Strategic Analysis Report Sample

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Introduction Strategic Analysis Report Sample

A strategy is a concept that mainly deals in the formulation of goals and objectives that further helps in taking action to achieve that goal with effective utilization of resources within the organization (Jain and Li, 2018). The current report reflects on Vodafone Companythat was established in the year 1991. It provides various products such as internet television, broadband, mobile phone, digital television etc. The firmoffers its services in many countries like Europe, Asia, Africa and also ranked 4thin providing effective services to the customers (Vodafone, 2020). It has networks in 25 countries and along with this; it has partner networks within 47 countries. Vodafone works under the telecommunication industry. The report highlights external and internal along with the core competencies of the selected firm in order to know about the real capabilities of the organization.

Analysis

1. Analysis of external factors

Pestle Analysis

Political factors

It has been identified that Vodafone is facing intense competition in countries like Spain and Italy. In addition to this, the company also faces certain pressure in South Africa. By taking into account all these problems Vodafone still developed its growth as providing effective services to customers and earn revenue by 0.3% (mbaskool, 2020). Further, in the year 2018 in Qatar Vodafone was sold to Qatar foundation that was a joint venture between Qatar Foundation and Vodafone. In the previous year, the sale of the company declined due to low financing in the UK. It has been observed that in Germany Company has significant growth but due to low profits in Spain and Italy, its performance gets declined.

Economic factors

Vodafone growth has a greater impact through the recession in the year 2019 as customers are not buying its services and this affects the sale of the company. It has been found that to deal with this problem company has brought change in its policy according to recession so as to attract customers towards it. Apart from this, in Mexico, advanced telecom technology is introduced that creates competition among different local telecom service provider and Vodafone. For adopting new technology high investment is required so this influence profitability of the company. In addition to this, a rise in inflation rate also affects buying behavior and it further decreases the sale of product and services of Vodafone.

Social factors

Change in demand and preference of consumer has a greater impact on the sale and profit of Vodafone. In addition to this, change in lifestyle also influences the financial health of the company. It has been evaluated that there is a growing demand for the internet in the present era so consumer prefers fast internet services (Papulova and Gazova, 2016). There is a growth of demand for use of the internet in the market so this affectsthe business operation of Vodafone. In-country like Mexico customer lifestyle changes frequently as they prefer advanced technology and high-speed internet so it’s difficult for Vodafone to adopt technology at a short interval of time.

Technological factors

It has been found that the adoption of advanced technology in a regular interval affects the operational cost of the Vodafone as it is not easy for a company to switch to new technology. Apart from this, Vodafone has introduced its own application named as My Vodafone app has successfully implemented and it further supports in developing customer relationship (Krylov, 2016). It has been evaluated in most of the mobile phones there is an option for GPS so Vodafone also provides this feature in its mobile phones but it lacks in providing navigation system because it requires high price so this is one of the issues that affect Vodafone growth.

Legal factors

Vodafone works in the business environment that has some sort of legal formalities to carry out its operational activity in an effective manner. It has been observed that the company ensures laws and regulations before providing its product and service in the marketplace. This supports in avoiding unnecessary problem due to legal aspects within the country. At the same time, Vodafone manufactures and sold its product and service by considering legal factors that influence the operational activity of the firm.

Environmental factors

It has been identified that Vodafone believes that it is important for telecom companies to connect people with each other at the international level (Hall and et. al 2016). On the other hand, the company also aims in improving environmental influence by reducing it by 50% by the year 2025. In addition to this, for saving environment Vodafone has adopted renewable sources to provide its services to the customers. Along with this, it emphasizes on reducing wastage of networks that further supports in enhancing growth and demand of data by consumers also increase. Further, change in weather condition influence transportation of product such as mobile phones, television from one country to another.

Moreover, it can be concluded that Vodafone faced competition in the market like Spain and Italy so this affects the productivity of the firm as it is considered as a threat (Breja, et. al., 2016). On the other side, a technological factor is an opportunity for the company to expand its product and service through advanced technology. Further, the economic factor is also a threatas it affects the sale of Vodafone. The environmental factor is an opportunity as adopt renewable sources that support in enhancing sustainability within the firm. Legal factor is a threat for the selected brand to carry out the business operation within the country. Lastly, social factor is an opportunity for the company to grow and in the market through a change in the lifestyle of the consumer.

