Professional Documents
Culture Documents
Introduction......................................................................................................................................4
Competitive analysis........................................................................................................................4
Internal analysis...............................................................................................................................9
External environment.....................................................................................................................15
Recommendations..........................................................................................................................19
Conclusion.....................................................................................................................................20
Reference list.................................................................................................................................22
List of figures
Figure 1: Market turnover of the larding audio-visual and telecommunication operators in Spain
in the time span of 2013 to 2021.....................................................................................................7
Figure 2: Smartphone users in Spain in the time period from 2018 to 2024...................................8
Figure 3: Value of the investment in the Spanish telecommunication sector starting from 2000 to
2021.................................................................................................................................................9
Figure 9: Allegation cases distribution against women riding in Spain in the time period of 2015
to 2019, by nationality as well as the type.....................................................................................18
1
List of tables
2
Introduction
Vodafone is a renowned UK-based telecom service provider operating in around 200 countries
across the globe. This significant company has been ruling the telecom industry and recently
gained around 45.579 billion euros in the financial year of 2022 (Statista.com, 2023). Vodafone
has also maintained its brand reputation by taking the advantage of its 8,760 employee strength
resulting in enabling itself to meet the market demands accordingly.
Competitive analysis
Force Assessment
(Reuters.com, 2023)
(Statista.com, 2023)
(Statista.com, 2023)
3
(Trade.gov, 2023)
(Budde.com.au, 2023)
(Source: Self-developed)
Analysis:
The above-mentioned table introduces the competitive analysis for Vodafone in the Spain
market. Based on the views of Pitsinki (2020), Porter’s five forces model helps to identify the
probable threats a company faces while exercising its business operations in the existing market
or likely to penetrate a new market. This significant model consists of five factors such as new
entrants’ threat threats relevant to substitute products, bargaining power of the buyers,
bargaining power of the suppliers and competitive rivalry. Therefore, the implementation of
Porter’s five forces has helped to evaluate the current condition and market threats in Spain
regarding the business activities of Vodafone.
Economic disturbance in a certain country often obstructs the market entrance of the potential
business venture willing to penetrate for accelerating their industrialisation procedure. Empirical
evidence cited by a recent report clearly indicates that Spain encountered a massive economic
crisis in the time span of 2008 to 2013 and its impact is still lingering on the national growth
(Royo and Royo). Based on this factor, many business organisations are most likely to avoid
Spain to avoid such negative consequences on their business progress resulting in creating low
threats regarding new market entrance. In addition to that, the telecom industry has witnessed
extreme losses due to the reduction in phone utilisation by consumers in Spain (Reuters.com,
4
2023). This particular case is also responsible for low threats regarding new market entrants in
the Spanish market resulting in befitting Vodafone to ensure its long-term sustainability in this
specific region efficiently.
One of the key components regarding Porter’s Five Forces model analysis is threats relevant to
substitute products. Based on the information collected from a recent study, the
telecommunications revenue in the Spanish market amounted to around 34.4 billion euros in the
financial year of 2021 (Statista.com, 2023). This significant factor clearly entails the favourable
business environment of the Spanish market for the telecom service providers resulting in the
development of moderate threats of substitute products. Apart from that, the annual revenue of
the communication services industry in Spain has been projected to increase by 3.37% in the
financial year of 2028 (Statista.com, 2023). This forecast has also called for a high threat of
substitute products. However, the unfavourable history of the economic crisis in the Spanish
market has somewhat decreased this particular threat from high to moderate.
The Spanish market seems to be ideal for telecom service providers to expand their business
ventures across the country resulting in developing moderate bargaining power of the suppliers.
As per the recent study, Movistar had reached up to around 14.5 billion euros as well as Orange
has ranked second in the Spain telecommunication industry attaining about 5.5 billion euros in
the financial year of 2021 (fig 2). Vodafone stood third by acquiring revenue of about 4.9 billion
euros in the same year. All of these factors basically imply that the supplier’s bargaining power
in the Spanish market is moderate inclining towards high resulting posing threats to the UK-
based telecom service provider, Vodafone.
