formed by the legal authority of the country. Company indulge in different legal issues or problems in which Vodafone face different lawful penalties. Beside this, enterprise also faces problems about not paying accurate amount of salary to their workforce as compare to other challengers. Through this, employee turnover ratio is maximised and they leaves this firm to another. Hence, it is necessary for the firm to apply entire legal standard and regulation to maintain their strong position in market and increase loyalty of customers and employees for long duration.
Environmental factor: Through globalisation, a person become much ethical. As each and every clients hoped-for from their best-loved brand to take involvement in the development and welfare of society. They neediness from their effective brand and products to be socially accountable and participate lots in growth of social group (Curwen, 2011). Thence, it must needed for Vodafone to keep healthy and friendly working atmospheres so as to force knowledgeable and talented workers and accomplish set goals and targets within predetermined period.
SWOT Analysis of the Vodafone: It is one of the effective and essential factor for the all organisation to recognise their internal such as Strengths, weakness, and external like threats and opportunities. All these are highly effects on business performance and profitability. SWOT analysis of the Vodafone is explained as below:
Global presence in across the world: Vodafone has enlarged its business operations and activities in various areas of the glove like Middle East, Europe, Africa, United States and Asia Pacific through the business subsidiary undertaking's as well as investments as of FY2010. Thus it identify Vodafone is international and best leading mobile telecommunication industry across the world.
Prominent market position: At the year ending 2009, company has a large market share and position in the European location with UK, Romania Germany Spain and Italy at 23.4, 33.1,32,31.2 and 33.5 percentages (D'Aveni, Dagnino and Smith, 2010). Whereas, the share of the company in Eastern European nation of Turkey is at 24.5%. Thus, it is essential for the company to maintain strong base of the international customers.
Losing market share in USA: In this nation, company could have demanded and need the premium in order to retain itself afloat. All the same, it is accelerated losing market share in such country to AT&T, and Verizon wireless, these are performing or acting far above business if they includes the United State market only.
Lack of performance in Europe: Through economic conditions in Europe as well as due to Brexit, performance of the company in its market is not good and it has not created more amount of capital from its marketplace. In this, they observe at revenues, 40% is entering from India and not from UK or US.
Competitions: It is identify as main threats for the company which highly effects on business performance and profitability in an effective and efficient manner. In the marketplace, there are main competitions or substance from AT&T, and Wireless. For example: India has Reliance Jio and Airtel and China has its China Mobile (Dobbs, 2014). All these are extremely effects on company and its performance at global or international level.
Mobile number portability: In this main threat to company is MNP for example: Competitors of the Vodafone introduce a cheap plan or strategic or someone such as Reliance Jio that provides mobile phone and free internet, then customer don't prefer another before leaving brands.
Enhancing the network coverage: In the Vodafone, improving network coverage is identify main issues which customer of such organisation sometimes have from the brand. In many time, company has poor network coverage which is highly effects on business operations. In order to overcome this, company operates different number of towers. Thus, it is a best opportunity for the company to maximise acquisitions of the customers as well as maintain strong relation with actual clients of the enterprise.
Emerging markets: In developing country, not only rural markets, other emerging places such as Africa, it is great and better potential locations for the company. These emerging and new places have maximising disposable communication and income get essential ones a network is developing or growing (Firnkorn and Müller, 2012). Thus, there are different duties of telecommunication business can play and act in an emerging place.
P2 The internal environment and organisation capabilities
As Vodafone launch and operates their business operations or activities at global level through which they face difficulties from international as well as national challengers. It is important requirement to create a better and effective plans nor strategy as per serving quality services and products to the clients so as to increase the satisfaction level of customer in minimum time period.
Strategic capability: It is part of business ability in order to gain maximum amount of capital and competitive edge within an organisation. It refers to the business position at marketplace so in order to maintain this company should try to provide quality and better services to the customers at affordable price. This undertake the plans and strategy with the support of which operation and activities of enterprise can be executed effectively and efficiently via applying addressable resources in successful and optimum manner. This will support organisation in keeping their present better in marketplace (Grover and Kohli, 2013). Thus, strategic capability of the Vodafone is a better and effective for an enterprise in order to make their strong position as compare to their challengers. With support of acquiring help from neutrals and many other curious parties, the Vodafone can capable to implement an effective strategies and plans which assist them to maximise their sales and revenues easily. For instance: in order to adopt new technology in firm they require to obtain accurate amount of money therefore they necessarily to attract financial institution and investors to render accurate fund to them at specified interest rate.
In this needs of the employees is to gain high motivation from the managers then they work properly. It is the important part for business to maximise their revenues and sales in certain time period. In this financial bodies and government authorities are play vital role and responsibility in accomplishing success and growth of Vodafone in long period of time. In order to keep this Vodafone apply VRIO analysis which are determined as below:
VRIO Analysis: It is identify as an analytical and effective technique with the support of which organisation can capable to determine their abilities and make appropriate decision about utilising accurate resources in an effective and efficient manner (Johnson, 2016). It is an effective aspects which is used by the business manager to do their all activities in appropriate manner. This model includes few parts which are shown as below:
Valuable: Under this, business resources which are valuable and useful for the organisation thus require to be assign them in careful way so that favourable effects will be received in an easy manner. Maximum utilisation of available resources change business to decrease telecom service cost, it is offered by the Vodafone through which business attract different number of clients. Lack of resources is highly effects on the company while gaining competitive advantages effectively (Klettner, Clarke and Boersma, 2014). Therefore, it is important for the enterprise to analysis the resources value as modify in business environment.
Rare: It is identify that Vodafone's has accurate number of resources which is important for them to achieve competitive edge in an effective and efficient way. As Vodafone's, it is a world's leading and telecommunication industry across the globe which has operates their business operation and activities in different nations. Therefore, business has accomplished more resources by which they are able to enlarge their operations effectively.
Costly to imitate: It is another important part of such model in which business adopt an accurate technique's and tools. These are not easy to imitate maximise the opportunities of attaining competitive edge (Kernbach, Eppler and Bresciani, 2015). In cause of Vodafone's, there are different number of aspects and resources implemented in the past times. Therefore, it is difficult for another business to copy it for their own advantages and benefits.
Organised to capture value: It is important and necessary for an enterprise in order to realise the significance of resources which are available in the organisation. If a firm is fails in order to doing this then it show as unfavourable effects to Vodafone's. For this, it is essential for the enterprise to select a better process, policies, approaches and needed to be integrated effectively and efficiently.
Therefore both business such as Vodafone's and EE has strong presence across the world. But as compared to Vodafone's, EE limited products and services are minimum which show its capability and position at marketplace (Li, Zhou and Si, 2010). It is important for the enterprise to gain competitive edge and benefits at marketplace. Further, it support the business to increase their sales and revenues in limited time period. Therefore, company utilise better and optimum resources which assist them to gain strong and long-lasting position at marketplace.