Vodafone is a telecommunications company head quartered in UK and is a market leader in multiple

countries. It is a British telecommunications company which is operation in the regions of Asia, Africa,
Europe, and Oceania. As of 2018c Vodafone managed to rank 4 th in the number of mobile users globally.
Vodafone currently operates in about 25 countries and has partner networks in around 47 countries.
The company is known for its innovative marketing strategy. The company aims towards increasing its
market share through customer engagement as well as digitization. Telecommunications industry is one
which has seen several developments and is a dynamically evolving market which faces increase
regulations as well. The growth potential in the telecommunication industry primarily comes from the
developments and progress in the technology trends which than increase the market potential. The
competition in the telecommunications industry due to the same reason is also therefore intense. It can
then be said that in order for a revenue generation to stabilize or plummet the telecommunication
industry is one that requires the companies fighting for the market share to not only be aware of the
developing trends but also be able to have an understanding of their competitor’s strategic positioning
and developments. Vodafone has managed to establish itself as a significant wireless/phone provider
globally and holds a strong position in the market globally. The product portfolio of the company
consists of network business, distribution business, retail shops, data services, multi media portal, third
generation 3G, cellular/ PCS Operations and a couple more ( Vodafone,2000). Vodafone offers one of
the best leading wireless services in the industry and enables consumers to download data and other
information as well 2. In the year 2000 Vodafone peaked by being placed no.1 in the market
capitalization in the telecommunications market. Vodafone also managed to rank as the eighth company
in the Financial Time’s top 500 companies ( Financial Times, 2000). However In the year 2002 the market
value of Vodafone had observed a gradual decline due to reasons such as the 3 G licenses and the
internet bubble. Vodafone’s initial success was a result of its niche strategy, global positioning, strong
consumer demand and the changing demographics (Anwar, 2003).

Initially due to the early success of Vodafone it was widely praised by the analysts globally. The manager
of Vodafone have a clear understating of the market and therefore are well aware of the market
dynamics having been in the industry for a long time. The global diversification strategy of Vodafone has
also lead to its strive towards being a market leader successful. Vodafone achieves this through
acquiring selected web based and wireless companies through out various regions of Asia, Europe and
USA. This strategy allowed Vodafone to have a significant position globally beyond the UK market
however it is also crucial to highlight that as mentioned earlier the global tele communications industry
faces immense competition and the Vodafone due to the developing technological trends and relatively
increased ease in market penetration is soon to see intense competition. Telecommunications industry
is one that has evolved from being a solely voice based communication industry to a mostly data based
industry. A challenge that most companies face in this industry largely arise from the need to have
multiple strategies in order to remain competitive. The industry requires the companies to expand
beyond the reach of their main business and to strive for multiple streams to target multiple segments
and thus the maximum number of consumers. Therefore, in order to better understand the strategy of
Vodafone it would be quite sensible to do a PEST analysis of Vodafone in order to have a comprehensive
understanding of the overall strategy and positioning of the company. Due to the increases significance
of the services and valuations produced outside the geographical national and political boundaries the
concept of international market has become increasingly important overtime (Eren, 2002). The macro
environmental factor which was of relatively less importance ages ago has become increasingly
important as of today due to that notion having a global presence for any company allows it to establish
itself as a growth propellent industry. Strategic Analysis for a company is the first step for its strategic
management and primarily requires analysis of its environmental factors which dictate how its
operations proceed and thus is a crucial factor for the organization (Ülgen & Mirze, 2007). It can be
highlighted that the PESTEL analysis of a company has two major objectives which state the need for
understanding the environment in which the company operates and the second being the ability of the
company to predict and analyze the situational factors with the help of the PESTEL analysis. PESTEL
analysis therefore is a tool for strategic management and allows a company to flourish beyond its
regular functional capacity (Dinçer, 2004). It has a qualitive approach to analysis which allows to gain an
overall understanding of what the operational environment at the time looks like. This allows a rational
and logical analysis for the company to be made.

Political

Political factors and their significance in the global industry and market has grown over the years. This
evidently has also resulted in an impact in the dynamics of the operational factors specifically in the tele
communications market. Government interventions on businesses globally have also increased which
has also added an amount of pressure on brands that have a global presence such as Vodafone whose
global presence is also increasing steadily. The main markets of Vodafone are Europe, Asia and middle
east. However in this literature we will primarily focus on the Middle East market. Vodafone’s business
structure involves the value for customer loyalty therefore it has aimed to reduce its per unit tariff
charge in order to deliver maximum value to the customers for their loyalty (Butod 2009). The political
stability of the middle east region has stabilized the growth of Vodafone in the middle east market
which is not the case for the African market therefore the growth of Vodafone in the middle east market
in collaboration with the local ventures has lead to its growth.

