Swot Vodafone

Email Developing a total communication strategy in the uk market 1. INTRODUCTION This treat will critically analyse the extraneous environment of the wandering(a) phone floozies sedulousness with the application of appropriate strategy tools including PESTEL and Michael Porters five forces models. An immediate result of this would be the identification of opportunities and threats that may arise from transfer in environmental factors and assessment of the attractiveness of the industry respectively.The report will to a fault analyse critically, the strategic capability of Vodafone, also applying appropriate strategy tools resulting in the identification of key strengths and weaknesses of the firm. The aim here will be to identify and discuss the core competences the firm possesses. To aid the analysis, the report will draw on information from various sources such as The Vodafone cause education on page 557 in the main(prenominal) textbook by Johnson, Scholes and Whittington, Exploring Strategy 9th Edition, Prentice Hall, 2011. another(prenominal) sources include Keynotes, Mintel and Magazines. . QUESTION ONE PESTEL, KEY DRIVERS AND MICHAEL PORTERS 5 FORCES 2. 1 PESTEL The PESTEL framework is used for the analysis and according to Johnson, Scholes and Whittington (2011), it fork overs a comprehensive list of influences on the realizable success or failure of particular strategies. Discussed below atomic number 18 a few issues of PESTEL, please see appendix for other issues. Political/Legal factors Governments privatisation(through Ofcom) of the arena telephone company, BT, compelling it to allow access to its network (via Openreach) for voice and broadband.This has helped to break down BTs monopoly thereby creating an opportunity for brisk operators to operate and at competitive rates. (case study p. 558) Economic factors a. The UK economy has still not fully recovered from the financial crisis of 2008, recovering even slower than other countries amidst huge government resuscitation efforts and even consumer spending is expected to decline by 0. 6 per capita in 2011(the Telegraph, May 2011). This is a threat to the industry as, the slower the economic recovery, the slower the market growth for the mobile operators industry. b. Though the case study(p. 58) verifys that personal disposal income growth as experienced between 2002 and 2007 was forecasted to resume in the future, recent developments suggest otherwise. Now the future is here, reports say household incomes are falling(NewStatesman, May 2011 and Mail Online, May 2011 ). This is a threat to the mobile industry as it means less income at the disposal of households, thence less subscribers to its services. Social factors a. Consumer need for converged services, such as mobile telephony, stiff line telephony, television and broadband internet, was increasing(case study p. 558).This means an opportunity for mobile operators to round their market as more people are coming on board with this convergence need which could be a result of the plunge in disposable income so people want all services in one and pay a lower lump sum for all in a bid to ration their income. b. A decline in UK frosty line telephone market as households were becoming mobile-only users. This is an opportunity for mobile operators to clutch the market share of fixed line telephone operators in a bid to expand theirs. c. Consumer perceived prestige that comes with owning insolentphones is an industry opportunity.For example, everyone wants to meet an IPhone, HTC or blackberry because they are cool or for other reasons, so operators in the industry crapper capitalize on this and increase their market share by offering brassy deals. d. Consumer hype for new and modern technologies as everyone wants to have the latest thing in technology. This would create an opportunity for the industry to capitalize on and expand their market share. Technological factors a. developme nt of new technologies, IP(Internet Protocol) for voice, data and video transmission(case study p. 557).The dynamic nature of technology is posing a threat as operators may be stuck with obsolete technology thereby facing a challenge to be pro-active in straddle to retain market share and keep dig rates at bay. b. continue upgrading of speeds over mobile networks poses a threat as operators have to keep up with the upgrading of speeds because they might loose customers to service providers who can offer better speeds. environmental