Opportunities Vodafone - Essay Example

Vodafone is a mobile system operator whose headquarter is in Newbury, England. It has been credited with being the biggest telecommunications network company all over the world with a market worth close to a hundred billion pounds. Currently, this company has equity benefits in twenty-five countries and an associate network in forty-one countries. Vodafone’s current strategy in business is to develop through geographic extension, maintenance of present customers, attainment of fresh customers, and increase usage through technological innovation (McLoughlin and Aaker, 2010: 111).

Vodafone’s results presented by the CEO on 19th May 2009 left everyone unimpressed. Before this report, it had been expected that the group would see free cash flow, increases in revenue, and adjusted profits (McLoughlin and Aaker, 2010: 111). Colao had been appointed as the CEO in July 2008 with the intention that the company’s performance would boost significantly. Colao is currently employing strategies to improve Vodafone’s performance in the future. He intends to reduce costs by 1 billion dollars by the end of 2011. One of the current strategic issues is a revenue-boosting factor. This shall be guided by a push indented to convince more customers to purchase mobiles competent in linking to the internet (McLoughlin and Aaker, 2010: 111). A further strategy by the CEO is to trade telecom services to other companies. There is a further strategy involving the expansion of services to other countries.

A resource-based analysis of Vodafone involves an investigation of the capabilities and resources that results in its strengths and weaknesses. For a careful analysis of Vodafone’s current strategy, some essential issues affecting the company both externally and internally need to be examined. Some of these issues include political factors, infrastructure, economic factors, social-cultural factors, technological factors, and demographics, among others. All these issues have an effect on the performance of the company either directly or indirectly. The government, for instance, tightly controls mobile phone licenses. Moreover, the infrastructure required to sustain mobile phone operations necessitate authorization from the government. On economic factors, the cost of, for instance, licensing mobile phones and construction of the network is high. Some of these issues have greatly influenced the company’s strategy. For instance, the company faced challenges at the beginning of the twenty-first century. Two advances stroke the company greatly. The first was the government’s decision on auctioning permits for wireless communication (McLoughlin and Aaker, 2010: 111). After a while, it became evident that the company had overrated and to a great extent paid for the permits. The second issue was the bursting of the technology, media, and telecommunications supply promotion (McLoughlin and Aaker, 2010: 111). This had a great impact on the company’s performance during that period. Its losses totalled 45 billion dollars.

Most critics have acknowledged Vodafone’s commitment to cost-cutting. However, it is arguable that all the world’s leading mobile operator needs are focused on more modern matters of efficiency. There has, however, been a concern that cost-cutting measures may not be efficient enough for the company to restore its fortunes given that its market is growing and maturing with time. It is, therefore, important that the company adopt ways of exploiting its presence within the globe through close cross-border incorporation. Vodafone should therefore consider itself a collection of large self-governing national operators sharing an ordinary business approach and a universal product.