Effective Business strategy Plans - Vodafone

The report will include critical analysis of macro environment. It will have focus on determining the changes in external factors influence management decisions. There will various models such as PESTLE and SWOT analysis will be used for addressing the changes which might takes place internally or externally.

TASK 1

Analysing the way macro environment and the way it determines Vodafone strategic management decisions.

Vodafone is a British multinational company which has its headquarter in London. Business entity has achieved fourth position in context of number of customers. An organisation has its own networks in more than 25 countries. Vodafone company provides both telecommunication as well as It related services in 150 countries.

Mission, Vision and Objectives of Vodafone company.

Missions: Vodafone mission is to deliver high value to its customers. It also intends to provide high return to shareholders. The mission of an organisation is to enhance lives of customers by providing them unique power of mobile communication services. Business entity mission is to gain customer loyalty.

Vision: The vision of an enterprise is to achieve leadership position in telecommunication industry.

Objectives: primary objective of Vodafone is to earn high profit. Other purpose of an enterprise is to expand business operations globally.

Definition of strategy

Strategy can be defined as plan of action which is designed to achieve long term business goals or objectives. It can also refer to as direction set for an organisation to accomplish desired state in the future. Manager in Critically evaluating the organisation internal environment and its capabilities (Grant and et.al., 2014). Manager in Vodafone organization should formulate an effective strategy as this will assist them in dealing with uncertain situations.

Role of strategy to achieve business objectives:

Strategies plays crucial role in driving firm towards achievement of desired objectives. An effective strategy supports business entity in eliminating the barriers which might occur in accomplishing desired targets. It helps in identifying the activities which are required to be executed in order to achieve desired targets. Planning of strategy also assist management in determining the amount of resources which will be required for executing various activities. It also helps in ensuring proper utilisation of resources.

The characteristics of strategic decizions , directions of your chosen company.

The important characteristics is that all the decisions are made by the manager considering the market as well as changes in external factors in business environment. Strategic decisions taken by the management has assisted an organisation in improving performance. Companies strategic objectives are clean, an organisation intends to cater the needs of customers. Strategic approach of company is completed based on the to issues like privacy and content builds trust and grows our customer base in mature markets. In addition to this, This strategy is based on our assessment of the key CR-related opportunities and risks for business.

Different strategic planning techniques

Strategic planning can be defined as a procedure of establishing mission, objectives and then formulating as well as implementing strategies to achieve desired targets. Strategic planning techniques supports management in making suitable business decisions. The different types of strategic planning tools and techniques are:

Market research: It is defined as procedure of accumulating information about specific market such as demands of customers, presence of competitors etc. Manager in Vodafone company should execute research at regular interval of time, as this strategy will assist business entity in exploring the growth opportunities. It will also help organisation in providing high level of satisfaction tri customer (Heyden Kavadis and Neuman, 2017). Utilisation of technique will assist manager in an organisation in taking decisions related to product development.

Cost benefit analysis: it is considered to be as decision making tool which is used by manager in an enterprise for assessing the costs as well as benefits associated with taking specific actions. The purpose of this analysis is to support management in selecting an appropriate course of action. It is required by manager in Vodafone company to use this tool for assessing the cost or benefit associated with selecting particular project for investment’s this technique will support business entity in gaining high rate of return on investment.

