Business strategy is defined as a plan which is created by manger in an organisation for achieving the set goals and objectives. In other term, it can also refer to as long term planning. The objective of business strategy is to set overall objectives for company and create a plan for achieving the target. Formulation of strategy, assist in smooth functioning of business. Strategic planning has great importance in services sector such telecommunication industry. An effective strategic plans supports n organization in delivering quality services to customers. Strategic planning also helps firm in gaining competitive advantage. It helps an enterprise in providing inappropriate response to changes in business environment.
The report will include critical analysis of macro environment. It will have focus on determining the changes in external factors influence management decisions. There will various models such as PESTLE and SWOT analysis will be used for addressing the changes which might takes place internally or externally.
Analysing the way macro environment and the way it determines Vodafone strategic management decisions.
Vodafone is a British multinational company which has its headquarter in London. Business entity has achieved fourth position in context of number of customers. An organisation has its own networks in more than 25 countries. Vodafone company provides both telecommunication as well as It related services in 150 countries.
Mission, Vision and Objectives of Vodafone company.
Missions: Vodafone mission is to deliver high value to its customers. It also intends to provide high return to shareholders. The mission of an organisation is to enhance lives of customers by providing them unique power of mobile communication services. Business entity mission is to gain customer loyalty.
Vision: The vision of an enterprise is to achieve leadership position in telecommunication industry.
Objectives: primary objective of Vodafone is to earn high profit. Other purpose of an enterprise is to expand business operations globally.
Definition of strategy
Strategy can be defined as plan of action which is designed to achieve long term business goals or objectives. It can also refer to as direction set for an organisation to accomplish desired state in the future. Manager in Critically evaluating the organisation internal environment and its capabilities (Grant and et.al., 2014). Manager in Vodafone organization should formulate an effective strategy as this will assist them in dealing with uncertain situations.
Role of strategy to achieve business objectives:
Strategies plays crucial role in driving firm towards achievement of desired objectives. An effective strategy supports business entity in eliminating the barriers which might occur in accomplishing desired targets. It helps in identifying the activities which are required to be executed in order to achieve desired targets. Planning of strategy also assist management in determining the amount of resources which will be required for executing various activities. It also helps in ensuring proper utilisation of resources.
The characteristics of strategic decizions , directions of your chosen company.
The important characteristics is that all the decisions are made by the manager considering the market as well as changes in external factors in business environment. Strategic decisions taken by the management has assisted an organisation in improving performance. Companies strategic objectives are clean, an organisation intends to cater the needs of customers. Strategic approach of company is completed based on the to issues like privacy and content builds trust and grows our customer base in mature markets. In addition to this, This strategy is based on our assessment of the key CR-related opportunities and risks for business.
Different strategic planning techniques
Strategic planning can be defined as a procedure of establishing mission, objectives and then formulating as well as implementing strategies to achieve desired targets. Strategic planning techniques supports management in making suitable business decisions. The different types of strategic planning tools and techniques are:
Market research: It is defined as procedure of accumulating information about specific market such as demands of customers, presence of competitors etc. Manager in Vodafone company should execute research at regular interval of time, as this strategy will assist business entity in exploring the growth opportunities. It will also help organisation in providing high level of satisfaction tri customer (Heyden Kavadis and Neuman, 2017). Utilisation of technique will assist manager in an organisation in taking decisions related to product development.
Cost benefit analysis: it is considered to be as decision making tool which is used by manager in an enterprise for assessing the costs as well as benefits associated with taking specific actions. The purpose of this analysis is to support management in selecting an appropriate course of action. It is required by manager in Vodafone company to use this tool for assessing the cost or benefit associated with selecting particular project for investment’s this technique will support business entity in gaining high rate of return on investment.
- PESTLE analysis: It is considered to be as effective techniques which is used by an organisation for analysing the way different factor in internal and external environment influence strategic plan. Manager in Vodafone should conduct PESTLE analysis, as this activity will assist company in making an appropriate plan for dealing with changes.
- Political factors: It includes rules and regulation, political situation in the country etc. Changes in political factors have direct effect on the decision made by top level management in a company. For instance, Brexit has negative effect on telecom industry. Political parties have restricted the exports which has led to decline in sales and profitability of companies operating in telecom sector. This factor has great effect on the business strategy and expansion plan. Analysis of Changes in political factor has encouraged manager in Vodafone to identify new ways of increasing sales as well as profitability in domestic market.
- Economic factors: Changes in the economic factors such as exchange rate, increase in tax rate, inflation in process of products or services have direct influence on the management decisions. It is required by manager in Vodafone to keep update themselves with such types of changes in economic components, as this will assist management in making an appropriate decision. Analysis of Changes in this variables supports management in determining the new ways through which new sources of revenue can be generated or profitability can be increased.
- Social factors: It includes changes in trends, taste and preference of customers in the market. Manger in Vodafone should require to have knowledge about such types of changes, as this strategy will support management in making an appropriate decision related to product development. Social changes have direct as well as significant influence on product planning and also on other operational decisions as well as activities. Analysis of changes in this factor will support Vodafone in identifying the target market as well as customer group (Dayan, Heisi and Matos, 2017).
- Technological factors: This is considered to be as supporting variable which assist an organisation in improving quality of products and enables business entity to deliver additional services to customers. It is required by manager in Vodafone company to take decision related to embraced smartphone app development, as this strategy will help firm in gaining competitive advantage in the market.
- Legal factors: Changes in laws and regulations has direct as well as significant effect on human resource management decisions and practices. Changes in employment law helps management in determining the salaries and wages of workers.
- Environmental factors: It include climate change, increase in competition in an industry etc. This factors have direct effect on business plan and strategies adopted by management for dealing with intense competition. It also supports management in identifying the level of competition.
Business Growth options:
Ansoff’s growth vector matrix: It is considered to be as an effective strategy which can be used by manager in Vodafone company for exploring growth opportunities. Ansoff’s growth vector matrix helps management in determining the marketing strategy which an enterprise must use to foster growth. It profits firm a road map which will help business entity in fostering growth (Leonidou and et.al., 2017). There are mainly four strategies which can be used by Vodafone company these are:
Market penetration: This strategy is adopted by an organisation for promoting existing goods or services in new way. Market penetration strategy involves low risk. This strategy has been suggested to Vodafone as it will help business entity in increasing market share. It will also help an organisation in improving promotional activities.
Market development: By utilising this strategy, Vodafone can enter into new marking with its existing products or services. It is required by manager in Vodafone to align an organisation core competency with products rather than the markets.
Product development: This strategy can be used by Vodafone for launching new products or services in existing market. It is considered to be as an effective strategy for attracting new customers.
Diversification: Vodafone can use this strategy for launching innovative product or services in new market. This strategy involves high risk.
Show results for example: impact, market share, profitability, what do customers value most, market share of the company in the market industry.
Vodafone has capture approx., 21 percent of market share. Change in the legislations have great effect on the business of Vodafone. In addition to this , environmental variables have great influence on the services provided by Vodafone. Business entity in Indian market has generated profit of approx. 9805 crorer During the financial year 2017-2018. In addition to this,Vodafone India with 211 million and Idea Cellular with 196.2 million users will become the largest telecom operator when they officially combine their operations in 2018. Employees are dedicated towards their work and they are provided training related to the way they should behave with clients.
Critically evaluating the organisation internal environment and its capabilities.
1. VRIN analysis: It is considered to be as an effective tool which can be used for analysing the internal capabilities of an organisation. Internal capabilities are required for dealing with competitions and providing an appropriate response to changes in external en