Figure 1:Pestle analysis

(Source: Alexander green, 2020)

Porter Five Force

Bargaining power of the buyer

There is the high bargaining power of buyer in Vodafone due to presence of many competitors in the market such as Telefonica, AT&T, and BT etc. It has been evaluated that the high bargaining power of buyer decreases the price of product and service offered by the company to the customers (Liu, Nie and Yuan, 2019). This helps in reducing the sale and profits of the firm due to a lack of providing differentiated product in the market. In addition to this, it aims to earn profits while compared to its competitor. Apart from this, it has been identified that Vodafone tries to bring new product in the market on a frequent basis so this supports in limit buyers bargaining power in the marketplace.

Bargaining power of supplier

The bargaining power of supplier is highas it carries out business operation by earning higher margins while compared with its competitors in the market. Furthermore, Vodafone has a larger share in the market so it is easy for the firm to deal with suppliers at any price in the market that can be more than competitors. In addition to this, it is also easy for Vodafone to maintain a lower price with suppliers that supports in earning profits on a continual basis (Jasiulewicz-Kaczmarek and Stachowiak, 2016). Apart from this, higher supplier power also has a greater impact on profitability under wireless communication. On the other hand, there are dominant suppliers in the market that decrease the margin of Vodafone from the market.

Threat of substitute

Vodafone has a moderate threat from the substitute product and service sell in the market by other competitors. It has been observed that services like landline and CDMA are declining and there is a rise in broadband services in the market. Substitutes for mobile services are email, social networking, Messenger that create a greater impact on the operational activity of the selected organization. It has been observed that Vodafone has high bargaining power of buyer so it did not have to provide a substitute to consumers within the market.

The threat of new entrant

The threat of new entrant is low due to barriers of a new entry in the market. It has been identified that while entering into telecom industry new firm has to pay higher licensing fees along with adopting regulatory frameworks that are associated with the business (Breja and et. al 2016). In addition to this, while entering into telecom sector at the time of setting up of infrastructure require huge cost and it is also difficult for a new entrant to adopt advanced technology rapidly. On the other side, it is easy for Vodafone to enter into new markets by developing efficiency within its services.

Competitive rivalry

There is a highrivalry of competitors that are faced by Vodafone in the market as they are providing low call rates to the customers. In addition to this, the selected brand competitors provide innovative service and products that support in attracting a larger customer base. On the contrary, Vodafone for attracting customers have to provide advanced services so that it can be able to meet their demand and expectation from the company.

2. Internal analysis

There are mainly five resources used by Vodafone in carry out its business operation such as human, technical, physical, natural and economic resources. It is important for the selected organization to cater effective utilization of these resources so that it supports in achieving productivity as well as profitability in the business.

Human resource is considered as an essential resource implement within Vodafone for hiring and recruiting new employee for the vacant position in the business. It plays a vital role in recruiting talented employee for the selected brand. It has been observed that through human resource Vodafone can be able to carry out its business operation smoothly (Gander, 2017). It is necessary for the selected organization to hire right employee so that it supports in achieving higher productivity and enhance growth in the market. It can be concluded as it is strengthfor Vodafone to attract new talent for the company.

Moreover, physical resources are equally important for Vodafone to carry out its operational activity. In this case, different equipment’s are used by the company such as mobile phones, pagers and routers, local area networks, private switches all these are considered as physical resource for Vodafone to carry out its business activities. These resources are important for telecom industry to carry out operational activity and serve quality services to customers in the market. It can be concluded that physical resources is a weakness for Vodafone as it did not have enough physical resources that helps in meeting customer demand and expectation in the market.

In addition to this, technical resourcesare considered as intangible resources within Vodafone that involve skill and experience of employee, patent and license of software etc. It has been evaluated that selected organization has license and patent right to sell its product and servicein the market (Gasparian and et. al 2018). It is strength for Vodafone to provide effective product and service to customers as if technical resources are strong then it helps in achieving higher profits.

Further, natural resources are also necessary for Vodafone to carry out its business operation as water, soil, land that are important for setting up an infrastructure by the company. It is also strength for the selected organization to set up its business at preferable location in the country.

Lastly, economic resources play a crucial role in the manufacturing of product under Vodafone as it mainly emphasize on labor, capital that is considered as an important factor for the company to enhance production. These resources are also strength for Vodafone to cater various needs and expectation of customers.