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Figure 1: Market turnover of the larding audio-visual and telecommunication operators in
Spain in the time span of 2013 to 2021
The bargaining power of suppliers, threats of the new market entrances as well as substitute
products have a significant influence on the bargaining power of the buyers. In the highlights of
Disastra et al. (2019), an increase in mobile phone users simultaneously enhances the sales
volume of the telecommunication service market. A recent report claims that the number of
mobile phone users in Spain will grow by approximately 3 million to 40.33 million indicating
the favourable environment for the existing telecom service providers to expand their business
till 2024 (fig 2). In contrast, Spaniards happen to be conservative regarding their buying habits
due to which they do not seek service from any random telecom service providers (Trade.gov,
2023). As a result of this, the bargaining power of the buyers is moderate in Spain.
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Figure 2: Smartphone users in Spain in the time period from 2018 to 2024
Competitive rivalry
Numerous telecom service-providing companies are present in Spain such as Movistar, Orange
Spain, Másmóvil, MVNOs and many more (Budde.com.au, 2023). Moreover, the investment in
the Spanish telecommunication industry has surpassed around 7.5 billion euros which clearly
implies high market competition between the telecom service providers in order to increase their
sales volume by upgrading their business activities accordingly (fig 3). As a whole, high threats
from competitive rivalry have been implicated in the Spanish market through this particular
analysis.
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Figure 3: Value of the investment in the Spanish telecommunication sector starting from
2000 to 2021
Internal analysis
Core competencies-
Focusing on the core competencies helped the researcher identify the core value of the
organisations that define their strategic implications based on situational maturity. It can be
stated that the concerned organisation Vodafone mainly aimed to provide a better technological
experience to its consumer base which has mainly accelerated its position in this market
situation. Additionally, the organisation also demands to provide an engaging workplace for a
better environment for the employees (Jaseel, 2019). In accordance, the organisation also
claimed that they focus on high confidentiality and data security to provide an excellent service
to their consumer base.
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VRIO
(Source: Self-developed)
Analysis-
Internal analysis of the organisation has assisted the research to get a clear view of the existing
procedures of operational sustainability in this competitive marketing scenario. It has been
evaluated that the organisation has a valuable and rare brand image that has accelerated its
position in this competitive market (Peres, 2019). Based on the contradiction the organisation
was not able to maintain its effective leadership and employee management. The evidence has
shown that the employee number of the company has dropped to 4194 employees after the
Covid-19 outbreak whereas it was approximately 5140 in the year 2019 (Statista.com, 2023).
Additionally, the organisational reputation has also degraded due to the 1200 job cut (Phys.org,
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2023). The report also stated that the organisation has prolonged these issues along with their
cost-cutting financial strategies that forced them to face high criticism in this recent era.
According to Mashlow’s hierarchy theory, job security is one of the most important
requirements for employees (Barnes, 202). Based on the contradictory note, the organisation did
not abide by the requirement as it adopted the technique of job cutting for its own benefit. As an
impact, it affected their dedication and the employee base became immutable to the competitive
rivals. It signifies that the lack of leadership supervision in the organisation has seemed to be
affected due to inadequate employee management which requires an effective employee
retention strategy for further development.
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In a different context, the organisation also offers excellent services to their customers that are
highly valuable and rated. Additionally, this non-imitative and organised product based on
effective research and decision-making has insured the organisational growth in this
circumstantial competition. More to a similar context, the organisation also achieved illustrative
growth due to their effective research and development has helped the organisation to maximise
its sales and revenue in this recent era (Waithaka and Kimani, 2021). However, the organisation
has faced issues after the Covid-19 outbreak which has also been indulged with their
confidentiality issues. The report has stated that the organisation was not able to maintain the
confidentiality of the personal data of its consumer base which has highly affected its brand
reputation in this recent market (Edpb.europa.eu, 2023). The evidence highlighted that the
consistency of the market revenue in the worldwide market Vodafone has declined since the year
2016 (Statista.com, 2023). Moreover, the organisation also tried to maximise its worldwide sales
along with the Sapin revenue based on effective decision-making. It has also been identified that
the company has achieved approximately 4180 billion euros in the year 2022 whereas it was
almost 3904 billion euros after the Coronavirus outbreak (Statista.com, 2023). It signifies that
despite the customer engagement challenges and confidentiality errors the organisation has tried
to regain their position in this global market based on effective innovation and strategies.
