Considering the severe rise of competition in UK Telecommunication Sector, it has become very crucial for organisations such as Vodafone to sustain their market and at the same time expand their operations at national and international level.
- Identifying the impact and influence of external environment factors on Vodafone.
- Determining the strategic capabilities that lies with Vodafone along with internal environment assessment.
- Analysis of UK telecommunication sector through Porter’s five forces model.
- Interpretation of strategic direction for Vodafone.
Business strategy can be considered as a plan that helps manager of different companies in gaining competitive advantages at marketplace of United Kingdom. On the other hand, it has also been analysed that if products and services are not being made according to the perception of customers then it is may be possible that firm can easily grow at marketplace in short period of time (Amran and et. al., 2016). Firm which has been taken under this report i.e. Vodafone which is having around 106400 employees that are delivering services to customers. SWOT and PESTEL analysis are being done of this company which will aid in understanding about both internal and external environments. Along with this, Porters five forces model is going to be enclosed under this assignment. Assessment will also put light on different theories along with models which will directly aid in developing strategies which will help business organisation in creating favourable conditions for the company.
P1 Macro environment's impact over a company
Business strategy is defined as a plan which is formulated by company so that company can use them for obtaining business objectives. Therefore, business strategy is considered as a long term plan that is made for attaining its vision, objectives and compete with rival companies for gaining better position at market area. Most of the companies use different kinds of business models for getting effective outcomes. These can be classified into four parts i.e. growth, product differentiation, price-skimming, acquisition strategy.
It has been found that, operations of company can be mostly affected because of internal (micro) and external (macro) environment. Therefore, it is required for company to look into different feature and then to see different initiatives as well. With the help of this, firms can obtain a good position in the marketplace of United Kingdom (Annabi and McGann, 2013). It is being found that Vodafone which comes in UK's one of the biggest business organisation is performing at an international level. In order to understand about the facts and figures that are related to external environment, PESTLE analysis has been done underneath:
Political: It is being found that the government's parties which rules the entire country to improve health of all the citizens of United Kingdom. This made them to take initiatives related to radioactive rays that has impacted on business organisations that are doing business at international level. Because of enhancement in radioactive rays every year, government of United Kingdom have structured various policies that have impacted on organisations that are doing business in telecommunication sector. These rays can put major impact on health of a person and because of this, government of this country has made these rules like towers are going to be placed away from people where they live and many more. For example: A vast impact on business operations in United Kingdom can be seen in relation with Telecommunication after exit of UK from rest of European Union. New policies were made which are to be followed by telecom companies and in terms of Vodafone it can work as an opportunity or threat. Regulatory bodies of United Kingdom are taking care of telecom companies and in respect to this they are providing appropriate funds in order to establish proper broadband services in urban and rural areas as well (Barberá and et. al., 2012).
Impact: Brexit had a great effect on business operations whether it is small, medium or large. Although the deal has not done yet but telecom sector will be affected with any kind of Brexit deal made by the regulatory bodies of United Kingdom. For example: Tariff plans which were lower at cost can rise after the process of Brexit so that telecommunication company can gain some benefits.
Economic: This is one of those factors which can majorly put impact on business of an organisation. On the other hand, it has been examined that in the year of 2010, when prices of pounds got decrease, at the same time Vodafone company reduced prices of services immediately because it was affecting their profit ratios. For example: if companies will not have adequate amount of workers manufacturing process will be decrease and gradually sales and profitability will get minimised. Later on Vodafone can hire workers, as a result a growth can be seen in business operations as work will be completed in speculated time frame.
Impact: In terms of Vodafone Economic factor will have a positive impact on business as firm will get to work with new and skilled employees who will play their part in providing maximum benefits to company in a speculated period of time frame (Chang and Graham, 2012). Tariffs are considered as taxes that are imposed by government, this can be one of the barriers of trade as if tax will be high than products price can be higher or vice versa. Trade barriers consist of different factors or can be called as subsidy, protection, embargo etc., therefore, it is an important element and companies has to think as this can provide benefits or create some issues.
Social-Cultural: Vodafone company has collaborated with Cisco in order to provide benefits to its customers using cloud based voice along with video and communication tools. Therefore, it helped company in delivering services to customers as per their needs and requirements. Now a day's people are becoming techno-friendly and using technologies in their daily life therefore, companies are also upgrading its services for example: shifting from 3rd to 4th Generation. This is enabling Vodafone company in providing better services and facilities to its customers. For example: Now a day's, instead of using internet, people are moving towards the use of application and companies are also focussing more on this. The main reason behind this is because these are easy to access and information can be gained in short period of time. Many companies have their own application which can be downloaded from play-store or IOS and further, it can be used for different purposes. Therefore, an effect on socio-cultural difference can be seen in the market area.