Economic:

Economic Factors which are inclusive of  interest rates, exchange rates and the inflation rate. (Butod
2009) stated that Vodafone has a pricing strategy which allows its consumers to purchase its product in
a broader sense. (Banzhaf & Som 2006) a USP of the brand can be classified as its global factors, through
globalization it allows its consumers to be in sync global through a flawless network coverage which
allows them to have roaming data while travelling specifically on a rate which is then billed back to their
own hometown. Economic factors have a relatively intense impact on the international businesses . The
condition of the international economies in particular have an impact on the developing IT tedns and
their executions. Being a demand driven market economic factors in particular have an immense impact
in this market in particular. The growing competition is also impacted by the economic factor.

Social

Over the decade the impact of social factors on businesses have also gradually grown. Socio cultural
factors have the capacity to effect the sales in certain regions of the world more than others. Internet
penetration has globally grown as more and more professions are being on net reliant and being a
demand driven market the increase in demand for the internet has prove to be profitable for data
providers specifically for Vodafone. E commerce has also grown in the past decades which has resulted
in the increase in demand of online shopping businesses which makes up a huge segment of the data
users for Vodafone. Marketing in such a age is also reliant on the social factors which ahs also
dynamically evolved over the course of the past few years and this is also significant to an IT based
business such as Vodafone.

Technological

Vodafone is a technology based product and the impact of the dynamically evolving technology has a
significant impact on Vodafone. The company over the years has grown its range of products in order to
keep up with the customer demand as well as that of the evolving technology trends. Vodafone has
aimed to increase its user engagement and access through the introduction of the My Vodafone app as
well as the well designed Vodafone website which allows access to a range of Vodafone services with
more ease than ever before. This has allowed for a multi dimension presence for the business which has
contributed towards an effective marketing approach as well as a source of customer acquisition.
Vodafone has also employed digital technology for its marketing. The role of technology in the
telecommunication industry has grown over the years where this has also acted as a differentiation
factor for the industry this has simultaneously opened up several avenues for growth for the industry.
(Vodafone 2009) Vodafone provides a differentiation factor through its global presence factor by
offering services In good rates globally even in areas where network coverage could be a potential issue.

Environmental:

Environment and sustainability factors specifically in today’s day and age have a significant impact on
the businesses today. As the risk to the environment posed by businesses is increasing, the customer
concern for sustainable goal oriented companies with consideration for their environmental impact is
also gradually increasing. More and more companies globally are directing their concern towards
decreasing their carbon footprints. Therefore it has become increasingly crucial and significant for
businesses to construct a socially responsible image. Furthermore the government regulations has also
increased by ten folds propelling companies and businesses to display increased precaution towards the
environmental preservation methods. Vodafone as a sustainable company is also working to reduce its
carbon footprint. As a global market leader Vodafone is encouraging its customers to manage their
energy efficiency. The company ensure that its business operations allow increased efficeniceny without
unncessecary energy emission. The company has moved to purchase reneweable energy sources with
the agenda to preserve environment. This can sustainably reduce the energy emission by the company.
In addition to that it can also aid its customers to aim towards the reduction of their energy emission
through their sustaimibilty pro products. Their five year goal at the moment consists of reducing their
greenhouse gas emission by an estimated 50%. They also aim towards shifting their energy purchase
towards 100% renewable energy resources. As a market leader in IT services Vodafone also is aiming
towards aiding its consumers to manage their own energy sustainably and more than that to
significantly reduce the energy emmissons by the consumers. In the year 2000 Vodafone aided its
customers to reduce the emission of greenhouse gases by a staggering 2.9 tons for every ton of energy
generated from the business operations. This can then declare Vodafone to be a sustainable and
environmentally conscience company. Vodafone understands and comprehends the notions that the
climate changes need to be address immediately.

Global

Vodafone already has a global presence which has an increasing impact. From beginning its journey
from a UK based telecom seller to a dominant global brand over the past decade. However it does faces
regulations that apply to the telecommunication industry and these regulations take the form of a
specific law depending on the nature of the industry . Not only that Vodafone instrumentalizes its global
impact to empower women globally as well as the motto of Vodafone relies on the notion that
Information Technology can play a crucial role in helping women empowering and its causes. It does this
aiming to connect an estimate of about 50 million women to connect to mobile in emerging markets. It
also intends to employ its technology to improve the overall quality of women’s lives and eliminate
gender disparity through using it technology to apply characteristics  financial inclusion, improve health
and wellbeing, and build education, skills and entrepreneurship. It has a vision that states and aims to
strengthen its business through its commitment to diversity. It also aims to be an impeccable employer
for women stated in its vision in the company’s website.