factors As a result of advancement in telecommunications technology, mobile operators have to replace network equipments and hazardous wastes(masts, cables, construction waste etc)frequently.Mobile operators are then set about with the challenge of finding energy efficient ways of recycling which may also be capital intensive, altogether posing a threat. Legal factors a. Ofcoms payoff of licences for additional mobile network operators will pose a thr eat to incumbent operators( as their market share is threatened) and be an opportunity to potential operators as this will lower entry barriers for them. b. Elaborate legal contracts can also be a threat to the industry as lots of legal obligations have to be satisfied prior to and afterwards entry.Drawing up different phone contracts for different mobile packages can prove challenging for the operators. 2. 2 KEY DRIVERS FOR mixed bag Socio-cultural issue Consumer need for converged services Consumer needs(which has led Virgin Media to provide multiple services such as the quad play and others providing the triple play) change from while to time and even some firms will try to create the needs for the consumers thereby pushing the industry towards finding ways to satisfy these needs as the market expands. This is one of the major drivers of change for the industry.Technological issue Development of new Technologies The dynamic nature of technology will keep operators findings way s to stay frontward of competitors by developing new technologies such as the IP, digitising high-speed distribution of voice, data and video over multiple networks. 2. 3 MICHAEL PORTERS 5 FORCES ANALYSIS a. bane of entry (low) The barrier of initial capital cost of entry may be daunting but the regulatory changes in the UK communications industry by Ofcom saw the issuance of licences to more mobile operators and also allowing MVNOs to ease network capacity without the capital cost of physiqueing their own hence reducing barriers to entry. This has also led to increase in the number of competitors. b. Threat of substitutes (low/moderate) Considering the advantages of mobile connections (make calls, sending messages/data, music etc), substitutes would be the fixed line connections, skype(or VOIP) on broadband, radio airwaves, phone booths or simply go without. With the fixed line connections, Ofcom reported that the number of lines dropped from 34. 9million in 2003 to 33million in 2009.Call minutes had also decreased by 15% from 167billion to 138billion over the same(p) period with mobile minutes expected to exceed fixed line minutes in 2010(Case study p. 558). A report on Broadband intelligence activity also says that mobile broadband will overtake fixed line connections in 2011. (Broadband Choices 2009). It is likely that the trend will continue in this way, considering the convenience offered by mobile connections, of being able to make a call on the move. c. Competitive rivalry (high) One of the aims of Ofcom is to ensure healthy opposition among operators which saw a rapid growth in the number of competitors.The major competitors in the industry are Vodafone, Telefonica O2, Orange, 3 UK and Tmobile plus lots of MVNOs. According to the case study, wireless operator margins in the UK were up because of strong competition(p. 559). d. Buyer power (moderate) The main buyers from the industry are households(individuals) and businesses. According to case stu dy(p. 559), average churn(customer switching) rates in the market was 20% annually due to the introduction of number portability in 2007 and competitive tactics such as subsidising handsets for subscribers. Customers would switch operators for better offers or added value for their money.To counter this churn rate, most operators have found a way to switch post-paid customers to longer contracts of 18months or even 24months as at 2009. A recent 2011 report (Sim-only deals, 2011) highlights other reasons for low switching rates including providers loyalty programme and value for money SIM only deals which altogether gives them the power to make customers stay. e. Supplier power (moderate) The main suppliers to the industry would be the handset makers and Ofcom. Major handset suppliers such as Nokia with 40% of UK handset market and Samsung,21%, supply handsets to the industry under global contracts(case study p. 59). There are more suppliers today including Apple, which is another fa st festering supplier as their phones are deemed trendy and a