Executive summary:

This report aims to provide a thorough analysis of a FTSE 100/250 company and its
current operations. This report will provide readers with a details of the company’s
digital and strategic operations while providing a systematic approach for the future. 
Table of Contents
Executive summary:...................................................................................................................1
Introduction:..............................................................................................................................3
External macro analysis:............................................................................................................3
Political position.....................................................................................................................3
Economic factors:...................................................................................................................3
Legal factors:..............................................................................................................................4
Technological factors:............................................................................................................4
Environmental factors:...........................................................................................................4
External Micro Analysis:.............................................................................................................4
Porter’s 5 forces:....................................................................................................................4
Competitive Rivalry in the Market.....................................................................................4
Threat of Substitutes..........................................................................................................5
The Threat of New Entrants...............................................................................................5
Bargaining Power of Buyers...............................................................................................5
Bargaining Power of Suppliers...........................................................................................6
Industry life cycle...................................................................................................................6
Internal Resource Capabilities:..............................................................................................7
Conclusion:.........................................................................................................................8
Corporate level strategy:.......................................................................................................8
Stability Strategy:...............................................................................................................8
Turnaround strategy:.........................................................................................................8
Growth Strategy:....................................................................................................................9
Vertical and Horizontal Strategy:...........................................................................................9
Business level Strategy:..............................................................................................................9
Final Recommendation:...........................................................................................................10
5-year plan for ensuring growth:.............................................................................................12
Bibliography.............................................................................................................................13
Introduction:
Vodafone is a telecommunication company that started its journey in Europe in 1984
branching out in 22 countries in Asia and Europe and Africa. From the beginning,
with proper business strategies, it expanded drastically to become major European
telecommunication by the 2000s. After its success in Europe started stretching its
business to different corners of the world. 
In 2002 Vodafone was the largest with 93 million subscribers and the company’s
operations had reached over 29 countries on every continent of the world. 
(Anwar, 2003)

This report aims to provide a clear understanding of the current operations of the
company. It will provide a detailed examination of their current position and future
possibilities. It will also give an effective plan for the company to successfully follow
for 5 years. 

External macro analysis:

The pestle analysis is used as a tool of situational analysis for business evaluation
purposes and is one of the most used models for the evaluation of external business
environment that is highly dynamic (Perera, 2007)

The brand Vodafone has been in the market for 31 years, and more or everyone who
keeps track of news and media has heard their name. Since its emergence, it has
seen tremendous growth and has been the first choice of millions if customers
worldwide. This pestle analysis will study its prior and current weaknesses and
successes in several aspects.
Political position:
Vodafone has been politically outgoing wherever it came to securing its positions
politically in its international expansions. However, in 2002 European parliament
established the law of universal telecommunication service allowing the customers to
change their cellular company without having to change their cell phone number.
This had particularly affected Vodafone as it gave rise to competition. After seeing
their loss for years in India the government finally gave it some space to breathe.
India's third-largest service provider, Vodafone Idea, this week opted to convert part
of its spectrum and Adjusted Gross Revenue (AGR) dues into equity in 2022,
allowing the Indian government to become the company's largest shareholder with a
nearly 36% stake. This ensures the long-term survival of the company and also that
there are going to be three main private players in the country (Kaur, 2022)

Economic factors:
Since Vodafone has expanded outside the UK into Asia and Africa, it has also
employed many people from those regions, contributing to the local economy. In
2021 their employee number reached around 94,000 worldwide. However, due to the
COVID pandemic, it has suffered losses and still trying to recover from it. It may
seem surprising since it is a telecommunication company, but as people stayed
home, they didn’t need much cellular interaction considering the ubiquitous with
broadband. 
Legal factors:
In 2016, Britain fined Vodafone VOD.L a record 4.6 million pounds ($5.60 million) for
"serious and sustained" customer failures, including not updating accounts when
mobile phone users topped up their credit to make calls. Some 10,452 of the mobile
phone giant’s pay-as-you-go customers collectively lost 150,000 pounds over a 17-
month period between the end of 2013 and April 2015 . (Staff, 2016)

However, in 2020, India lost a high-profile tax arbitration case with Vodafone of
22,100 crores. This kept Vodafone from losing its already feeble position in the
Indian market. 

