Discuss about the Vodafone Comprehensive Strategic Management.
The EU Member States work together in the Council of the European Union, also known as the Council. The work of the Council is divided into ten policy areas. This report is directed to the senior management of Vodafone by focusing on the policy areas of the economic and financial affairs and the transport, telecommunications and energy council policy areas for the European Union member states. Vodafone Group plc is a UK based multinational telecommunication conglomerate having their headquarters located in London. The organisation runs and operates it network in 26 countries presently and it 50 other Nations, the company has partnered with other organisations to provide the network. Vodafone is currently providing IT services to the 12 European Union countries and contributed about € 23.7 billion in the overall growth of the EU (Al-Atiqi & Mumen, 2014).
In Europe, Vodafone operates in 12 member states of the European Union including the Czech Republic, Germany, Greece, Hungary, Ireland, Italy, Malta, Netherlands, Portugal, Romania, Spain and the United Kingdom. The network services provided by Vodafone and all the other Telecom operators together have made Europe the region with highest mobile services penetration. At present there are 579 million individual subscribers of mobile services across Europe and out of these 125 million people are customers of Vodafone and the organisation boasts of another 24 million business customers (Rodrigo, 2012). The distribution of the mobile customers of Vodafone across Europe is illustrated in the statistics below.
Vodafone has diversified its business over the years in the European Union from being only a telecom service provider to becoming a significant player in the entire communication technology industry. Currently the organisation deals in broadband services, internet of things, mobile telephone and cloud storage services (Vij, 2012). 66% of the total revenue of Vodafone in Europe come from the individual customers but the rest 28% enterprise revenue is an important growth driver in the business of Vodafone. The organisation is currently carrying more than 50% of the total data traffic running on the 4G network of Europe and it continues to introduce innovative products like Vodafone Speechmark, M-pesa, Vodacom and Vodafone Portrait and marketing them to stay competitive in the market and stay ahead of all their competitors (Euromonitor, 2013).
The European Union is one of the largest economic players in the world in terms of the total GDP. The economic integration of the countries has allowed EU to gain a significant position in the market and the continuous policy coordination between the member states provide them with the further opportunities to develop and grow themselves on the global stage.
The operations of Vodafone in Germany, Hungary, Czech Republic and Romania have solidified and there is a new level of convergence provided to the European customers which has also made the Global presence of Vodafone much stronger. Once the Vodafone deal with Liberty Global goes through, the competitive landscape of the Telecom industry in Europe will be completely transformed and the organisation can then focus on their Global footprint buy solidifying and carrying out transformative combination for the generating significant value for the stakeholders and strengthening the position of the company (OVUM, 2017).
Vodafone has realised the potential of the European Union and the UK based telecom giant is continously working towards expanding its operations across Europe. The discussions are on between the US cable company Liberty Global and Vodafone for the purchase of some of their European assets which will allow the company to strengthen their fibre infrastructure and provide the European with faster internet and data downloading. Vodafone currently has their operations running in more than 30 Nations and has partner operations in numerous other countries. The European footprint of Vodafone is significantly large and the organisation understands the potential that this region holds for them. Although there are significant restrictions on the consolidation of some of the largest Telecom operators of Europe, the deal between Vodafone and Liberty Global in the European Union will make the company the biggest competitor of the German telecom company Deutsche Telekom operating here (Keulen, 2010). The agricultural policies of EU do not have any significant impact on the working of Vodafone but it contributes to the economy of the region, which in turn affects the purchasing power and the lifestyle choices of the people.
Founded in the year 1991, Vodafone predominantly runs its operations across Europe, Asia, Oceania and Africa. It is ranked the fifth largest telecommunication Organisation in terms of the revenue and second largest by the number of connections operating across the world. The European commission promotes entrepreneurship by supporting the growth of enterprises and creates opportunities by opening up to them. While Europe and the European countries constitutes a significant part of the customer base of Vodafone, the Global operations of the company are equally significant and the organisation is constantly working towards expanding them while having a key focus on the European market (Feasey, 2008).