1. PESTLE analysis: It is considered to be as effective techniques which is used by an organisation for analysing the way different factor in internal and external environment influence strategic plan. Manager in Vodafone should conduct PESTLE analysis, as this activity will assist company in making an appropriate plan for dealing with changes.
2. Political factors: It includes rules and regulation, political situation in the country etc. Changes in political factors have direct effect on the decision made by top level management in a company. For instance, Brexit has negative effect on telecom industry. Political parties have restricted the exports which has led to decline in sales and profitability of companies operating in telecom sector. This factor has great effect on the business strategy and expansion plan. Analysis of Changes in political factor has encouraged manager in Vodafone to identify new ways of increasing sales as well as profitability in domestic market.
3. Economic factors: Changes in the economic factors such as exchange rate, increase in tax rate, inflation in process of products or services have direct influence on the management decisions. It is required by manager in Vodafone to keep update themselves with such types of changes in economic components, as this will assist management in making an appropriate decision. Analysis of Changes in this variables supports management in determining the new ways through which new sources of revenue can be generated or profitability can be increased.
4. Social factors: It includes changes in trends, taste and preference of customers in the market. Manger in Vodafone should require to have knowledge about such types of changes, as this strategy will support management in making an appropriate decision related to product development. Social changes have direct as well as significant influence on product planning and also on other operational decisions as well as activities. Analysis of changes in this factor will support Vodafone in identifying the target market as well as customer group (Dayan, Heisi and Matos, 2017).
5. Technological factors: This is considered to be as supporting variable which assist an organisation in improving quality of products and enables business entity to deliver additional services to customers. It is required by manager in Vodafone company to take decision related to embraced smartphone app development, as this strategy will help firm in gaining competitive advantage in the market.
6. Legal factors: Changes in laws and regulations has direct as well as significant effect on human resource management decisions and practices. Changes in employment law helps management in determining the salaries and wages of workers.
7. Environmental factors: It include climate change, increase in competition in an industry etc. This factors have direct effect on business plan and strategies adopted by management for dealing with intense competition. It also supports management in identifying the level of competition.

Business Growth options:

Ansoff’s growth vector matrix: It is considered to be as an effective strategy which can be used by manager in Vodafone company for exploring growth opportunities. Ansoff’s growth vector matrix helps management in determining the marketing strategy which an enterprise must use to foster growth. It profits firm a road map which will help business entity in fostering growth (Leonidou and et.al., 2017). There are mainly four strategies which can be used by Vodafone company these are:

Market penetration: This strategy is adopted by an organisation for promoting existing goods or services in new way. Market penetration strategy involves low risk. This strategy has been suggested to Vodafone as it will help business entity in increasing market share. It will also help an organisation in improving promotional activities.

Market development: By utilising this strategy, Vodafone can enter into new marking with its existing products or services. It is required by manager in Vodafone to align an organisation core competency with products rather than the markets.

Product development: This strategy can be used by Vodafone for launching new products or services in existing market. It is considered to be as an effective strategy for attracting new customers.

Diversification: Vodafone can use this strategy for launching innovative product or services in new market. This strategy involves high risk.

Show results for example: impact, market share, profitability, what do customers value most, market share of the company in the market industry.

Vodafone has capture approx., 21 percent of market share. Change in the legislations have great effect on the business of Vodafone. In addition to this , environmental variables have great influence on the services provided by Vodafone. Business entity in Indian market has generated profit of approx. 9805 crorer During the financial year 2017-2018. In addition to this,Vodafone India with 211 million and Idea Cellular with 196.2 million users will become the largest telecom operator when they officially combine their operations in 2018. Employees are dedicated towards their work and they are provided training related to the way they should behave with clients.

TASK 2

Critically evaluating the organisation internal environment and its capabilities.

Strategic capabilities

1. VRIN analysis: It is considered to be as an effective tool which can be used for analysing the internal capabilities of an organisation. Internal capabilities are required for dealing with competitions and providing an appropriate response to changes in external environment.

Value: Vodafone company have limited, valuable as well an expensive resource which has enabled business entity to exploit an environmental opportunity. These valuable resources have supported an organization in reducing the negative effect of changes in external factors on business operations (Raghunath and Rose, 2017).

Rarity: As the Vodafone has expensive resources, it is not rare, as most of its competitors have same resources. All the resources used by Vodafone are imported from other countries. Resources used by Vodafone of high quality a unique.

Imitability: Resources used by Vodafone has assisted firm in gaining the cost advantage. It has helped enterprise in bringing improvement in quality of products and services. These resources have enabled business entity to produce innovative products and helped an organization in delivering high value as well as satisfaction to customer in their market.

Financial resources: Vodafone raise financial resources by selling its own securities. Business entity can also raise funds from external sources, as they have good brand name and credit rating in the market.