Technological factors:
Vodafone has always been at the forefront while adopting and adapting to cutting-
edge technology. Recently they have adopted IoT to help its customer to keep track
of the things they love. Their GPS trackers include Curve pet tracker(for pets), Curve
GPS tracker(can be used for almost anything), Neo(for kids), etc.

Environmental factors:
Most consumers always observe a business’s impact on the environment. Thus,
most multinational companies are trying to reduce carbon footprint and overall
environmental pollution. 

Vodafone started out in the UK but successfully expanded to other continents.

Where it has seen its golden days it has also had trouble shoring up its balance
sheet in some regions. Even under adverse conditions, Vodafone has tried to reduce
its impact on the business as much as possible. Currently, it is going through its
rough patch in India. The government has been supportive to help it stay in the
market, but it still needs a lot to recover the losses. In the meantime, it has added a
new value to its technological facilities. The GPS trackers are a breakthrough for
earning customer admiration. The environmentally conscious initiatives like using
100% renewable energy in the European network are a major source of client
satisfaction as well. The overall effect of Vodafone on the telecommunication
industry has been relatively positive. 

External Micro Analysis:

Porter’s 5 forces:
Competitive Rivalry in the Market

The UK market as several key competitors for Vodafone mainly: British Telecom (BT),
British Sky Broadcasting Group, and Telefonica & Virgin (O2). All these companies
made over a billion pounds in revenue and created intense competition in the
telecom market (Dragosavac, 2022). One of O2’s subsidiaries Giffgaff, mainly for the
Scottish side of things, made almost half a billion pounds in revenue last year yet they
did not cross 300 employees (Telefonica Annual Report 2021, 2022) . These
competitors have deep pockets, bright talents and beautiful strategies that are sure
to play a part in the story of Vodafone.

However, Vodafone is one of the leaders of the market in terms of subscribers and so
can make strategic decisions to deal with the competitive rivalry in the market. So,
the Competitive Rivalry in the market force would be considered as high or strong.

Threat of Substitutes

Threat of Substitutes is also high specially in case of internet calls taking over the
primary business of telecommunication industry. According to American provider
AT&T only 20-25% of phone calls are offline now a days. Wifi calls before and during
corona was much more common (Kang, 2020). Vodafone itself have massive
investments in the sector. It has taken the decision to connect 8 million homes and
small businesses with high-speed full fibre connections that tend to bring in more
money and better B2B capabilities taking a play out of BRAC’s playbook (Vodafone,
2021). Other than internet itself another important substitute force is EU Directive
2002/22/EU as UK allows people to move between competitors without changing
their carriers (EU, 2020). So, the threat of substitutes is high in case of Vodafone.

The Threat of New Entrants

Threat of new entrants is an interesting aspect of the telco industry in the UK. Most
industries here are very easy to get into as business infrastructures are quite strong.
However, the market is intensely monopolistic and capital heavy (Research and
Markets, 2021) . In fact, UK Telecommunication industry spent a total of 1.8 billion
euros at the last spectrum auction (Ofcom, 2021) and the industry spends tens of
billions on their operation as a whole (Research and Markets, 2021) . Recent success
of new brands tell a very different story however. Hip young brands (mainly Giffgaff)
piggybacking off existing infrastructures are able to garner attention and create good
growth in this mostly stagnant market (WARC, 2020). So, threat of new entrants
remains low on the side of neutral.

Bargaining Power of Buyers

UK consumers bargain with their pockets. With substitutes and competition in full
force the bargaining power of buyers remain individually low but high. The consumers
are not represented by any union and have several regulatory authorities to voice
their concern towards. UK Government generally doesn’t touch pricing strategies of
its businesses however recent political atmosphere has driven most political parties
pursue big fines against companies including Vodafone, which got fined 4.6 million 6
years ago (Reuters, 2016) .
Yet, bargaining power of buyers are still going to be considered as low as political
climate dependant power isn’t really a character of the market independently. This
remains a force to watch out for.

Bargaining Power of Suppliers

As producer’s telecom service companies are suppliers of their won product so the
bargaining power of suppliers remain neutral.

Industry life cycle:

(London Stock Exchange, 2022)

Although stock prices may not be the best indicator of market stages some aspects of
the product life cycle can be derived from the mentioned chart. We see that periods
of intense growth are over of Vodafone. They mostly target niches and the
international market now (Vodafone, 2021).

