Vodafone Companys Strategic Analysis

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Vodafone is an international telecommunications company that has its headquarters in Newbury, U.K. This company is the worlds largest mobile telecommunications company measured by revenues and the worlds second-largest measured by subscribers (behind China Mobile), with around 332 million proportionate subscribers as of 30 September 2010 (SWOT Analysis on Vodafone, 2010, par.1). The company carries out the operation of networks in more than thirty countries across the world and has also partner networks in more than forty more countries. Vodafone also owns forty-five percent of Verizon wireless which is the biggest mobile telecommunications company in the U.S in regard to the measurement of subscribers (Vodafone, 2011).

The biggest strength that Vodafone has in the telecommunications market is found in the brand image that it has and its recognition. This company, having set up a global presence and carrying out high investment in marketing an image that is differentiated through the promotion of Vodafone lifestyle presently enjoys a differentiating advantage that, if exploited properly, can offer a lead in competition (Gupta, 2011, n.p).

The companys presence in many nations in Europe and also in all parts across the globe facilitates the enhancement of this image. It makes it possible for the customers to engage in traveling and enjoying the services offered by the operator of their home country in an easy way. Vodafone has set up a strategic alliance aimed at offering the customers better service.

Although the telecommunications market is greatly saturated in some of the areas, it provides a big potential and this is because of the elderly population as well as consumer sophistication. This market provides great opportunities by means of a keen segmentation of the market as well as through exploitation of certain segments that are profitable. There should be pursuing various strategies. For instance, there is a need to have simple phones and simplified pricing plans to the aging population and more updated, sophisticated solutions for younger generations (Gupta, 2011, n.p).

Stretching the market boundaries could offer additional opportunities by making it possible for the company to gain entry into the fixed-line service in a more aggressive way and also to enjoy the gains from the high investment that is made in the 3G technology in a better way. In addition, Vodafone has commenced on its first moves in setting up strategic alliances to build up the solutions for the end-users which are customized (Gupta, 2011).

However, the Vodafone Company is also faced with some threats. The European section of the market of Vodafone is marked with the high competition levels that are there. The big brands like T-Mobile and O2 are engaging in the exploitation of the price sensitivity that the customers have and by doing this, they are setting up a powerful market presence and image. There is also an additional increase of indirect competition through the existence of Skype and other related Internet-based services (Gupta, 2011, n.p). This coupled with the impending European legislative measures is projected to bring in more limitations of the tariffs for the network providers imposing a further need for price cuts which could harm the bottom line profitability of the company (Gupta, 2011, n.p).

The primary goal of Vodafone is to become a leader in the worlds mobile communication industry, improving the lives of its customers through the unique power of mobile communications and also to maintain the top position in the mobile telecommunications group (Jajodia, et al, 2011, p.21). Having intense competition, this company has to this point dominated the market by being the worlds leader in mobile telecommunications (Jajodia, et al, 2011, p.21).

Vodafone is a company that is customer-oriented, considering that it is a world leader in mobile telecommunications. By carrying out an analysis of the overall structure of this company, it can be found out that the reliable innovative services and the customer-centric passion for customers are the core products and are very important for the company (Jajodia, et al, 2011, p.21).

The abilities that Vodafone has in research and development as well as in management are also supposed to be considered as being the companys core competencies. This is for the reason that such abilities serve as a source of competitive advantage for the company over its competitors in the market. Vodafone engaging in the acquisition and merging with other companies has made it possible for the company to widen its customer base globally. Moreover, by the company investing more money in R&D, next-generation platforms for mobile telephony for both voice and data allow Vodafone to maintain a competitive advantage(Huvard, et al, 2006, p. 17).

The Vodafone Company has a sustainable competitive advantage. The sustainable competitive advantage is created by making use of valuable, exceptional, and expensive-to-imitate capabilities and which can not be substituted. The Vodafone Company had capabilities that were valuable, exceptional, and expensive-to-imitate but substitutable. Having substitutable capabilities made the company only have a competitive advantage that was temporary. But on the other hand, if this company may look for ways to differentiate itself in a successful way and turn to be non-substitutable, this will enable it to realize a competitive advantage that is sustainable. The temporary competitive advantage that has been realized has some performance implications of average returns to above-average returns (Huvard, et al, 2006, p.17).

Vodafone has valuable capabilities since it holds on to what it knows best and that is mobile telephony. It has not engaged in venturing in fixed-line. Through mobile telephony or offering content, the company ensured value creation for its customers by being the most excellent and focused company. In addition, Vodafones capabilities are rare. The companys ability to set up innovative technology as well as merge with other companies in a successful manner are capabilities that are rare.

Moreover, Vodafones capabilities are expensive to imitate. This companys organizational culture has to be well-built to complete the mergers and acquisitions in a successful way, while at the same time setting up innovative technology. The development of such capabilities has been carried out over time and the proficiency acquired will be quite hard for other companies to set up. But on the other hand, the mobile telephony of Vodafone is substitutable, which can be seen in the high turnover all through the industry.

In conclusion, as it has been looked at, Vodafone has been a very successful company in its operations. It has been able to become the worlds leader in the mobile telecommunications market. This is attributed to the best strategies that the company has been putting in place. However, following the stiff competition in the market, this company needs to develop appropriate strategies that will enable it to maintain its leadership position. The company needs to respond to the ever-changing customer needs and price sensitivity and is also supposed to ensure that it gains a sustainable competitive advantage by developing non-substitutable capabilities.

References

Gupta, A. (2011). Vodafone PLC: Sample feasibility report for a supplier. Web.

Huvard, S. et al. (2006). Vodafone Air Touch: The acquisition of Mannesmann case analysis. Web.

Jajodia, M. et al. (2011). Vodafone. Web.

SWOT Analysis on Vodafone, (2010). Web.

Vodafone, (2011). Web.

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Vodafone Companys Strategic Analysis

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