Position of Vodafone in International Markets

analytical Essay
2887 words
2887 words

Introduction The following report will analyse Vodafone and their current position in the international market. This report will cover the competitive strategy of Vodafone and their influence of products and services in relation to the demand of the market. In today’s current economic state, the likelihood of a company entering into a global market is inevitable. Multinational corporations (MNCs) such as Vodafone are required to standardise their Research & Development activities throughout the world in order to penetrate the market. This is achieved by obtaining new technological opportunities, such as the most up-to-date phones, thus maintaining a competitive driver in the market. Firstly, the report will introduce the company and give an outline of the current operations, with focus on their current position in the market, and discuss the main competition faced in a global market. Secondly, focus will lie on the external forces and their influences on the company’s operations, along with discussing the strategic opportunities in order to overcome any facing competition. Finally, the report will include recommendations for the future of Vodafone and how they can become a market leader. Current position and strategy of Vodafone What kind business is Vodafone? Vodafone are a multinational cooperation who retail in telecommunication services. They were originally set up in the United Kingdom in 1984, and since then they have expanded globally and have been recognised as ‘the second largest telecommunications company in the world’ with revenue spanning over $46 billion (as of 2012). Telecommunications gained mainstream attention in the early 90’s; however the initial key market was business men and women, who used their phones whilst being on the move and so allowing them to communicate with their companies with ease. Though in the modern era, telecommunication went through segmentation in the market trends, and now in this day and age it would be difficult to find someone who does not own some form of mobile technology. Many phone providers battle to provide the best service for their customers (Figure 1). Figure 1: Vodafone’s market share compared to other leading brands. (Ofcom quarterly figures. Q3 2009) Figure 2: Vodafone’s coverage across the world. Competitive advantages of Vodafone. In order to identify Vodafone’s competitive advantage, first it is necessary to analyse the strengths and weaknesses within their current SWOT analysis. (Figure 2) Strengths Weaknesses • Diversification of products has increased the potential numbers of new consumers • A vast global presence and powerful brand image. • According to a Mintel report released in 2010, Vodafone is recognised as one of the most trusted service, with their excellent signal strength and efficient services (Market Line, 2012, p.

In this essay, the author

  • Analyzes vodafone's current position in the international market, their competitive strategy, and their influence of products and services in relation to the demand of the market.
  • Explains the purpose of the report, which includes an outline of current operations, competition, external forces, strategic opportunities, and recommendations for the future of vodafone.
  • Explains that vodafone is a multinational cooperation who retail in telecommunication services. they were originally set up in the united kingdom in 1984, and since then they have expanded globally.
  • Analyzes vodafone's market share compared to other leading brands, and its competitive advantages by analysing their swot analysis.
  • Explains that vodafone is recognized as one of the most trusted service, with their excellent signal strength and efficient services. vodafone has a well-defined cost reductions structure for operational costs.
  • Explains that vodafone has an established presence in mature and emerging markets such as africa and asia, which have expanded its market share and revenues.
  • Explains the strengths and weaknesses of vodafone, stating that they provide a highly diversified service with an excellent network infrastructure, while providing innovative services.
  • Explains that vodafone would have to fit their prices within the hierarchy of social class, and their objectives are usually set from a middle class.
  • Explains that vodafone are the second largest company in telecommunications within the global market, though their services are more directed towards those with a higher economic growth.
  • Explains that the telecommunications market is growing and expanding, which consequently becomes a highly competitive market with extremely high penetration rates.
  • Explains vodafone's differentiation strategy to provide a service for people with vast amounts of needs, including different allowances of minutes, texting and data for different monthly tariffs.
  • Explains that to achieve an effective competitive advantage, a company must identify their abilities to differentiate themselves from other companies in the market.
  • Explains that vodafone's strategy is a mix of expanding their geographic capabilities, to entice new consumers, maintain their current consumers and increase their technology capabilities by increasing their availability and network connections.
  • Explains that mobile operators don't want to end up on the same level as internet service providers, where they may be unable to appropriate the value under porter's value chain.
  • Analyzes porter's 5 forces and generic strategies to understand the intensity of competition in the market.
  • Explains porter's 5 forces framework, which evaluates strengths and weaknesses of each force within the model, and applies them to the level of competiveness.
  • Explains that o2 and vodafone are the leaders in the uk mobile market, and that the threat of substitutes is high due to a rapid improvement on the way communication is made.
  • Explains that ofcom's data shows that vodafone received the second least complaints from the biggest providers. orange got the most complaints in the last quarter of 2011, overtaking three.
  • Explains that o2 are the main competition vodafone face for the position of leading mobile network provider.
  • Explains that vodafone uk is one of 16 vodafone groups operating worldwide, with a massive 347 retail stores. the ceo of britain's vodafone group plc explained his perceptions of the company’s prospects at defeating credit crunch issues in europe and the us.
  • Describes vodafone's diversification strategy in terms of market segments and geographical areas to expand their range to the technological advantages currently being innovated worldwide.
  • Explains that the mobile communication industry has gone through rapid change, driven by new technological advances, such as the introduction of ‘smart phones’ and the capabilities of exploring the internet through a handheld device.
  • Recommends using a pest analysis to gain insight into vodafone's social and environmental implications.
  • Explains that the eu roaming regulation plan to decrease the level of charges made by mobile phone usages abroad by 70%.
  • Analyzes the pest analysis for vodafone, based on preissl, curwen, and haucap's telecommunication markets: drivers and impediments.
  • Explains how vodafone's global vs. local approach has given them the opportunity to provide service to diverse cultures, but view the world as a single market.
  • Explains that vodafone are already recognized for their sponsorships of worldwide brands, such as formula 1 and specifically ferrari. their departure has led to great pressure for mclaren as without vodafone, they cannot afford to slip further behind.
  • Recommends o2 and vodafone's future strategy for expansion to the untapped market.
  • Opines that the constant increase in popularity of smartphones and tablets may increase the revenue of vodafone. the inability to satisfy the consumer needs within the market is more associated with those of a lower disposable income.
  • Explains that the mobile communications industry has low threat of new entrants, but this could change with future strategic partnerships accruing.
  • Recommends performing gradual acquisitions throughout the world and accessing emerging country markets, such as in china or india. diversify products and services along with these trends.
  • Cites
  • Cites the following sources:
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