Value Chain model

Activities

Description

Primary activities

· Operations

· Marketing and sales

· Services

· It has been identified that Vodafone provide various services to its customers. In addition to this, it also carry out manufacturing process so as to develop mobile phones and television. Apart from this, competence of Vodafone under operations is availabilty of equipment and maintenance of product by the company.

· Vodafone has adopted various promotional actvities, advertising, channel selection etc. for promoting its service. In addition to this, company also uses marketing funnel approach for carry out sale activities within in the business (Akçura and Ozdemir, 2017). Adopting of effective promotional strategy is a competence for the selected brand that supports in enhancing sale.

· Vodafone provides both pre-sale and post-sale service to its customers that helps in maintaining customer loyalty. Apart from this, Word of mouth sometimes infleunce brand reputation in the market. Customer loyalty is considered as a competence for Vodafone as provide services in the marketplace.

Secondary activities

· Human resource management

· Technology

· In Vodafone various aspects related with HR are taken into account as training and development, performance management, recruiting etc (Liu, Nie and Yuan, 2019). These HR actvities within the selected brand supports in decreasing presssure on employees to perform better in the organization. Here, competence of Vodafone is adoption of effective HR practices within the organziation that helps in improve performance of the company.

· Vodafone adopt advanced technology to meet its customer demand and expectation in the market (Jasiulewicz-Kaczmarek and Stachowiak, 2016). Various softwares are adopted by the business such as automation,customer service and data analytics that supports in serve quality product and services to the customer. In this case, technological integration is a competence for Vodafone to provide effective services in the marketplace.

VRIO analysis

Activities

Description

Valuable

In Vodafone there are many resources valuable to the company such as financial, human, technical etc. All these are considered as valuable resources for the selected brand. In addition to this, patent right is also valuable as it helps in sell product and services in competitive market (Krylov, 2016). It has been observed that for Vodafone distribution network is considered as more valuable resources that supports in earning higher revenue to the firm.

Rare

It has been evaluated that for Vodafone employees are considered as rare resource. This is because it is difficult to get skilled and talented employee for the firm. In addition to this, patents are also rare resource that is identified with the help of VRIO analysis as patents are not easily available to the companies for carry out its business operation in the market.

Imitable

For the other brands operating in the market it is difficult task to imitate the resource. The main reason is that in case of technology and expertise that is possessed by Vodafone it cannot be implemented easily by other companies. In case of other resource like employee they are also imitable.

Organization

Vodafone focus on organizing financial resources of the company that are used for carry out further investment at the right place along with enhancing opportunities (Jain and Li, 2018). Apart from this, distribution network is also organized by the selected brand for reaching out larger customer base in the market.

3. Evaluation of strategy

Suitability

TOWS matrix

Strengths

· Vodafone has effective human resource

· It also has technical and economic resources

Weakness

· Vodafone does not have effective physical resources

Opportunities

· Adoption of new technology is considered as an opportunity for Vodafone.

· To adopt renewable sources for manufacturing and developing of product and service.

(SO) Strength opportunities

· With the help of effective human resource Vodafone can be able to implement advanced technology in the business(Hall and et. al 2016)

· Through technical and economic resources company can be able to enhance sustainability by adopting renewable resources 

(WO) Weakness opportunities

· Through adopting new technology the selected organization can be able to enhance its physical resources

Threats

· Vodafone faced stiff competition that influence business activities

· Legal laws and regulation within different countries (Dandage, Mantha and Rane, 2019)

(ST) Strength threats

· Vodafone has talented and skilled employees that help in beating competition within the market.

· Through technical resources laws and regulations can be easily accepted by the company

(WT) Weakness threats

· Through increasing competition in the market (Gander, 2017)

Acceptability

Power

High

Low

Interest

Low

High

It has been identified that there are different groups of stakeholders that are involved with Vodafone business operation such as employees, managers, customers, suppliers, government and experts etc (Gasparian and et. al 2018). From the above matrix, it has been observed that three groups selected for evaluation of strategy adopted by the selected brand are customers, investors and managers for the development of the market as a strategy adopted by the firm to enhance its market share. In implementing this strategy customers play a vital role in building a brand image as well as increase the profits of the firm. It has been observed that customers are the most important element for the selected organization that supports in increasing sale of the company.