Economics Of Mobile Market

Porter’s Five force Analysis

Porter (1980) devised a model for the analysis of an industry. These five forces are primarily used to
measure and gauge the intensity of competition in the industry, to gauge the penetration ease for new
competitor, the ease of entry of new competitor in the industry , the threat for the substitute of product
available to the consumer and the extent to which the supplier possesses the power to bargain. The
stronger these forces are the lesser the profitability of the company within the industry it operates and
vice versa. Pearce and Robinson (2005) highlighted that porter’s five forces allows an easy analysis of
the industry. This allows the analysts to do aan easy analysis of the industry. This allows to gauge the
profitability of an organization with the great ease within the context of the industry it operates in. Tomi
et al (2007) in his research analyzed the mobile service future using the Porter’s five forces model
however it needs to be highlighted that the social technological and environmental factors were not
included in the early research. Vodafone as of 2010 was world’s leading international mobile
communications group with an estimate of 347 million users.

Barganing Power of Suppliers

In the wireless communication industry all companies purchase their products from a number of
suppliers. Suppliers therefore with an increase in their bargaining power can reduce the margin of profit
which Vodafone receives. Suppliers in the technology sector employ their power to extract greater
margins from the companies and charge higher prices by using their negotiating power to do so. This
higher bargaining power leads to a reduction in the profitability of companies in the wireless
communication sector.

Vodafone’s Approach to Overcome Bargaining Power of Suppliers:

Vodafone in order to maximize profotibility strategizes to establish an optimum network of suppliers

and an efficient supply chain. Vodafo e also strategizes by having multiple product designs on hold
which allows the company to use multiple raw materials instead of being restricted to a sole supplier
this then allows the company to procure raw material from multiple sources. Another approach which
Vodafone can adapt can be classified as th e inherent strategy to find suppliers and engage in a business
with them of such nature where their business profitability and flow depends on Vodafone so the
dependency is two way and the power is shared between the two parties.
Demanding Power of Buyers:

In a demand driven industry the buyers hold greater power to bargain and as highlighted before, the
telecommunications industry is one that is demand driven. This therefore affects the long term
profitability of Vodafone. Therefore, the business strategy of Vodafone largely relies on prioritizing the
customer loyalty. (Grant 2016) highlighted the notion that the buying powers of the consumers is
sensitive to the context of the industry in which the company operates. Another reason why buyers on
the telecommunication industry have higher buying powers is due to the notion that the switching cost
within the telecommunications industry is quite low. Buyers can switch to lower cost alternatives with
quite ease. The competition in the telecom industry in specific is increasing day in and day out and in
addition the developments in technology which are dynamic are driving consumers to switch
alternatives with an increasing ease. This also leads the companies In the telecom industry to opt for
cost cutting and aim to for price reductions however that leaves them with lower profit margins. They
have to opt for price cuts in a competitive market so the consumers have a preference of sorts for them.
The rapid increase in price cuts has led to the reduction in the revenue for the users by a staggering
2.3% for mobile operators and 11.5% for fixed line (The Economist 2018)

Therefore, Vodafone must strive towards constant innovation of its product line allowing it to have a
range of discounts to offer value to the customers. Brand image then also becomes a priority in order to
retain a loyal consumer base in a competitive market such as this.

Threat of Substitutes:

In an industry where there are close substitues for products available to consumers a competitive
pricing the likelihood of consumers shifiting from one brand to another and the consumer loyalty in such
cases is inherently quite low. In the telecommunication industry the threat of substitute is specifically so
high, due to the availability of wifi and smartphones the sms and voice call services which have been a
major source of revenue for the telecom services have diminished to a great extent which has resulted
in being a great source of loss for the teleservice industry.  A 2018 report by The Independent
highlighted the notion that an increasing source of competition for the telecom service industry can be
the OTT service provides which are the major social media platforms that provide free alterntive servies
which are taking up a huge chunk of revenue for the telecom service industry and is a source of
immense threat for the telecom industry players. It has even been stated that at occurances in the
industry become so intense that at times the players in the industry reduce the price to a point that the
cost is higher and the price is unprofitiable. This becomes a source of incurring loss for the companies.
Whereas in industries where the competition is not as intense the companies to rely on competitive
advertising and differentiating techniques, The factors that determine the intensity of competition in
any industry can also be classified as the inherent factors of  concentration, diversity of competitors,
product differentiation, excess capacity and cost conditions. These factors can dictate if the companies
opt for differentiation or if they go for the route of opting for price cuts which occurs in the case of
intense competition and leads to losses and a source off revenue reduction at times as well however it
becomes a good