The economic and financial affairs policy of the European Union takes care of the issues related to budgeting, taxation, economic policy formulation and manages the operations of the financial markets with the help of the Economic and Financial Affairs Council. Which policy area was developed for addressing the various problems arising in the European Union to maintain the competitiveness in the industry and to ensure a growth in the employment rate. The council also takes care of the economic problems and the structural reforms to be brought about in the market. The transport, telecommunications and energy in the European Union is governed by the Council whose primary goal is to emerge as a world leader in the development and use of renewable energy. The European Union also wishes to include the transport and heating sector of all the participant countries in this goal.
Vodafone has deep roots in the Telecom industry and dysfunctional across numerous countries and continents all over the world. Originally belonging to the United Kingdom, the headquarters of Vodafone are located at London. The SWOT analysis of an organisation helps in understanding and analysing the internal strength and weaknesses of the company and finding out the external opportunities and threats that they are likely to face. It is an excellent framework to strategically analyse the performance and the position of the organisation with respect to the industry in which they operate. The SWOT analysis for Vodafone is carried out here.
Strengths: Vodafone is the second largest Telecom operator in the world by the number of subscribers and is the fifth largest Telecom operator by their revenue. The organisation post of a massive market coverage and has an extremely wide distribution and coverage of their network along with the subscriber base which makes them fairly popular as a brand and as a telecommunication organisation. The revenue generated by the organisation help in further enhancing the position and the ranking of the company. It is highly valued across international markets and the organisation generate billions of Euros every year in profits (Román, 2016).
The marketing initiatives conducted by Vodafone PLC are fairly popular and they are known to run various brilliant and endearing marketing campaign which enhance their brand recognition. Vodafone has already differentiated themselves buy emerging as a premium brand. While most of the telecommunication organisations across the world are engaging in price was and focusing on penetrating the market, Vodafone has differentiated itself as a premium service provider through all their marketing and communication initiatives. The subscriber base of the organisation is huge and is efficiently retained by them, year after year. The brand valuation and recall value among the customer is also very high which provides the organisation even greater strength among their competitive (BSI Group, 2016).
Weakness: Vodafone needs to focus on their core values and develop strategy for acquisition of more customers. The subscriber base of the company has remained stagnant for a few years now and therefore they need to focus on for the expanding it by conducting marketing drives to ensure that the remain profitable in the long run. The economical conditions in Europe and other countries of the European Union is not quite favourable at present. Brexit and economic instability is also impacting the organisations operating in it which is the reason why Vodafone has registered poor performance last year. About 40% of the revenue for Vodafone PLC comes from the Indian market and the United States of America as well as the United Kingdom do not generate much revenue for the company. These are the areas where the organisation is following week and they need to develop strategies to bring about the required improvement in their marketing activities and in their overall performance.
Opportunities: Vodafone need to focus on market penetration and run targeted marketing activities in the developing countries as these are the reasons where most of the revenue of the organisation is coming from. The emerging markets like Africa hold a lot of potential for the company as the citizens of these economies have a disposable income that is constantly increasing with the development of the nation. It is important that Vodafone communicates with these customers and offers customised and specialised plans to increase their customer base and to concentrate on these markets. The dependency of the people on mobile phone is exponentially increasing which is a great opportunity for Vodafone and all the telecommunication companies. The organisation needs to improve the network coverage two for the exploit the opportunity of increasing the customer base (Klauer, 2014).
Threats: The competition between the telecommunication organisations is becoming intense day by day. Vodafone faces tough competition global players like AT&T, China Mobile, Verizon, Reliance and Virgin. This high competition in the telecom sector impacts the profitability of all the organisations and differentiation strategy of Vodafone by keeping a premium pricing will not work for very long as the competitors continue to reduce the prices of their service offerings. The ability to port the mobile number from one operator to the other is another thread that has made it easier for the consumers to switch from one network provider to the other. The Telecom market has also become saturated and this industry is increasingly becoming less attractive for the companies due to the reduced profitability and intense competition among the existing organisations (Saplitsa, 2008).
The strategic recommendations for Vodafone PLC in order to improve their business operations in Europe are included in this section. There are areas in which Vodafone can improve and strategies which they can implement to further increase their revenue; enhance their brand and public image in European Markets. It is suggested that the organisation should focus the efforts and resources towards the promotion of the brand as the brand recognition and the value is decreasing in Europe. They also need to focus on making the network stronger by installing more towers across the European Union. The greatest opportunity that Vodafone holds is that it has a strong control over its resources and the financial planning of the organisation is excellent. They must continue to extend this control over the resources and gather information regarding the market. The organisation should also regularly anticipate and analyse the market trends to keep up with the changing environment of the telecommunication industry which is highly dynamic (Sekiguchi, 2010).