Investor interest is on the decline. This may be due to Corona situation but much
more likely due to the company reaching market saturation of their core businesses
around 2014 (Moorhouse, 2021). I believe that Vodafone UK is currently in decline
phase although the conglomerate in its entirety is in maturity as African and UK
market provide cash cow support to the growth markets in southeast Asia (Vodafone,
2021).

Conclusion: Vodafone has the strategic and financial prowess to deal with any force
the market generates at it. However, the state of the market being stagnant with
profit being high while growth being low does not do investor confidence any
favours. Vodafone and the telecom industry has become the epitome of “Cash Cow”.

Internal Resource Capabilities:

Organizational

Competitive
Advantage
Imitability

Support
Value

Rare

Resources Remarks

Track Strong No Tech background board

Record of Yes - Yes Yes strategic member. Sound strategic
Leadership leadership business decisions made.
Pricing Is not planning to become a
- - - - None
Strategies “value-for-money” leader.
Customer Leveraged its
23% of customers
loyalty
Network Yes Yes - - contribute 84% of revenue.
program and
and Loyalty (Villanueva & Soldado, 2018)
pricing.
Vodafone works with third
parties to generate IoT tech
and expects them to
integrate its tech within
Emergence of their products. Lack of
IoT sandboxed control over this tech is
Yes Yes Yes Yes
investments IoT tech foolish (Blackman, 2021).
problematic
However, IoT connections
had a 20% rise, highest
among all its products
(Vodafone, 2021).
Presence in
AI, E-
commerce Vodafone has presence in a
Other 4IR and plethora 4IR space including
Yes Yes - Yes
investments blockchain Blockchain, AI EoT and
may generate specially e-commerce
geometric
growth
Community Yes Yes - Yes App mining Vodafone enroute to 65%
 Organizational

Competitive
Advantage
Imitability

Support
Value

Rare
Resources Remarks

penetration of its selfcare

data for
Building app which is generating
better UX
customer data.
Several
B2B Sustainable competitive
Yes Yes Yes investments
strategy advantage in the B2B sector.
towards B2B
Conclusion:

Vodafone has more than enough key resources to satisfy the current market
requirement and then some. So, threshold capabilities are met. In fact, with solid
investments in future disruptive technologies allows Vodafone to develop
competitive advantage in this brave new world. Sadly, a lot of these technologies are
not fully developed by Vodafone rather it belongs to third parties. This is a common
issue in matured companies to focus on the bottom line over the top line. Vodafone
needs to address these issues.

Corporate level strategy:

Stability Strategy:

Stability Strategy is a corporate strategy where a company concentrates on

maintaining its current market position. A company that adopts such an approach
focuses on its existing product and market.

Vodafone has grown beyond stability strategy. In 2020 while the world was suffering
due to Corona, Vodafone quietly upgraded its infrastructure to ensure IoT rollout is
smooth and customer experience is improved. This is one of the few cases where
Vodafone is seen trying to protect its position in the market. Otherwise, Vodafone is
betting on growth from its tech and international investments which coincide more
with Turnaround strategy.

Turnaround strategy:

Some key turnaround strategies are discussed below:

 Remote Working: Vodafone has worked with zoom, slack and discord to
ensure the demand for on-the-fly stable internet is met.
 IoT: Vodafone has bet big on IoT and is set to reap its rewards. With around
20% year over year growth in the niche.
 Complete Green and Digital Transformation: As the EU approved over 600
billion Euro for its NextGenerationEU mechanism, its going to force Vodafone
to commit to 100% digital transformation as soon as possible.
  Digital Payment: A focus on Africa has put Vodafone up there with PayPal in
certain African countries with the app “M-pesa”. Other than that the company
has targeted a 95% penetration of its self-care app, MyVodafone.
 Fixed line and convergence: Vodafone leadership believes that internet itself is
turning from a Wide Area Networks (WAN) based model to Software defined
Networks (SDN) based model. This helps to integrate certain services within
the micro chasm of internal networks. This move is a godsend for SOHO, SME,
and e-commerce clients.

Growth Strategy:

Vodafone has taken multiple steps to ensure costs are minimized while excelling
customer satisfaction. Some of these steps are:

TOBi Chatbot: AI framework driven chatbot that has all but eliminated the needs of
call centres. This delivers efficient complaint management at scale.

