The Lean Sustainable Supply Chain - Vodafone - Case Study Example

The Lean Sustainable Supply Chain - Vodafone Introduction The strategic planning process acts as an essential activity for nearly all firms across the globe. Strategic planning guides the functions of an organization, assists in maintaining long-term vision as well as aids in the process of allocation of human and financial resources. Individual objectives, financial and programme reporting, annual team work plan and annual budget are the four pillars of strategic planning process of an organization (Rusinko, 2010). Strategic planning also plays an indispensible role in ensuring that all company individuals are working towards the same goal. Hence, considering the current scenario of the business environment, it is important for every company to carry out strategic planning before functioning in the market place. In this paper, the strategic planning process of Vodafone will be presented. This project is not only aimed at studying the existing strategic planning of Vodafone, but the aim is also to formulate a strategic plan for the business to grow over the next three years. The company chosen for this assignment is Vodafone. Thus, a brief overview of Vodafone, prior to recommending the strategic plan for the forthcoming years, will be important. This will enable the readers to gather better understanding of the scenario. Vodafone: A Brief Overview Vodafone Group PLC, commonly known as Vodafone, is a UK based global telecommunication firm. The company had started its operation from 1991 and before that, Vodafone used to function as Racal Telecom. Vodafone has its registered office at Newbury, Berkshire and is headquartered at London, UK. The company is adjudged as the third largest telecommunication company of the world, in terms of revenue and number of subscribers. The global telecommunication industry is led by China Mobile with a staggering 453 million subscribers (Vodafone, 2013). At present, the company operates in more than 21 countries and has licensed partners in 40 other countries. It is noticed that the Vodafone Global Enterprise division alone offers IT and telecommunication services catering to corporate clients in more than 65 countries of the world. The total employee strength of the company is 91,272. The company is listed at London Stock Exchange and is a London Stock Exchange constituent. In the financial year 2012-13, the company has earned revenue of £44.445 billion and made a profit of £429 million (Vodafone, 2013). Some of the important products of the company, apart from core service offerings (telecommunication and IT services), are Vodafone Mobile Connect USB Modem, Vodafone Eurotraveller, Vodafone live, and Vodafone Connect to Friends. Key Success Drivers and Current Strategic Direction of Vodafone Few factors that have been key drivers of success for the company are the wide range of products and services as well as high stability of the management. In almost 25 years of operation, the company only had three CEOs. In addition, reports have suggested that the company has always functioned with proper strategic plans, be it in the field of marketing or operations. The company gives enormous importance to the other essential factors such as, sustainability and corporate social responsibility, which in turn positively impacts Vodafone by generating a sense of trust among the consumers (Vodafone, 2013a). Furthermore, factors such as, diversified geographical profile, high brand awareness and improved customer services, have driven the organization and made them stand out among the mass. The company is currently aiming for further development of their market position, thereby carrying out market expansion. The same can be achieved through continuous innovation. For example, development of technology from 3G to 4G can be effective for the company. Besides that, the company is also seeking product diversification and is trying to imitate the business model of China mobile so as to reach new heights in the global telecommunication sector. These aforementioned factors render Vodafone distinct from other telecommunication companies. As a result of the core competencies, the company have developed considerably in the last few years, which has allowed them to expand the operations in various parts of the world. In the next section, the study presents a strategic plan for the business to grow over the next three years. SWOT Analysis SWOT analysis is a strategic management tool that is used to analyse strengths, weaknesses, opportunities and threats experienced by an organization. In this section, the same will be identified for Vodafone; and on basis of the same, a new strategic plan for the company will be devised. Strengths Diversified geographical portfolio, allowing the company to cater to a diversified customer base. With high brand awareness, visibility of the company in the market place is reasonably high. Better customer service is one of the key strengths of the company. Strong network of distribution as well as research and development cell (Stacey, Griffin & Shaw, 2000). Weaknesses The company’s presence in countries, such as, US and Brazil, is weak and as a result of that, global visibility is low (Vodafone, 2013). The company has been under the scanner of various governments on account of tax frauds. Opportunities The company has the opportunity to tap the growing markets of Latin America and strengthen presence in U.S. Strengthening research and development activities The company should also grab the opportunity to incorporate transparency in operation as well as to involve in philanthropic activities for generating a sense of trust among the consumers. Threats The global telecommunication industry is extremely competitive where new players are gradually on the rise, thereby making it difficult for the company to stabilize their presence and embrace growth. Tightening of the law and order is becoming a cause of concern for the company and mismanagement might lead to payment of hefty financial penalties. From the SWOT analysis carried out in the last