Moreover, it has been found that customers get influence from the strategy at the time of market development Vodafone ensure different activities in the market. Customers have high interest but low power in the business according to the stakeholder analysis. Vodafone strategy is adopted by customers of the company (Papulova and Gazova, 2016). On the contrary, an investor has low interest and high power within the selected brand. They are satisfied with the strategy adopted by the company for further expansion. This strategy has a greater impact on the motivation of investors while investing money in the company. Here, investors also accept market development strategy of Vodafone. Lastly, managers have a high interest as well as high power for governing business activities. They take a decision for the company and strategy adopted by Vodafone influence the success of the project in the organization. This strategy is acceptable to managers of the company.

Feasibility

The strategy will be implemented by Vodafone into the company. It has been observed that skills and financial resources are required for a company to adopt a market development strategy. Financial resources will be obtained through investors and other stakeholders of the company (Lorchirachoonkul, Atthirawong and Leerojanaprapa, 2018). Therefore, all these factors help in determining the feasibility of a strategy implemented by Vodafone in the organization. Thus, with the help of SAF analysis market development strategy will be effectively implemented by the selected organization.

Core competence

One of the core competences of Vodafone is adoption of effective HR practices in the business. It has been identified that in the present scenario HR practices plays a vital role in improving performance of employee working in the organization. In addition to this, it also supports in gaining competitive advantage in the market. Apart from this, different practices carried out in Vodafone for retaining employees for the longer term. Recruitment, performance management, training and development etc. are some HR practices that take place in the selected organization. This activity is good for Vodafone to improve its productivity as well as performance (Espinoza and Ukleja, 2016). With the help of this activity the selected brand can also enhance employee satisfaction and morale that further helps in building effective relationship between them.

Moreover, VRIO analysis is also important for customers as valuable resources include financial, human that are necessary for Vodafone to carry out business operation. In addition to this, if the selected brand has adequate resources then it supports in providing valuable services to customers in the market (Eizaguirre, García-Feijoo and Laka, 2019). Apart from this, some resources are rare for Vodafone such as skilled employees and patent right so if the selected organization did not have good employees then it did not be able to provide effective services to customers. On the other side, for customers it is not possible to adapt advanced technology in short period of time as its difficult for them to imitate at faster pace.

Conclusion

It can be presented from the above research that external factors have greater impact on the operational activity of Vodafone. In addition to this, it has been identified from the external analysis that technological factor is considered as an opportunity for the firm and economic factor treated as threat. With the help of porter’s five force model different factors analyzed that has high, moderate and low impact on the business activities. Further, through internal analysis different resources are identified that supports in carry out business operation of the selected organization. Apart from this, value chain analysis and VRIO is implemented into the business for evaluating competence of Vodafone. Lastly, SAF model is applied for evaluation of effectiveness of strategy implemented by the selected organization.

References

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  • Alexander green. Pestle analysis. [Online]. Available through<https://www.ibisworld.com/industry-insider/how-to-use-industry-research/how-to-use-ibisworld-research-in-a-pestle-analysis/>. [Accessed on 17th July, 2020]
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  • Dandage, R.V., Mantha, S.S. and Rane, S.B., 2019. Strategy development using TOWS matrix for international project risk management based on prioritization of risk categories. International Journal of Managing Projects in Business.
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  • Lorchirachoonkul, V., Atthirawong, W. and Leerojanaprapa, K., 2018. SWOT and TOWS Matrix Analysis for Strategic Development to Increase Thai-Laos Silk Supply Chain Efficiency. WMS Journal of Management7(3), pp.15-26.
  • mbaskool, 2020. Vodafone Pestle analysis. [Online]. Available through<https://www.mbaskool.com/pestle-analysis/companies/17973-vodafone.html>. [Accessed on 17th July, 2020]
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Appendix

Core competence

Integration in technology is another competence of Vodafone that supports in beating competition in the marketplace. It has been observed that by adopting advanced technology by the selected brand helps in achieving higher profits as well as productivity. In addition to this, Vodafone implemented different software’s into the business that helps in carry out business activities in an effective manner. It adopts data analytics software that supports in provides quality services to customers in the market. With the help of technology communication between employees also improved within Vodafone that supports in building effective relationship between them. Through effective technology within Vodafone also provide security and safety from stolen of data and information from the company. Apart from this, Vodafone with the help of technology improves access towards suppliers present in the marketplace. Therefore, this is considered as a competence for the selected brand.

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