MyVodafone app: Customers can change and even exchange between all types of
products offering through the app eliminating the need for service centres entirely.

Vodafone Intelligent Solutions (VOIS): Centralized processing information and

management system for all its service centres minimize the manpower required to
operate these service centres.

Vantage Tower IPO: Vodafone was able to sell some of its position on Vantage
Towers a telephone tower management company. This was done solely with the
intention of providing better value for the investors.

Vertical and Horizontal Strategy:

Vertical: Vodafone has decreased its suppliers from 11,000 across the world to
10,500 across the work and the CEO has promised to streamline the processes even
further.

Horizontal: A push towards better internet and ISP services instead of the core
mobile network services is currently one of Vodafone’s key strategies.

Business level Strategy:

Strategy is basically a plan of action for an efficient result. 

More generally, strategic management is a broad term that includes determining the
mission and objective of the organization in the context of its external and internal
environments (Emerson Wagner Mainardes, 2014)
Business level strategies are specifically designed for a company to gain a
competitive edge. To leverage a company’s skills it must follow an effective
business-level strategy for maximum customer satisfaction. To survive in the
competitive market businesses, have to have something different to convince
customers to spend their money and time on their products. Thus, every company’s
business-level strategy has to be unique and difficult to imitate. 

Cost leadership strategy: This follows a strategy of reducing the production cost
compared to its competitors. Most people tend to choose the same sort of service
that is low in cost compared to other ones. Thus, companies must try to keep their
market price close to the average and attract a large number of customers. Attracting
clients by lowering the market price through offers, deals, and sales are ancient
strategies. Telecommunication companies like Vodafone are no exception to this.
From the beginning of telecommunication, they have provided various offers and
packages to lower the cost of calls and texts. It mainly targets the average earning
population to increase its customers, by adopting a cost leadership strategy.
Recently it has provided low-cost calls on off-peak calls. 

Differentiation: As the name suggests, this strategy tries to make a business

somewhat different from its competitors. 

Product differentiation is important because it creates barriers to entry, protection

against imitation, and customer loyalty (Dirk Michael Boehe, 2010)

Vodafone tries to understand its customers' interests and requirements and

adoptions quick innovative moves to satisfy their targeted consumers. Consumers’
requirements change over time. Vodafone, with its worldwide strong image and
brand, has earned customer loyalty by adapting to their ever-changing needs from
the service. 

Final Recommendation:
Vodafone has a lot of investments in tech however those are with third parties that
creates technologies that may be imitated by competitors. Chatbot and internal
management systems are nothing new and its new direction towards IoT faces
significant challenges as Tesla will likely move to starlink internet when its operational
and Google Home will move to Google Fibre. So, Vodafone needs to generate in -
house frontier tech that focuses on sustainability over short term profits.

Newer trends in tech focuses on Biotech. Vodafone can look into NFC micro-
chipping people for their M-Pesa brand as a sustainable source of brand goodwill.
Other cyber-physical systems such as wearables and Artificial General Intelligence
(AGIs) need in house development.

So, I recommend that Vodafone needs to develop their tech in house.

Let’s look at the SAF Model

Suitability: As the goal of Vodafone is” The new generation connectivity and digital
services provider for Europe & Africa, enabling an inclusive & sustainable digital
society”. Its imperative that these innovation are patented and exclusive to Vodafone
in the long run. So, we see that internal tech development is solves the problem at
hand.

Acceptability: Considering the provided corporate level and business level strategies,
its already seen a strong focus on tech is present. The company just needs to make it
even stronger. Financial returns are not going to be any different than the current
strategy, but the company is much less likely to be blindsided by another company
with better tech.

Feasibility: The cashflow Vodafone generates from M-pesa the fintech subsidiary in
Africa is a significant part of Vodafone today. Sagentia, a software farm developed
the system back in 2007. Within years this revolutionary idea of using non-internet
or USSD based fintech caught on to other companies namely bKash, Asia’s largest
fintech in terms of subscribers, who’s CEO named Sagentia as one of the companies
behind the early days of bKash. Vodafone needs to protect its technology assets as it
does its customers. Considering the financial position of the company, the strategy is
considered feasible.
5-year plan for ensuring growth:
The 5-year technology development plan should include standard Agile Methodology
for tech development as provided as follows:
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