section, key areas to which the company should pay more attention are transparency in business, improvement of research and development infrastructure as well as development of a sense of trust among the consumers. Transparency in business is one of the most crucial factors on the basis of which a company is judged. In the similar way, enhancing research and development and generating a sense of trust among the consumers are key business drivers. The absence of the above factors can lead the company towards disaster and even negatively impact the operation (Wagner & Svensson, 2011). . Recommended Strategic Plan The challenges identified above are opportunity to grow in emerging markets of the world, development of new technology and greater focus on transparency in the business. In order to achieve these, the company is suggested to expand their global presence by exercising dual branding approach. The company has already entered into a treaty with 30 other corporate companies, which make operations in the overseas countries relatively easier. The company is strongly recommended to consider expansion in the untapped markets such as, Latin America. In order to initiate the operation, the company can use joint venture strategy with another telecom provider of the host country. This initiative will allow the company to expand geographically and will also be able to comply with the local rules and regulations. So, the company should actively seek global expansion in the next couple of years through joint ventures. The company is also recommended to improve their level of product diversification. For example, the company only sells certain telecommunication devices and low-end handsets. As a result of that, their appeal is comparatively lower than other companies. Hence, in the next 2-3 years, Vodafone should actively aim for development of new products along with that of their core services. For example, development of electronic gadgets under the Vodafone brand can present the company with a new strategic direction. Economy of scale is another key area, where the company should put more emphasis. Realisation of economies of scale is only possible through partner network agreements and horizontal acquisition (Palevich, 2012). In the context of business levels strategies, Vodafone is recommended to pursue differentiation strategy. This is because; if the company pursues cost leadership strategy, it will go against their image as Vodafone is always known to be a premium connection. In the similar way, pursuing niche strategy will eventually reduce the market size of the company and will have direct impact on profitability. Moreover, with differentiation strategy, the company can produce new and innovative products and services through which the market size can be substantially increased. Hence, in the next three years, the company is recommended to come up with new products and services that will allow the company to target new consumers. Suran (2002) believes that through this approach, expansion of market size is possible. The company is strongly recommended to strengthen their corporate governance. With good corporate governance, the company will be able to add transparency in their operation. Vodafone has been under the scanner of many governments regarding corporate tax issues. Therefore, strengthening of corporate governance will enable the firm to function with transparency. In addition, further investments in the field of charity and corporate social responsibility will greatly improve Vodafone’s reputation in the market place. The reputation that had been lost in the market due to the issues of tax-fraud can be regained with application of such approaches. Numerous studies have shown that CSR activities are not only responsible for improving reputation or strengthen market position of a company, but simultaneously also offers the same with various other financial advantages in the form of increased revenue. Therefore, implementation of the corporate level and business level strategies recommended in the previous section in the next 2-3 years will be beneficial for the firm. The benefits will appear in the form of increased market size and revenue as well as greater market reputation. Most importantly, this strategic plan will assist the company to grow in the years to come. Evaluation of the Strategy Once the strategy is devised and implemented, the next important task is to evaluate the extent to which the same is successful. The strategy will be evaluated on the basis of the following factors: - 1. The company’s market size before and after implementation of the new strategy will be tabulated so as to identify the impact on company’s global expansion plans. In addition, revenue earned by the firm will also be tabulated. A growth will indicate positive impact of the strategy. 2. The company is recommended to carry out a survey to understand the perception of consumers. The customers should be asked for their opinion on company’s philanthropic and socially responsible approach. References Palevich, R. (2012). The Lean Sustainable Supply Chain: How to Create a Green Infrastructure with Lean Technologies. New Jersey: Pearson Education Inc. Rusinko, C.A. (2010). Integrating sustainability in higher education: a generic matrix. International Journal of Sustainability in Higher Education, 11 (3), 250-259. Stacey, R. D., Griffin, D. & Shaw, P. (2000). Complexity and Management – Fad or Radical Challenge to Systems Thinking. London: Routledge. Suran, S. (2002). How to Implement Change Effectively. Journal of Corporate Accounting & Finance, 14 (2), 31-37. Vodafone. (2013). Vodafone Group Plc: The Way Ahead. Vodafone. Retrieved from http://www.vodafone.com/content/annualreport/annual_report13/downloads/vodafone_annual_report_2013.pdf. Vodafone. (2013a). Footprints: Making a difference one step at a time. Vodafone. Retrieved from http://microsite.vodafone.in/sustainability/pdfs/sustainability_report2013.pdf. Wagner, B. & Svensson, G. (2011). Conceptual development of a sustainable business approach. Cuadernos Aragoneses de Economı´a, 20 (1/2), 19-34. Read More