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Particulates Sub-particulates Description
Effective warehousing.
Outbound
Scheduling.
logistics
Order processing
Competitive positioning.
Secondary activities: Firm
High-quality management.
Sustainable supportive infrastructure
Offering uniqueness.
resources
Training management.
HRM
Cost minimisation.
Motivational strategy.
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development
(Source: Self–developed)
Analysis:
Prior evidence has highlighted that despite claiming an engaging environment the organisation
was not able to keep their employee base rare in this competitive market scenario that may
impact its operational sustainability. More to the similar context, the report also reported that the
company has adopted the job cut due to cost management. However, the value chain analysis
defines that the organisation is highly required to improve their training management and cost
management strategy in their secondary activities to grab an exclusive competitive advantage. As
stated by Richey et al. (2022), the implication of effective operational policies related to the
primary activities is that the organisation becomes able to control inbound and outbound
logistics. As an impact, it may improve their demand and supply balance. Additionally, effective
operational sustainability is highly required to manage ethical practices within the workplace in
case of data confidentiality. Thus, it also assists the organisation to abide by their core
competencies. Furthermore, effective inbound and outbound logistics also might ensure a wide
product and service range that can help the organisation to improve its operational management
and prevent premature project failures (Lagorio et al. 2022). Hence, the concerned organisation
Vodafone also can speed up their revenue growth by improving its employee management
strategy, financial strategy, confidentiality management and others in this present market
situation.
External environment
One of the key issues a business organisation encounters is the high inflation rate in the country
they are operating. Vodafone is no exception when it comes to exercising its business operations
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in the Spanish market as the inflation rate in Spain was 8.83% in the financial year of 2022
(Statista.com, 2023). Due to this factor, the industries including the telecommunication sector
faced challenges in ensuring their existence in the national as well as the global market. Based on
the opinions of Ukwuoma (2019), inflation leads to shrinking profit margins for the
telecommunication industry as it slows down the rates of market growth. The rapid increase in
the inflation rate of the Spanish economy can be a potentially huge issue for Vodafone to
accelerate its business progress as well as maintain consistency in its financial growth
accordingly.
Environmental problems
Business organisations fall into trouble while executing their organisational activities in certain
regions due to environmental issues such as climate change, pollution and many more. Vodafone
is most likely to face negative consequences while accelerating business procedures in the
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Spanish market as 36% of respondents agreed that most of the environmental issues are due to
waste management and 33% agreed to air pollution (fig 8). In the current views of Smith (2022),
climate change often hampers the whole telecommunication service due to enhanced emergency
communications, disturbance in cable-provided facilities caused by storm-led damages, flooding
and many more. Spain is prone to climate change issues as per the majority of responses can act
as the major barrier in the organisational activities of UK-based telecom service provider,
Vodafone. In addition to that, Spain is known for being one of the most vulnerable EU countries
where climate change is unequivocal resulting in impacting the business organisations operating
in this market (Realinstitutoelcano.org, 2023). Vodafone needs to take immediate action in order
to overcome these significant environmental issues and ensure its long-term existence in the
Spanish market in the most proficient manner.
