Vodafone Mobile Communications - PowerPoint Presentation Example

Slide 2 There is no sphere of human activity as telecommunications that have been as variable as it is. Mobile telecommunication sector acts as a primary engine in accelerating the economic growth and in the ability to offer more options for people to be closer to their families and friends using smartphones or tablets (Wakefield, McNally, Bowler & Mayne, 2007). The unprecedented opportunities of modern mobile technology have become the integral part of everyday life of people with around three billion mobile users on earth. Slide 3 One of such mobile communications providers that operate in more than 30 countries around the globe and with 360 million customers is the British multinational telecommunications company Vodafone (Vodafone through the years, n.d.). Starting as Racal Telecom, Vodafone soon adopted its current name and through acquisitions by 2009 it has already operated in more than thirty countries with forty three partner networks and serves three hundred and sixty millions customers in Europe, Middle East, Africa, Asia and North and South Americas and Australia. Such achievements became possible by implementation of the aggressive strategy that the company started since the 1990s. With the coming of new CEO Vittorio Colao, the company focused in maximizing the value of the existing customers, expansion in mobile data services, enlarging them to the emerging markets and strengthening of the capital expenditure (Strang, 2010). Slide 4-5 Being a multinational company, Vodafone’s performance depends greatly on the different external factors that impact its activities. Therefore, the ability to analyze and managing political, economical, social and technological factors will allow the company to create valuable opportunities for its further strategy. The best model that is used in scanning the external macro-environment is the PESTEL analysis. Thus, among the political factors there is an impact of EU Regulatory Framework for the communications sector on Vodafone’s activities, as it called for the reduction of mobile phone termination rates as a result of enacting of national laws after implementation of EU Framework (Saplitsa, 2008). Besides, the regulations within each of the operating countries, along with the rules for traditional trade and selecting of staff vary and thus require company to analyze how they can impact the overall performance. Among the economic factors that affect Vodafone is the growth of GDP, the level of inflation rate within the countries where it operates and the regulations of taxation. According to Strang (2010), there is also a certain social effect on how Vodafone runs its activities. There is a demand for new services not only from Vodafone, but also from other players in the telephone industry. Such changes are imposed by the demographic peculiarities such as consumption level, education and job markets. Lifestyles changes are among those factors that can negatively influence the use of mobile services as of Vodafone’s as others’. The other challenge for Vodafone is in the development of new technologies, such as growth of IP, the appearance of new broadcasting technology and the upgrading of speeds of fixed and mobile networks (Strang, 2010). The modern customer is also a sustainable one, therefore the “greener” the company is, the more trust it earns. Slide 6-7 In building of certain strategy for business development, each company should take into account such imtportant forces as power of buyers, suppliers, threat of new entrants, substitutes and the degree of rivalry. Strang (2010) reports on the increase of number of people who use mobile telehones in UK. Vodafone is the second largest company within this country with twenty-six per cent share of revenues. Strong growth is also noticeable in the emerging countries of Asia such as China, India, Pakistan, in Latina America and Europe, including Turkey and Russia. Strong competition among the similar to Vodafone companies especially in UK is highly regulated, however in the emerging markets the company has better opportunities. Still, such big corporations as O2, T‐Mobile and Orange require Vodafone to certain strategic changes. While the profit pressure leads the companies to the consolidation, such companies as Orange and T-Mobile have already thought about the merger, however, Vodafone’s sharing agreement with O2 will not only give it certain competitive advantage, but will also enable both companies to continue to manage their own networks and share ownership of the towers, masts and sites (Strang, 2010). Speaking about the force of substitute, research showed that the general number of fixed lines fell because of the better conditions for the subscribers of mobile services (Saplitsa, 2008). However, the new technologies such as WiMax that are a serious rival to Vodafone can create the less confortable conditions for the company in its decision to find the substitute for its main product. Since the mobile industry is highly regulated and protected, the new entrants are not likely to appear. Besides, due to the initial fixed cost requirements, there are certain barriers to entry for the new companies. Porter’s force of suppliers is applied to Vodafone is its attempts to create brand competitive stronger than Nokia’s, with which it will obtain certain independence. Slide 8 The main strength of Vodafone is its brand and recognition. While established in globally, the company has invested in marketing and promoted its special life style tha its customers take as an advantage. In addition, the presence on almost all continents increases the image of the company that supports every nation and its people while they are travelling, doing business and enjoy Vodafone’s services. Moreover, even if the company does not present its services in certain country, for example in Norway, it uses good strategic alliances with the local operators, therefore creating more opportunities for the clients. However, the economic conditions of certain countries, the crisis and weak economy bring reduction of use of the Vodafone services, therefore harmfully impacts the company’s profile. Competition is also strong as between the companies in UK as in the countries where Vodafone operates. Despite the agreement with O2, Vodafone still is pitched against such companies as Deutsche Telekom and Orange. Vodafone does not provide wireless telecom services in the U. S., therefore losing the great number of potential customers in such a big and developed country.   With the revising its strategy and new CEO, Vodafone’s opportunities for enlargement of profit are reopening. The company hopes for the 4G network and faster speeds. Beside, new opportunities are emerging in India, in the regions with a great number of new customers who will bring the company revenue in approximate growing in ten per cent (Strang, 2010). Market saturation in Europe with thirty per cent of subscribers is a challenge for Vodafone, as it provides two-thirds of the revenue of the company. The threat for the company is the unclear regulatory climate with its reduction of roaming charges that new EU regulations have implemented. The other threat to Vodafone activities is the rise of modern technologies and applications that enable people to use free services, such as Skype and not take into account free minutes in Vodafone. Slide 9 Vodafone strives to create the value for all its stakeholders by making everything possible to be the major player in the society. Therefore, its value chain demonstrates how Vodafone implements the steps for achieving the greatest impact in society. Such areas as people, customer obsession, global scale, operational excellence, supplier relationship management and sustainable supply chain are the main areas that allow Vodafone to create the most value. Thus, by people the company means the organization, skills and development of each employee. The specific KPIs allow Vodafone to analyze the customers’ level of satisfaction of the services. Besides, the OneSCM supply chain community was created in order to procure products and services for greater number of applications to assist their business (Discover supply chain, n.d.). Slide 10 According to Telegraph (Ficenec, 2015), the Vodafone Company has strengthened its position in the mobile market of Europe through improving its service. However, based on the trading update of the last week, the company is still weak regarding its U.S. competitors. While the company has finished the deal with Spanish Ono, it uses the cash that was received for selling the Verizon Wireless business.In 2013 it also purchased Kabel Deutschland, the German company in hope to design better future. The other media resource, Reiters, reports on Vodafone application of India’s central bank in order to get the permit for operation the payments bank, the aim of which is to ensure basic banking services to the millions of Indians (Tripathy, 2015). Reuters states that Vodafone India Ltd utilizes options for partnerships. Read More