The marketing strategy of Vodafone PLC is also becoming weak in the European Union. The organisation must start advertising and develop a detailed marketing strategy based on the generational theory. They can practice segmentation of the market and target the desired customer segment. The organisation can also involve a celebrity for endorsement of the brand which will fit the values and the primary message of the company. Rigorous marketing practices of the company may contradict with the primary aim of Vodafone of remaining a premium brand. Therefore, these strategies should be carefully developed while ensuring that the brand continues to maintain their status in the market and the celebrity chosen to endorse the brand should also match with the company image so that the required message is properly communicated to the desired customer segment (Fern Fort University, 2018).
Vodafone should also focus on the rural customer as the urban areas are becoming saturated and there is a little scope of growth and increase in the subscriber base from them. The rural areas that are still experiencing the introduction of internet based phone service hold a lot of opportunities for the organisation. There is not much investment required for carrying out these activities and will increase the productivity and the profitability of the organisation. This will also help them in achieving their sustainability goals at the implementation of these strategies will allow Vodafone PLC to develop, expand and flourish in the European markets.
References
Al-Atiqi, A., & Mumen, F. (2014). The Strategic Alternatives of Vodafone UK in 2009. Retrieved from https://www.researchgate.net/publication/283579555_The_Strategic_Alternatives_of_Vodafone_UK_in_2009
BSI Group. (2016). BSI Entropy Case Study Vodafone UK. Retrieved from https://www.bsigroup.com/Documents/entropy/case%20studies/BSI-Entropy-Software-Case-Study-Vodafone-UK-EN.pdf
Euromonitor. (2013). Vodafone Group Plc in Consumer Electronics. Retrieved from https://www.euromonitor.com/vodafone-group-plc-in-consumer-electronics/report
Feasey, R. (2008). Roaming workshop. Retrieved from https://ec.europa.eu/information_society/activities/roaming/docs/workshop/vodafone.pdf
Fern Fort University. (2018). Vodafone Group Plc Porter Five Forces Analysis. Retrieved from https://fernfortuniversity.com/term-papers/porter5/analysis/4028-vodafone-group-plc.php
Keulen, R. (2010). Vodafone helps TomTom build competitive advantage across Europe. Vodafone Group. Retrieved from https://www.vodacombusiness.co.za/cs/groups/public/documents/document/pocm01-542127.pdf
Klauer, T. (2014). Valuation of Vodafone Group. Retrieved from https://studenttheses.cbs.dk/bitstream/handle/10417/5534/thomas_klauer.pdf?sequence=1
OVUM. (2017). 4G International Roaming Coverage – Operator Comparison: A Report for Vodafone. Retrieved from https://www.vodafone.com/content/dam/vodafone-images/media/Downloads/170224-Ovum-4G-Roaming-Report.pdf
Rodrigo. (2012). Strategic Analysis of Vodafone Group PLC. Retrieved from https://writepass.com/journal/2012/06/strategic-analysis-of-vodafone-group-plc/
Román, F. (2016). Vodafone Spain Integrated Report. Retrieved from https://www.unglobalcompact.org/system/attachments/cop_2016/320551/original/Vodafone_Spain_Integrated_Report_2015-16.pdf?1475137165
Saplitsa, I. (2008). Business Analysis and Valuation of Vodafone Group. Retrieved from https://brage.bibsys.no/xmlui/bitstream/handle/11250/168107/Saplitsa%202008.pdf?sequence=1
Sekiguchi, T. (2010, December). Vodafone Comprehensive Strategic Management Model . Retrieved from https://www.slideshare.net/torus/vodafone-comprehensive-strategic-management-model-6170809
Vij, P. (2012). Analysis Of 3g Uk Mobile Industry And Comparison With Vodafone Network Based On Consumer Satisfaction Survey. IOSR Journal of Business and Management (IOSRJBM), 2(6), 37-44. Retrieved from https://www.iosrjournals.org/iosr-jbm/papers/vol2-issue6/F0263744.pdf
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