- Analysis of the external environment
- Analysis of the internal environment and capabilities of the organisation
- Analysis of the telecommunication industry
- Interpretation of strategic direction
Business strategy is defined as company's working plan which is formulated with an objective of achieving vision, development of employees, gaining competitive advantage and improving financial performance so as to sustain in market for longer period of time. For this, organisation requires an effective management who has attained more skills and capabilities to make an effective decision and strategic planning. This will help an organisation in achieving growth and success and compete with rivals in an effective and efficient manner. The present assignment report is based on Vodafone company which deals in telecommunication sector whose main motive is to provide an effective telecom services with better network so as to facilitate customers in connecting people. It has been operated in different regions such as Africa, Oceanic, Asia and Europe. The project covers the macro environment and its impact on the business operations of Vodafone. VRIO/VRIN model has been also discussed under this report along with the strategic capabilities which are required to be possessed by company. Competitiveness of telecommunication sector of UK by using Porter's five forces are also summarised under this report (Firnkorn and Müller, 2012).
P1: Impact and influence the macro-environment of Vodafone
Vodafone is operating its business operation on large scale thus they are much affected from the various factors arise due to business environment which are complex and contingent in nature. Macro-environment factors includes political, economical, social, technological etc. which forces the management of Vodafone to make changes in their decisions and plans on regular basis so a to deal with such factors in such an effective way that will help in achieving profitable outcomes. Therefore, the management of Vodafone are liable to analyse such factors through conducting PESTLE model which are described as below:
Environment analysis is an essential need of an organisation due to which the management can able to identify the factors and its impact which enable them to make further suitable actions and plans to deal with them in more effective and efficient way. PESTLE Analysis is considered as an effective tool which help company in identifying several factors which makes either or positive manner. Vodafone conducts its business at global level thus essential for them to analyse complexity of business environment with the help off PESTLE Analysis are defined as below:
Political factors: Such type of factors includes political conditions which largely affects the performance of Vodafone due to their business operated at global level. Every country has their own political system which are required to be understand by every organisation operated at such country and if management fails then huge amount of penalties and fines are imposed on company due to non-compliance (Klettner, Clarke and Boersma, 2014). Therefore, Vodafone can able to exist in UK market for longer period of time when the company successfully operated its business according to the rules and regulations imposed by UK government. Example, fluctuations in political conditions may affects the current taxation rate which directly makes impact on the prices of the services offered by Vodafone due to which it brings difficulties for company to maintain their customer strengths if political conditions are unfavourable to company.
Economical factors: It is related with with factors includes fluctuations in exchange rates, unemployment, inflation and other more which makes huge impact on the current performance of Vodafone. As Vodafone operated business in various countries therefore economy of such countries are very much affected their business operation either in negative or profitable way. Example, at present times, the economy of UK decreases slowly which makes huge impact on the income of people due to which they are showing less interest to adapt technology. It is not a good sign for Vodafone. Therefore, every organisation will focuses to expand business in developed countries.
Social factors: It is related with factors includes behaviour, interest, culture etc. which forces management in making changes in their pre-planned decision so as to fulfil needs and requirements. Mostly young people prefer to adopt advanced technology in the smartphones so as to exist with trends. Therefore their needs and preferences are required to be considered by Vodafone in order to retain them with company for longer period of time. For example, Mostly users are willing to buy fast network services at an affordable prices which directs telecommunication companies to reduce the prices of their telecom services (Smink, Hekkert and Negro, 2015).
Technological factors: Such factors includes adoption of advanced technology and equipments which enhances the capability of companies to provide quality products and services to their customers. Vodafone has operated its business operations in over 50 countries due to which the company required to adopt new and updated technology in its business for advancement. Due to such adoption, Vodafone is able to improve their network which can easily attract large number of customers.
Legal factors: Legislation and legal laws are changes according to the changes in government of country which makes huge impact on the business operation of Vodafone. Every organisation irrespective of the nature whether deals in retail, manufacturing or telecommunication industry, should required to comply with legal laws and regulation imposed by government on them. Therefore, Vodafone must required to carefully examine about the legal system of that country. For example, Various Acts such as health and safety act, equality act, 2010 etc. are required to be implemented within an organisation in order to retain experienced employees for longer period of time.
Environmental factors: An organisation can achieve long term growth and profit when they focused on adopting methods and techniques in order to protect environment from any harmful effects. For this, Vodafone has recognised as green brand in around 75% of developed markets. It helps in enhancing the brand image and good reputation in market which directly makes positive impact on their revenues as well (Azar, 2011).
Ans-off's growth's vector matrix:
Strategic positioning is a kind of strategy formulated by company in order to maintain their stable position in market through determining changing environment and its impacts on business operations. Positioning strategy includes identification of strengths and weaknesses of company which directed to improve their weak areas so as to achieving sustainability. It is essential for management to consider the needs and requirements of customers as well as rivals' strategies so as to make changes in their pre-planned decisions accordingly. The main motive of positioning strategy which allows company to identify their strong area where they can successfully compete with their competitors in better manner. Along with this, Ans-off Matrix is strategic planning which enforces managers, marketers and executives to devise the strategies in order to achieve growth and success in near future. Such matrix has developed by Igor Ans-off with a motive of assessing teams of management to concentrate on business development.
The Ans-off Matrix are given as below:
Market penetration: In this strategy, company mainly focuses on enhancing the present services or products in current market. It will help company in increasing their market share through selling more products to manufact