must-have because of its innovative features. Sony-Ericsson, Samsung are among the gobs of others. The case study p. 559 says mobile handset sales had experienced a decline in 2009 as UK wireless operators started to offer sim-only plans which allow consumers to retain their contemporary handset and pay lower monthly tariffs. Ofcom on the other hand is the sole provider of spectrum. ATTRACTIVENESS Based on the evidences from the five forces, the report concludes that the industry is attractive.This being that, though rivalry is high, but other threats and powers are low. Essentially incumbents or new operators can then focus only on competition and worry less about powers and other threats. 3 QUESTION TWO STRATEGIC CAPABILITIES OF VODAFONE According to Johnson et al. (2011), Strategic capabilities are capabilities of an organization that contribute to its long-term option or competitive advantage made up of two compon ents Resources, which are assets the company has or can call upon and Competenceswhich are ways in which those assets are used or deployed effectively. 3. 1 RESOURCES AND COMPETENCES piece Resources Vodafone has had a history of experienced CEOs including Arun Sarin(resource), who was skilled in achieving growth in developing markets(competence/strength). Also, Gary Laurence(resource), head of Vodafone UK, appointed CEO in September 2008 was k forthwithn for his ability to identify strategic options(competence/strength) and the current CEO, Vittorio Colao(resource) who succeeded Arun in 2008 is known for strong reputation as cost cutter. (competence/strength). (Case study page 563) Vodafones league with BT(resource) hosting BTs MVNO, allowed it to provide services to corporations. competence/strength). It started a joint feign with O2(resources) which enabled it to extend its fixed-line network. (competence/strength). Vodafone, in its target of business travelers with passport ser vices(resources), was able to offer home body politic voice rates while roaming in Europe and mobile data services for ? 10 a day(competence/strength). (case study page 563) Financial Resources Financial public presentation of Vodafone (a) ROCE(Return on Capital Employed) measures the returns made from all forms of resources or capital employed in the business.Vodafones resources are the capital employed and its competence is shown in the amount of returns generated from use of goods and services these capital. Vodafones ROCE plunged by 3. 73% to give a ROCE in 2010 of 19. 85. This may be slightly better than industry average but it shows a weakness to efficiently utilise resources to yield maximum profits. Vodafone 2010 2009 Industry ROCE 19. 85 20. 59 19. 48 reservoir. Morning Star Stock Report. (b) Current ratio measures a companys efficiency at meeting its short term obligations.A good ratio would be for current liabilities to be covered at least once but Vodafones current assets(resources) can barely cover 50% of its liabilities in 2010 though it improved from previous year. On the whole, this is a weakness as the company is low on liquidity and incurring too much liabilities in terms of its short term borrowings. Vodafone Plc 2010 2009 Industry Current Ratio 0. 501 0. 471 Source Morning Star Stock Report. (c) Net Gearing shows the proportion of debt within a companys overall capital. The table below shows that Vodafones net gearing has declined from 40. 7% in 2009 to 37. 76% in 2010. Overall for the industry borrowing is about 40% of total capital. The simplification therefore for Vodafone is good as its means a reduction in finance costs too. Vodafone 2010 2009 Industry Net Gearing ratio 37. 76% 40. 67% 39. 40% Source Morning Star Stock Report. (d) amour cover explains Vodafones ability to service its debt. From the table below, it appears Vodafone makes enough profits to service it finance costs as it has been able to increase its interest cov er to 7. 51 times in 2010 from 7. 03times in 2009.This may not be a core competence but it is a strength for Vodafone. Vodafone 2010 2009 Interest cover 7. 51 times 7. 