Introduction to Strategtic Management

Strategic management is considered as one of the most important aspects business management that has significant impact on success and growth of business entity. In the process of strategic management, every organization develops wide range of strategic plans associated with business expansion, marketing, joint ventures, mergers etc. as per the distinct business needs. Apart from that it is analysed that the success of an organization is greatly depending on its strategic planning process that has direct effect on efficiency and productive of management.

This report is going to discuss various strategic issues which are faced by an organization in strategic management process. The present assessment is carried out with reference to strategic planning process of Vodafone Group Plc. It is a British multinational company which is offering wide range range of tell-communication services in various overseas issues. The essay is going analysis various theoretical models associated with strategic management process that assists management while taking various strategic management related issues.

Industry overview

Strategic management is considered as one of the most important aspects business management that has significant impact on success and growth of business entity. In the process of strategic management, every organization develops wide range of strategic plans associated with business expansion, marketing, joint ventures, mergers etc. as per the distinct business needs. Apart from that it is analysed that the success of an organization is greatly depending on its strategic planning process that has direct effect on efficiency and productive of management.

This report is going to discuss various strategic issues which are faced by an organization in strategic management process. The present assessment is carried out with reference to strategic planning process of Vodafone Group Plc. It is a British multinational company which is offering wide range range of tell-communication services in various overseas issues. The essay is going analysis various theoretical models associated with strategic management process that assists management while taking various strategic management related issues. The UK’s telecom market is identified as one of the largest service sector industry in Europe which is characterised by fierce competition in the mobile and broadband sectors. In order to increase market share, various companies formulates different innovative services which has pioneered business models for distributing digital content. As a result, mobile and broadband penetration is comfortably ahead of the European average. Consumer prices across the board have fallen steadily due to increase in competition level. On the other hand, network capabilities have been greatly expanded with the help of recent investments by British Telecom and Virgin Media in Next Generation Networks. Furthermore, there is significant downfall addressed in revenue of companies associated with UK's telecommunication sector.

Environmental analysis of UK telecommunication sector

Consumer and brand switching: The emergence of globalization has led significant impact on success and growth of various companies during overseas business operations. It has enhanced importance of strategic management process.In this process, companies like Vodafone is facing several issues during the strategic planning process. Therefore, consumers are addressed as a key market player on telecommunication sector of UK. In order to manage distinct needs of consumers, companies are applying different tools and strategies to attract consumers towards their products. Telecommunication industry is one of the industries which possess high rates of brand switching. This is because intense competition in telecommunication industry so as customers of mobile service provider companies often switch their service providers brands which provide extra benefits to them In 2015 the market value of telecommunication sectors will reach at £40.7 billion.

Growth in internet based communication tools

Increment in number of smartphone users has created significant impact on growth of mobile telecommunication sector. It includes communication through internet tools such as Skype, What's up, Hike etc. have significantly influenced the demand high speed communication. It influences companies like Vodafone for developing of new business strategies and services along with facilitation of high speed network as per the current market trends.

Introduction of new technologies

As per the current market trends, the growth in number of smartphone users has increased the demand of high speed telecommunication service. This thing influences several companies for development and promotion of next generation network system system such as 4G services. Therefore, various companies in UK makes efforts in order to expand high speed network. In addition to that companies are also focusing low cost telecommunication of services.

Public legislation

The public authority of UK has developed various legislations in order to control telecommunication sector. In this regard, Communication Act, 2003 has played important role for development and growth of telecommunication sector as well as safety of service users. As per current business strategies of Vodafone, this act helps organization for introduction of high speed 4G network. The term 4G refers to the fourth generation of mobile communications standards. Therefore, independent regulator and competition authority for the UK communications industries have auctioned and awarded radio spectrum licences for 4G mobile communications in the 800 MHz and 2.6 GHz bands. In addition to that public authority has determined various new legislation for safety of consumer's rights.

Fluctuations in domestic and international capital market

In the strategic management process, an organisation is also facing issues related to capital markets and institutional relationship. During overseas business expansion, the management of Vodafone determines various policies for managing the interaction of finance and strategy. In this process, business entity faces several issues in formulation and conduct of strategy due to fluctuations occurred in domestic as well as international capital market. In addition to that differences in institutional relationships among various international trading partners of Vodafone influences strategic planning such as merger, acquisitions as per the different corporate goals.

