Developing a total communication strategy in the uk market
This report will critically analyse the external environment of the mobile phone operators industry with the application of appropriate strategy tools including PESTEL and Michael Porter's five forces models. An immediate result of this would be the identification of opportunities and threats that may arise from change in environmental factors and assessment of the attractiveness of the industry respectively. The report will also 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 case study on page 557 in the main textbook by Johnson, Scholes and Whittington, Exploring Strategy 9th Edition, Prentice Hall, 2011. Other sources include Keynotes, Mintel and Magazines.
2. QUESTION ONE: PESTEL, KEY DRIVERS AND MICHAEL PORTER'S 5 FORCES 2.1 PESTEL
The PESTEL framework is used for the analysis and according to Johnson, Scholes and Whittington (2011), “it provides a comprehensive list of influences on the possible success or failure of particular strategies”. Discussed below are a few issues of PESTEL, please see appendix for other issues. Political/Legal factors
Government's privatisation(through Ofcom) of the national telephone company, BT, compelling it to allow access to its network (via Openreach) for voice and broadband. This has helped to break down BT's monopoly thereby creating an opportunity for mobile operators to operate and at competitive rates.(case study p.558) Economic factors
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.558) says 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, hence less subscribers to its services. Social factors
Consumer need for converged services, such as mobile telephony, fixed line telephony, television and broadband internet, was increasing(case study p.558). This means an opportunity for mobile operators to expand 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 fixed line telephone market as households were becoming “mobile-only” users. This is an opportunity for mobile operators to capture the market share of fixed line telephone operators in a bid to expand theirs. c.
Consumer perceived prestige that comes with owning smartphones is an industry opportunity. For example, everyone wants to have an IPhone, HTC or Blackberry because they are ‘cool' or for other reasons, so operators in the industry can capitalize on this and increase their market share by offering cheap 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
Development of new technologies, IP(Internet...
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