03 times Source Morning Star Stock Report. Physical Resources Vodafone makes heavy enthronements in the trade of its Product brands (competence/strength) which includes, landline solutions and mobile telephony, mobile broadband and secure employee strange access(resources), making them well known. (Vodafone website). It invests also in the marketing (competence/strength) of 3G dongles or cards(resources) for internet connection giving it the largest share of 3G subscribers.Vodafone used wholesale services to distribute its fixed voice and broadband (resources) but its prices were too high giving it only a few customers(weakness). Another of its products is the Vodafone-at-home(resources), with which it competed with fixed line providers by offering fixed line prices when customers call from within or near their hom e(competence/strength). Core Competences For the sake of this report, the core competences identified are Vodafones CEOs. They have been exceptional with what they bring to the table and how their expertness has been able to transform the company.Vodafone UK CEO, Gary Laurence has been formidable in terms of identifying strategic options available to the company such as successful alliances and joint venture with likes of BT and O2. Heavy investment in the marketing of its products giving it largest share of 3G subscribers is another core competence. 3. 2 VODAFONE VALUE CHAIN Primary Activities Inbound logistics Vodafone possesses its own network equipments, backbones and infrastructure to provide various communication services, and purchasing of handsets (Annual Reports 2010, p. 21).Now, its in a network sharing agreement (sharing masts, sites and towers) with O2 covering the UK and 4 European countries,. (case study page 559, Guardian promenade 2009). , Another inbound logistic i s the ownership of spectrum. Spectrum is of particular importance to the mobile phone and mobile broadband industry, which relies on it to carry information between customers handsets and mobile masts. Vodafone spectrum is 1800MHz. (Ofcom report, Feb 2011). Operations All Vodafone operations are based on in-house infrastructure. Vodafones operations is dependent on its people, infrastructure and financial resources.Its logistics operations (which provides a variety of value-added services), evolves from a single, purpose built site in West Midlands. (Unipartlogistics. com) Out-bound logistics Vodafone has consumer on-line purchasing systems in place that allow customers to purchase its services directly(Vodafone website). It also has its own bill system. Marketing and Sales Vodafone has several own branded and other retail chains that it uses in distribution. According to the case study(page 563), Vodafone invests a lot in marketing in all markets whilst promoting its brand and als o sponsors Formula 1 and England cricket sports.ServicesIts all encompassing website enables customer online ordering and feedback monitoring. (source). Vodafone has customer services helpline that offer after sales services and it also offers services to MVNOs such as Lebara mobile, Asda mobile, Talk mobile(Carphone Warehouse) and BT mobile(http//ukmobilecoverage. co. uk/), Support Activities Infrastructure Vodafones mode of expansion was the formation of a joint venture with O2(case study p. 559) to manage its mobile network and share network covering 4 European countries and the UK.It also leases BTs fixed line services and hosts BTs MVNO. (case study p. 562) Human Resource Management Vodafone depends on its employees for the quality of its services to customers. It ensures an inclusive working environment and encourages innovation, ambition and pro-activeness. Vodafone encourages enthusiasm, talent and commitment in its employees in order to build and maintain its success and st ay competitive. (Vodafone, Our people). Technology and Development Vodafone owns internet portals which enables on-line ordering.Also, continuous R&D helps the company to incubate and deliver innovation to the business. (Annual Report, 2010. p. 20) procural Vodafone, like other networks, purchases branded handsets from suppliers. Vodafone holds several training courses for its procurement team for efficient management of supplier performance. CONCLUSION SWOT MATRIX STRENGTHS1. Experienced CEOs(UK CEO, Gary Laurence). 2. union with BT and O2. 3. Offering home country voice rates abroad. 4. Heavy investment in marketing. 5. Vodafone at home6. Good Interest Cover7.Reduced borrowing WEAKNESSES1. Low level of liquidity2. unfitness to increase ROCE3. High prices and inefficient channel of distribution for fixed voice and broadband. OPPORTUNITIES1. Governments privatization of Ofcom. 2. Consumer need for converged services. 3. Decline in Fixed line telephone market4. 2012 Olympics5. Cons umer demand for smart phones6. Consumer hype for modern technology7. Ofcom issuance of entry license THREATS1. Slow economic recovery from recession2. Decline in disposable income3. Immigration cap4. Health issues in areas of mobile masts. 