Drivers and Barriers of Internationalisation for Telecommunication sector

Yip's Frameworks

There are different theoretical approaches applied in strategic planning process. In this context, Yip' framework is addressed as a most important model to determine various drivers associated with the strategic management process. This model determines 4 categories of drivers that influence an organization during overseas expansion like Vodafone. These drivers are acting as motivator for the management of Vodafone for establishment of international trade relationship with other companies. These drivers include market globalization drivers, cost globalization drivers and government globalization drivers.

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Market Globalization drivers

The market drivers are mainly associated with social and demographic factors which are influencing overseas expansion strategy of Vodafone. In the context of Vodafone, management considers change in income and lifestyle of people that influences their decision regarding selection of different kinds of products and services (Hitt, Ireland and Hoskisson, 2012). For example: In India, the number of internet and smartphone users is significantly increased within last decade that provides an opportunities to Vodafone for offering wide range of unique and creative services as per the distinct needs of consumers. Change in social and demographic factors provide new opportunities to Vodafone for managing business as per the current market trends. It will increases profitability and market share capabilities of firm.

Government Globalization drivers

As per the Yip's framework, government is also considered as a most important driver that plays important role in strategic management process and management decision's associated with overseas business expansion. In emerging countries like India and China, the public authorities offer wide range of support in the form of tax benefits, easy administrative process, low cost funding etc. that motivates an organization for developing of appropriate plans and strategies to exploit some new business opportunities with the help of government support. By assessing support with public authorities of particular and establishing partnership with government such as expansion of tell-communication network in particular nation, the management of Vodafone is able to increase the profitability and can develop strong market position within highly competitive business environment.

Competitive drivers

Competitive drivers are also playing important role in strategic formulation process within an organisation. In this process, manager considers several factors based on economic growth, competition level, financial stability etc. within particular while taking any kind of strategic decision for business expansion, merger and joint ventures. By considering the economic growth of new marketplace, managers of Vodafone are able to predict future business opportunities which are influenced by economic growth of nation. Furthermore, it plays important role on cost of finance that influences overall efficiency of an organization

Cost drivers

As per the Yip's framework, the cost driver is termed as a most important element that encourages an organization for establishing relationship with other companies to reduce cost of different services and products with the help of latest technology. In the context of tell-communication sector, the administration of Vodafone always tires to increase quality of services within less cost that would significant impact over the profitability of business entity. Therefore, organization makes efforts to assess new technologies with establishing relationship with various other firm to assess high tech equipment associated with tell-communication network.

CAGE model

The cultural, administrative, geographic, and economic (CAGE) distance framework helps managers identify and assess the impact of distance on various industries. This approach plays significant role in strategic planning process within an organisation. This is because this model assists management in evaluation, administrative, geographic along with economic variation while expanding business in new market and developing of trade relationship with various companies working in different parts of the world. This approach has been found very effective for handling of various activities associated with strategic management process as per the corporate goals.

Vodafone is operating in various nations so as assessment of cultural variation is essential for success of business entity. Culture is referred to as the software of the mind that has invisible but indelible influence on people's values and behaviors. This understanding helps manager for developing of distinct strategies related to business structure, new product development, selection of marketing tools etc . It provides significant assistance for avoidance of uncertainties. On the other hand, administrative distance determines the historical and present political and legal associations between trading partners. In addition to that trade practices between countries are significantly affected by laws and regulations associated with national or international level. Therefore, the Vodafone considers all these strategic compliance in formulation of business policies.

This approach has significant impact on competitive position of business entity.With the reference to CAGE framework, the management of Vodafone makes efforts to assess variations among trading partners based on size of the country, climates, and nature of transportation as well as information networks. All these elements have direct impact on organisation's productive within new emerging markets. In addition to that the management of Vodafone also carries out detail assessment of economic difference related to income, the distribution of wealth, and the relative purchasing power of segments of a geographic market. The assessment supports business entity while handling different activities associated with pricing of services, selection of marketing tools and quality of services.

Evaluation of the most important aspects influence development of telecommunication sector and Vodafone.As per the current market structure, it is clear that an organisation is facing several issues associated. In the support of this, wide range of academic model can be applied..

Customer loyalty..

In telecommunication sector, companies are facing tough competition. In addition to that brand switching cost is very low. Therefore, companies in UK make efforts to assess needs and desires of consumers to manage market competition. In this regard, companies are applying different strategic business model that play important role in order pay appropriate attention on the basic components of management. Therefore, management tires to formulate appropriate and unique strategies to influence goodwill and market position. It influences loyalty of consumers. For example: Vodafone has applied this approach in development of new services and selection of best marketing tools through company could attract new consumers and retain old consumers for long duration.