Technological: Technology in today's world is carrying a rapid changing nature. Therefore, it is required for business firms like Vodafone company to keep on adopting latest technology in order to serve customers with the best. Through this, it can be said that company can deliver products and services as per their needs and requirement. On the other hand, it has also been found that there are many benefits that can be gained if Vodafone company is using updated tools of technology like competitive advantages can be gained and many more (Elhamma and Zhang, 2013). With the change in course of time, technology has come up as a revolution and in relation with Vodafone, now they are making attractive web designing so as to grab attention of maximum number of customers. New and innovative designs of their web portal are making consumer's web surfing more easy.
Environmental: Problems that are related to telecommunication is that it produces radioactive rays which are harmful for the humans, creature and environmental as well. Therefore, Vodafone has started focusing on this problem and they are making towers which and radiate rays that are less harmful. Hence, it is assisting company in improving its brand image in front of its customers. Vodafone is delivering excellent services to its customers which is helping them in enhancing their business operations. Other than this, firm is using latest technologies and tools in order to get effective outcomes which can be given to customers. In context with regulatory bodies, they should make strict action plan, rules and regulations which are made by concerning environmental factors.
Legal: Vodafone is one of the leading company in United Kingdom and their business is expanded all over the world. Due to which the had to follow certain norms and legal laws of different nations in order to improve its business effectively. Mainly these laws include legal sections, compensation act, employment act, etc., For example: Online privacy law, under which retention of data is being enacted in which telecommunication can retain data of up to twelve months. Therefore, it is prime responsibility of Vodafone company to go through with laws properly so that it can be followed and further no problems can harm business operations. Some of the laws and its impact on Vodafone are explained below for having better understanding:
- Equality Act: Under this act no one as right of discriminating people on the basis of age, gender, caste, colour etc., In relation with Vodafone, they are hiring candidates purely on the basis of talents and they are not doing any kind of discrimination and this is the reason why Vodafone company is in better position for a longer period of time. In addition to this, firm is now able to provide services and facilities as per clients’ satisfaction.
- Health and safety Act: This laws formulated by regulatory bodies of United Kingdom in the year 1974 and covers occupational health and safety. Vodafone, is providing benefits to its employees like company is giving sick leaves if employees are not healthy along with this, they give compensation as well for their leaves.
There is a must that legal frameworks are formulated in a better manner because on the basis of this, company make its strategies and plan of action which can be further followed so as to get maximum benefits in return. Therefore, it gradually increases the sales and profitability in a speculated time frame (Giannoulis, Petit and Zdravkovic, 2011).
Points which are mentioned above are related to macro environment and has its impact on overall performance of company. Therefore, while making any kind of strategies, it is necessary for an organisation to look out for all these aspects because if they are neglected then the company can face major issues and activities that can get hampered. In addition to this, it has performance of an individual as well.
It is not necessary that whatever outcomes the company is gaining from external market is going to be positive. In order to make changes as per external market, firm requires a large amount of money so as to get appropriate results which will further assist company in taking effective decisions. Therefore, the entire task should be done by experts and stakeholders' analysis has been given below for better understanding.
This is considered as an important technique through which company identify the needs and wants of stakeholders. It is a systematic process which is related to power and interest of stakeholders. Therefore, it must be considering as a first step that company should perform and it consist of four key benefits which are explained below for better understanding:
Helps in projects into shape: With the help of stakeholders' analysis company can know about the projects at early stage whether it will be a success or no benefits will be gained from this. Therefore, stakeholders support in making appropriate decisions and enhancing quality of projects (Jocovic and et. al., 2014). In terms of Vodafone, stakeholders are assisting them in making appropriate decision like where company can establish their networks for increasing its sales and profitability.
Acquiring resources: If company are provided proper guidance from stakeholders than fir can gain maximum benefits in terms of winning more and more resources for their organisation. For example: recruitment of new employees, proper use of money and time so as to get better outcomes. Therefore, all these factors will assist Vodafone company in making their activities and projects more successful.
In order to build understanding: With the help of stakeholders and maintaining a better relation with them, company can grasp beneficial points so that benefits of project can be analysed.
Getting competitive benefits: If company understands the behaviour of Stakeholders than firm can easily predict their reactions for activities and projects as it proceeds and develops. Therefore. In context with British Communication they are making such plans which are acceptable and supported by stakeholders (Leonidou and et. al., 2017).