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Figure 8: Responses regarding environmental issues in Spain
Gender-based violence
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multinational companies. Vodafone is an international telecom-service provider with around
13.6 million Spanish subscribers. Based on this factor, this significant telecom organisation has
become the second biggest mobile operator in Spain resulting in increasing the reputation and
economic growth of Vodafone (5gobservatory.eu, 2023). However, the gender-violent country,
Spain appears to be detrimental for Vodafone in recruiting cross-border employees in order to
enhance its labour strength to flourish its business operations in Spain. Information collected
from a recent study basically depicts that the gender-violence rate is the highest out of other
violations against women, amounting to 65.7% and 75.1% in national and foreign cases
respectively in Spain (fig 9). Based on this factor, female employees would be frightened to join
the business venture, Vodafone in Spain resulting in impacting the organisation drastically and
restraining it to achieve the complete advantage of a diverse workforce.
Figure 9: Allegation cases distribution against women riding in Spain in the time period of
2015 to 2019, by nationality as well as the type
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Recommendations
The achievement of any business organisation depends on its labour force as well as its
consumer-centric approach resulting in a rapid increase in its sales growth. The UK-based
telecom service provider, Vodafone is currently dealing with a lot of challenges such as a decline
in employee numbers, lawsuit cases, competitive threats and environmental problems in the
Spanish market. According to Naisola-Ruiter (2022), a talent management programme helps a
company to recruit well-experienced and efficient employees which results in accomplishing the
desired business objectives swiftly. Therefore, implementation of this significant method can
help Vodafone to overcome its employee shortage issues resulting in maximising its
productivity which in return helps in meeting the consumer requirements accordingly. Thus,
Vodafone can also increase its sales growth resulting in combating the market competitive
threats in the most proficient manner.
The external environment of Spain has been quite detrimental for Vodafone which caused huge
losses and hampered its existing brand recognition significantly. Based on the gathered
information, Denmark is ideal for any business organisation for its competitive tax environment,
due to low business expenditures as well as favourable social security rates as compared to the
rest of European countries (Radner.dk, 2023). The corporate tax rate is also low, about only 22%
which can be also beneficial for Vodafone to open its new venture in the Denmark market.
Besides, the lower inflation rate of Denmark amounting to only 1.9% can also pave the way for
Vodafone to accelerate its business growth appropriately (Data.worldbank.org, 2023). Apart
from that, Denmark appears to be ideal for telecom organisations, as the turnover of this
significant sector is quite high. The turnover of Telenor As, HI3G Denmark ApS and others are
in the range of 3.78 to 1.73 billion Danish kroner indicating high competitive rivalry yet
favourable market conditions for Vodafone. In the views of Clapp (2019), firms are encouraged
by competition to reduce their own costs and manage their enterprises as efficiently as possible.
However, when competition is curtailed, such as when one company acquires most competitors
or reaches pricing agreements with other competitors, prices are likely to rise and quality is
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likely to decline. Based on these factors, Denmark can be a wise choice for Vodafone to
introduce its business venture and avoid the negative consequences that it has been facing in the
Spanish market as well as gain competitive advantages in an appropriate manner.
Conclusion
In conclusion, Vodafone is undoubtedly executing its business operations in the global market
efficiently, however, it has been facing challenges in the Spanish market for ensuring its long-
term sustainability. Employee job cuts, lawsuit cases, declined market sales and many more have
endangered the organisational existence of Vodafone in Spain. Along with that, Porter's five
forces model as well as Value Chain Analysis have assisted to understand its external
environmental problems. For instance, competitive threats, climate change issues, inflation and
others have hampered the financial growth of this particular UK-based telecom service provider
which required immediate precautions and action plans. VRIO framework analysis with the help
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of Maslow’s hierarchy theory also determined its inefficiency in employee engagement which
also calls for appropriate supervision. The beneficial market characteristics of Denmark appear
to be the fittest for Vodafone to not only combat its existing issues but also build proper
resilience for mitigating further mishaps faced in the Spanish market. Besides, the adoption of
the Talent management programme can also help in easing its employee stagnation problem
resulting in attaining an unbeatable position in the worldwide telecom industry market
proficiently.
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