Development of new innovation services

in this context, departmental management model helps manager for paying extra attention on different situations in which management is able to focus on different tactical elements of strategic plan for meeting specific goals of different department. For example, the management of Vodafone is looking to improve quality of internet services with the help of new 3G or 4G mobile network as per the market conditions of target market. In this, department will focus on identification of customer needs and then analyses the needs with reference to increase in smart phone users and increase in income of people.

Managing competition through overseas business expansion

The growth in competition among companies working telecommunication sector has influenced companies to expand business in new market. In this regards, Vodafone of Uk has adopted the joint venture model which is also beneficial for Vodafone and provides better opportunities to business with reference to current market trends. This approach plays important role in the strategic decisions of Vodafone related to business expansion in new markets . For example, the partnership of Vodafone and Conexus Mobile Alliance plays important role to increase the presence of Vodafone Asia and provides Conexus with greater access to Vodafone’s global footprint. In addition to that Vodafone and MTS have agreed to extend their strategic partner market agreement and expand the scope of company in the market of Ukraine by signifying a deeper relationship between the two companies in the country. With a new non-equity partnership, the companies will roll out 3G and develop wide range of in the Ukraine market using the the Vodafone brand in Ukraine.

Technology innovation

The rate of technological modification is very high in the telecommunication segment. In this continuously changing business environment, company like Telecom Corporation and Vodafone make efforts in order to offer such products and services that are exceptional and innovative. Therefore, every organization has to ensure change in technology new models of communication devices and phones. There exists the need for the company to remain up-to-date about the latest techniques as per the preference of consumers.
Recommendation to resolve key complex issues of during strategic management

Fear of uncertainties

The management of Vodafone should manage appropriate strategic planning with reference to internal business environment and external factor of current telecommunication sector. This is because lack of appropriate vision lead fear among management. Fear is termed as most important barrier to effective planning. It is mainly associated with the lack of success rather than the potential for growth.This element also increases difficulties of management of Vodafone to plan for the future of an organization.

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Shortsighted behaviour of staff

The management of Vodafone needs to develop an appropriate communication system with staff members. This is because Shortsighted behaviour of staff or managers within organization can cause executive managers to stop in their tracks. By focusing on current projects or short term gaols rather than broader, long-term goals and future growth and profitability, the management hampers the strategic planning process for attainment of different objectives. Therefore, an appropriate communication is play important role in strategic planning process. This is because the senior managers need to establish appropriate conversion with employees about the organization's purpose, goals, projects, differentiation, members, competitors, and how their departments and the employee's personal efforts contribute to the organization for attainment of strategic objectives.

Customer loyalty

For retention of consumers for long duration, the management of Vodafone should develop Innovative Loyalty Program through which company can influence perception of consumers. It also support telecommunication firm during service development process . In this regard, telecom companies are required formulate clear strategy in order to meet customer's expectations in the best possible manner and provide them value for money services.

Use of Social Media

As per the change in interest and lifestyle of consumers, technological advancement it becomes very crucial for every organization to make their presence in the the global market. This can be done by effectively employing a suitable platform that can be accessed by large number of users. Social media is one such platform that plays important role to attract new consumers from all over world. By using social media, telecommunication firms like Vodafone can establish direct communication with consumers to assess preference and feedback of consumers about service quality. This information should assist company for improving service quality and satisfaction of consumers. This will increase sales and revenue of organization in new as well as existing market.

Conclusion

On the basis of above assessment, it can be concluded that management has to considered several elements during the strategic planning process associated with business expansion such as level of competition, change in interest lifestyle of consumers, economic growth etc. This essay has evaluated that Yip and CAGE framework assists management in business planning and strategic decision by analysing several elements. This assessment has found that lack of communication, creative thinking etc. are acting as major barriers in strategic management.

References

  • Baker, P. D., 2007. Strategic Change Management in Public Sector Organisations. Elsevier.
  • Carlos, H., 2014. Strategic sustainability management and export performance. Management of Environmental Quality: An International Journal.
  • Gnosa, M. S., 2011. Global Business Strategy, GRIN Verlag.El-Ansary, A., 2006. Marketing strategy: taxonomy and frameworks. European Business Review.
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