5.Customer switching rates. 6. Development of new technologies7. Capital intensive recycling8. Ofcoms issuance of entry license9. Elaborate legal contarcts From all facts assessed in the report and also information from the case study and Vodafone accounts, it is indeed evident that Vodafone is struggling to develop a total communications strategy to enable it to secure leadership in the rapidly growing market for high speed internet services in its UK home market due to the fact that it actually cannot improve its core activities in order to gain competitive advantage.Please rate the quality of this essay Good Neutral Poor Struggling with your essay? You can get your essay custom written by an expert in your subject area. Fully researched and re ferenced, the perfect model answer reach a quote here Share download strike Download Email Request the removal of this essay. GET A PRICE EssayDissertationModel AnswerCoursework/AssignmentLiterature ReviewDissertation ProposalOutline/Skeleton Answer GCSENVQA- trainDiplomaUndergraduatePGDMastersGDLLPCBPTCPhDGCSE B GradeGCSE A GradeGCSE A* GradeNVQ Level 2 PassNVQ Level 2 MeritNVQ Level 2 DistinctionA-Level B GradeA-Level A GradeA-Level A* GradeDiploma (HNC/HND) PassDiploma (HNC/HND) MeritDiploma (HNC/HND) DistinctionUndergraduate 22Undergraduate 21Undergraduate 1stUndergraduate Upper 1stPGD PassPGD MeritPGD DistinctionMasters PassMasters MeritMasters DistinctionMPhil PassPhDGDL PassGDL CommendationGDL DistinctionLPC PassLPC CommendationLPC DistinctionBPTC Competent (Previously BVC)BPTC Very Competent (Previously BVC)BPTC Outstanding (Previously BVC) 000 language (4 pages)No Word Count1250 lecture (5 pages)1500 terminology (6 pages)1750 quarrel (7 pages)2000 linguistic communi cation (8 pages)2250 Words (9 pages)2500 Words (10 pages)2750 Words (11 pages)3000 Words (12 pages)3250 Words (13 pages)3500 Words (14 pages)3750 Words (15 pages)4000 Words (16 pages)4250 Words (17 pages)4500 Words (18 pages)4750 Words (19 pages)5000 Words (20 pages)5250 Words (21 pages)5500 Words (22 pages)5750 Words (23 pages)6000 Words (24 pages)6250 Words (25 pages)6500 Words (26 pages)6750 Words (27 pages)7000 Words (28 pages)7250 Words (29 pages)7500 Words (30 pages)7750 Words (31 pages)8000 Words (32 pages)8250 Words (33 pages)8500 Words (34 pages)8750 Words (35 pages)9000 Words (36 pages)9250 Words (37 pages)9500 Words (38 pages)9750 Words (39 pages)10000 Words (40 pages)10500 Words (42 pages)11000 Words (44 pages)11500 Words (46 pages)12000 Words (48 pages)12500 Words (50 pages)13000 Words (52 pages)13500 Words (54 pages)14000 Words (56 pages)14500 Words (58 pages)15000 Words (60 pages)15500 Words (62 pages)16000 Words (64 pages)16500 Words (66 pages)17000 Words (68 pages)1 7500 Words (70 pages)18000 Words (72 ages)18500 Words (74 pages)19000 Words (76 pages)19500 Words (78 pages)20000 Words (80 pages)25000 Words (100 pages)30000 Words (120 pages)35000 Words (140 pages)40000 Words (160 pages)45000 Words (180 pages)50000 Words (200 pages)55000 Words (220 pages)60000 Words (240 pages)65000 Words (260 pages)70000 Words (280 pages)75000 Words (300 pages)80000 Words (320 pages)85000 Words (340 pages)90000 Words (360 pages)95000 Words (380 pages)100000 Words (400 pages) Price ? 390 Share this Have a question about our service? * See our FAQs * Ask our writers a direct question now * See the UKEssays team * Customer testimonials WARNING avoid essay writing scams Sign up and be the first to receive our latest offers Your email shroud Instant Price Order Now * Join our circle on Google+ * Find us on Facebook * Follow us on Twitter * Get our latest updates Copyright 2003 2012 UK Essays is a trading name of All Answers Ltd.All Answers Ltd is a company registe red in England and Wales Company Registration No 4964706. VAT Registration No 842417633. Licensed under the Consumer Credit Act under Licence No 0612201. Registered Data Controller No Z1821391. Registered office Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. * Fair custom Policy * Terms Conditions * Privacy Policy * Cookie Info * Complaints Policy * Get Verified * Fraud * Writer Jobs * Corporate Client Services * Sitemap atomic number 18 you writing an essay and struggling? We can help you Find out more Read more http//www. ukessays. com/essays/communications/developing-a-total-communication-strategy-communications-essay. phpixzz2DTJZYU7Q