Physical assets: Example of these types of resources are building, plants, equipment and machineries. As Vodafone company is operating business at international level, business entity has offices and retail outlets at different locations. Vodafone is considered to be as one of the largest mobile operators in the world, as firm has 263,400 mobile base stations.

Human resource: Vodafone main objective is to provide high level of satisfaction to its employees. An organist ion offers development opportunities to all its workers. Human resource management in Vodafone consists of highly talented and skilled employees.

Brand: Vodafone company has valuable brand name. Company has been successful in generating brad awareness both domestically and globally.

Vodafone has been successful in reducing the cost of operations. The standardization strategy has assisted an organization in minimizing the cost and ensuring an effective as well as efficient utilization of resources. Vodafone in order to reduce cost has entered into different infrastructure sharing contracts with other organization operating in same industry, as this strategy will support business an enterprise in minimizing cost (Madsen and Walker, 2015). Business entity is adopting technology for increasing working efficiency. In addition to this Vodafone company has innovation skills which has enabled an enterprise to differentiate their product or services from that of competitors. Innovation strategy has helped Vodafone in achieving leading position and helped company in gaining competitive advantage in the market (Rai, 2018.). Successful Launch of the mobile money transfer solution has enabled business entity to become market leader.

2. Swot analysis: It is considered to be an effective tool which can be used by manager for analyzing the strength, weakness, opportunities and threats.

TASK 3

Devising some appropriate strategies for improving the companies competitive edge in the market 

Porters five forces model: It is considered to be as an effective tool which assist management in analysing effectiveness of an industry in which company is operating. Porter five force model also helps an organisation in analysing the way the different variables can affect their profitability. Development of understanding about the components which might effect business performance is important in context of developing an appropriate plan. In addition to this porters five forces model also assists management in identifying suitable ways of gaining competitive advantage in the market (Lasserre, 2017).

Threat of new entrant: As telecommunication is not big, small or big companies can easily enter into market with innovative products or services. The launch of new products or services by new companies can have negative effect in the sales and profitability of Vodafone. It is required by Vodafone to adopt the low cost pricing strategy as this will help business entity in reducing this threat. It required by Vodafone to make investment in research and development. Vodafone should use its innovation skills for developing new product, s this strategy will help an organisation in gaining competitive advantage in the market (Lee and Bach, 2017). It will also support an organisation in attracting more number of customers. Competition is considered to be as good for an organisation , as it encourages facilitating innovation.

Threat of rivalries among existing firm: There is intense competition in telecommunication industry. The decrease in prices by rivalries firm can have negative effect on profit margins of Vodafone. As business entity is operating business worldwide, Vodafone has to face intense competition from both domestic as well as international corporations. By building a sustainable differentiation can reduce the impact of competition on its business operations. The positive effect of this threat is that it positively influences an organization to bring improvement in business system as well as procedure.

Threat of substitute: threat of substitute is high in telecom industry. Business entity need to concentrate in delivering high value proposition, as this tactic will support firm in maintaining its position in an industry. This strategy will also support an enterprise in making itself different from competitors. It is required by Vodafone to adopt the service oriented approach (Fontana, Sastre-Merino and Baca, 2017). This factor encourages firm to concentrate on the quality of products as well as services.

Bargaining power of buyers: Companies and an individual are the two types of customers those who buys products or services offered by firms in telecom sector. Bargaining power of customers is largely based on switching cost which is further dependent on the nation in which an individual is residing. Buying power of an individual customer is low. In addition to this, bargaining power of corporate buyer is high (Jain and Ahuja, 2017). Losing a single corporate buyer might have great as well as negative effect on sales as well as profitability of company.

It is required by Vodafone company to concentrate on quality of products, as this strategy will assist an enterprise in reducing bargaining power of customers. As people are ready to pay high prices for good or premium quality products.

Bargaining power of suppliers: There has been decrease in the bargaining power of suppliers. The negotiation power of Vodafone has strengthened by its centralized strategic procurement unit. By building efficient supply chain with multiple supplier, Vodafone can reduce this threat and can gain competitive advantage.

