Services Marketing - Essay Example

In 2001 Vodafone ranked first in market value amongst British companies. Companies are affected by macro and micro factors at every stage of the product life cycle. It had always been a first-mover taking advantage of the consumer demands but by 2002, Vodafone’s shares started declining. It had already made huge investments in the 3G technology and the returns were not as expected. Global wireless markets became saturated due to slowing down of demand and increased competition. The company drew a lot of attention in the global market due to its high-profile acquisitions.

Their entrepreneurial culture became a hurdle in handling saturation, competition and overexpansion which led to departure of many executives. Its recent £23.5bn write down earned it the title of biggest loss in UK corporate history (Best, 2006). The shareholders, executives and workers are all displeased with the current state of affairs. Sustaining high performance is difficult, which was the main problem that occurred at Vodafone. Being first-movers and market leaders led to complacency and over-zealous attitude.

Vodafone perhaps overlooked that services have distinct characteristics as they are intangible in nature, inseparable, heterogeneous, perishable and have a different concept of ownership (Gabbot & Hogg, 1997 cited by Zwan & Bhamra, 2003). Accordingly, five capabilities support services innovation strategy: These capabilities can drive growth that paces industry performance say Kapur, Ferris, Juliano, & Berman (2006). Based on these parameters, this report will ascertain the problems that arose in Vodafone, what efforts it made to overcome them and suggest the possible solutions to the organization.

The Universal Mobile Telecommunication System (UMTS) systems and services were supposed to enter the market by 2002/2003 (Ballon, 2004). This was to be a transition from 2G to