Mergers and Aquisitions

Vodafone has merged with Idea both telcos decided to merge themselves after their existence was threatened by the newcomer Reliance Jio. Both companies are planning to to change their positioning strategy for attracting more customers. In addition to this, Vodafone has successfully acquire Kabel Deutschland for 7.7 billion Euros . In addition to this, an organisation also has acquired Mannesmann in Germany for a record figure of £112bn.

The experts offer thesis help US to support them. Here are a few mistakes highlighted by professionals so that they shall not lose marks and be particular about avoiding them.

Stakeholder analysis

Stakeholder analysis is defined as the procedure of assessing system as well as changes.it is considered to be as an important technique which assist management in identifying the key stakeholders and their needs. It is very important for Vodafone to concentrate on fulfilling the need of their employees as they are important stakeholders those who will drive firm towards success and growth. Investors are also important people who will help an organisation in expanding business. Both employees and investors are interested in knowing the revenue earned by the company in specific financial year (Huang Huang and Hsieh,, 2017). As investors decisions related to the continuity of investment is highly influenced by the financial performance of an organisation. Customer are crucial for business, as it helps an enterprise in generating profitability. It is required by Vodafone company to concentrate on meeting the expectation of employees and to provide high level of satisfaction to customers, as this strategy will assist organisation in increasing sustainability.

TASK 4

Producing a strategic management plan for an organisation

Applying porter’s generic strategies

Cost and price leadership: Vodafone can use this strategy as this will help an enterprise in gaining competitive advantage. Business entity by offering products or services at low cost can attract customers. This strategy will help an enterprise in increasing sales and profitability. It is required by company to adopt the latest technology, as this strategy will support firm in reducing the cost and will enable them to deliver products or service at lower price to customers.

Differentiation strategy: this strategy will help firm in gaining competitive advantage. Vodafone is planning to develop new products such as new mobile application. It is also planning to deliver unique combination of services to its customers.

Hybrid strategies: Vodafone company is planning for launching an IPTV service based around a hybrid set-top box in Germany and Spain. Companies IPTV offering will lie on top of this in the form of linear channels and video-on-demand. By adopting the hybrid strategy an organization can enter into new market (Barman and Sengupta, 2017). This strategy will also support an enterprise in reducing the effect of competition on its business performance.

Diversification: Vodafone company is planning to diversify its product line. An organisation is planning to explore new fields such as IT and mobile payment. The purpose of an organisation is top foster market growth.

Vertical integration: Vodafone is planning to expand business operations in following industries these are: hardware, telecoms, software and analytics, and professional services. Business entity is planning to form strategic partnership with companies operating in these sector, as this will help firm in gaining competitive advantage.

Bowman’s Strategies.

management plans and give some examples of tangible./tactical/strategic priorities/objective that the firm has chosen for the next 1, 2 years or more.

Hybrid strategy: Vodafone company is planning to launch hybrid set box mainly in two market these are Germany and Spain. It is considered to be as Vodafone TV service strategy.By introducing services oriented around a hybrid STB, Vodafone can enter a market without the need to compete directly with incumbent operators. As this strategy will assist an enterprise in expanding their broadband business.

Segment specific: Vodafone is planning to offer products or service to mass market, specially to those customers group those who don't have children.

Cost leader: As per this strategy, Vodafone has planned to offer services at low cost to only specific market segment. This strategy will assist an organisation in gaining competitive advantage.

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CONCLUSION

It has been concluded from the report that changes in internal as well as external factors have direct and great influence on business operations. Study has also concluded that strategy act as road map which supports an organization in accomplishing business goals and objectives. It has been concluded from assignment is that strategic planning is important for smooth functioning of business. Report has also concluded that innovation strategy can assist firm in gaining the competitive advantage in the market. In addition to this, it has been concluded that valuable and huge amount of resources are required for formulating as well as implementing strategies. Product and market development is considered to be an effective strategy which can be used by an enterprise for fostering growth.

Some strategies have been suggested which can be used by an organization, as it will assist business entity in improving competitive edge.