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Contemporary Managment- Vodafone

By chan1406 Sep 01, 2011 5817 Words
The following report will address issues in contemporary management and Human resource management that face the Multi National Organisation Vodafone. The telecommunications industry is an extremely fast paced competitive environment. With such pertinent issues facing the organisation the report will look at the major factors influencing the above subjects in today’s business environment.


Section 1 – Contemporary Management Issues
Structure and Culture
Porters Five Forces – Market Analysis
Growth and Merger Strategy
Contemporary Issues an Overview
Vodafone’s Contemporary Management Issues

Contemporary Management issues Facing Vodafone


Appendix 1SWOT Analysis
Appendix 2PESTLE Analysis
Appendix 3Stakeholder Analysis
Appendix 4Porters Five Forces
Appendix 5 Operating Countries
Appendix 6Vodafone Structure
Appendix 7Vodafone Culture


Vodafone Group Plc is one of the worlds largest mobile communications companies by revenue; operating across the globe providing a wide range of communications services. (Vodafone 2010) They provide a wide range of communication services including mobile voice calls, messaging, data and fixed broadband. Vodafone have a significant global presence (Appendix 1) with equity interests in 30 countries and 40 partner networks worldwide. They operate in three geographic regions Europe and Africa, Central Europe and then Asia Pacific and Middle East. Vodafone also have an investment in Verizon Wireless in the US (Vodafone 2010). As of March 31 2010 Vodafone had 341 million registered mobile customers and a revenue of £44,472 million. (Vodafone 2010)

Structure and Culture
The structure of Vodafone (See Appendix 2) has changed in the last few years to compensate for changes in strategic implementation. The organisational structure was flattened in 2010 to accommodate Vodafone’s slim lining and strategic objectives. The simplified organisational structure is based around two operating regions – Europe Region and Africa, Middle East and Asia Pacific region (Kerr, A 2010) The above restructuring will in turn maximise shareholder value from Vodafone’s investments in Verizon Wireless in the US, and Bharti holding in India ( Kerr, A 2010)

Vodafone Shareholders have had a turbulent existence over the last decade. Many eager are eager for the organisation to sell off overseas investments and make long awaited dividend payments. Under the CEO Chris Gent the organisation experienced a rapid bout of mergers and acquisitions. Which lead to the telecommunications company collaborating across the globe. Gent was also accredited with turning Vodafone into a global giant from just a small British Company. As an individual it has been commented that Gent ‘ never did anything that wasn’t calculated.’ ( BBC 2000) This is very much an example of ‘strategic leadership’ on the part of Gent. As the CEO of that time Gent conveyed a compelling vision of exactly what he wanted to do with the company. (George 2009)

Porters Five Forces
In terms of Porters Five Forces (Appendix 4) Vodafone have a relatively low buying power this is due to the sanctions and exclusivity deals that manufacturers can strike up with competitors, for example O2’s exclusivity with the I phone in 2008 lead to one of Vodafones main competitors penetrating a new highly lucrative market. In comparison to the buying power the threat of substitute products is relatively low, mobile phones are a necessity in this day and age and are more likely to replace landlines than be substituted by them. ( Appendix 4)

An organisations strategy is defined as ‘the direction and scope of an organisation over the long term, which achieves advantage in a changing business environment through its configuration of resources and competences with the aim of fulfilling stakeholder values and expectations (Johnson 1998) Vodafone has a clear Business level strategy as much of their activity is concerned with ‘ choices of products, meeting customers needs and gaining an advantage over competitors on the other hand there seems to be some corporate level strategy as well namely due to the expectations of stakeholders and the influence of investors. Vodafone release a corporate strategy statement every three years but due to the fast paced nature of the environment they endure they have been known to change them at any given moment depending on the happenings of the current environment. This was the case in 2006 when Vodafone made a ‘strategic u –turn’ (Johnson, E 2006) Having just shaken up the organisation 18 Months earlier Vodafone restructured the organisational chart and signalled a push into fixed line services mimicking the behaviour of strategies of France Telecom. The last release in November 2010 highlighted the following as key strategic plans until 2014:

The strategy that Vodafone has adopted involves mergers, liquidating assets andexpanding into emerging markets.

The above actions of Vodafone can be described as a definite strategic fit, this is when an ‘organisation manages to match its resources and capabilities with the opportunities in the external environment’ (Grant, M 2007) in this case it was with the economy and in reaction to competitor activities.

Growth Strategy and a Merger Strategy

In Autumn 2010 Vodafone announced that they will focus their efforts on Europe, India and Africa. Vodafone announced that they had plans to sell their shares in Japanese wireless operator Softbank for £3.1 Billion ( G,White 2010) The money gained from this sale will be used to reduce debt. CEO Vittario Colao is thought to be reviewing minority interests after Vodafone sold their stake in China Mobile for £4.3Billion. (G, White 2010)

Contemporary Management Issues in General

Organisations are faced with a number of contemporary management issues today one of them is competition which is defined as ‘organisations that produce goods and services similar to a particular organisations goods or services. In many cases vying for the same customers. This can be extremely challenging for business and intense competition can have an impact on other areas concerning contemporary management such as motivation. Motivation can be described as psychological forces that determine an individual behaviour in an organisation motivation can be intrinsic) and extrinsic motivation explains why employees behave the way they do in organisations. Talent management is concerned with developing new workers and developing and retaining current workers, the importance of this particular aspect of management is that organisations need employees to have the correct skills for the position in hand. Culture is also a pertinent subject within an organisation as it is ever important that everyone is ‘singing from the same hymn sheet’. The image that an organisation wants to give can be reflected in the culture of the organisation. Culture can also be tied in with market strategy and be used to achieve organisational goals. Corporate Social Responsibility has been criticised as a buzzword in recent years, critics have also voiced concerns about the sincerity and motives for engaging in CSR activities. CSR is defined as "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large" (Baker, M 2010) Milton Friedman wrote in his famous 1970’s article in The New York Times Magazine, that “the one and only social responsibility of business, is to increase profits for shareholders.” (Bilson, J 2010)

Contemporary Management
This section of the report will look at specific Contemporary Management issues affecting Vodafone globally and in the UK. A contemporary management issue facing Vodafone severely is competition. Competitive advantage is essential for Vodafone to outperform other organisations who intend to sell similar services and goods. This is apparent in many of the countries that Vodafone operate in. Vodafone are vying for many of the same customers in a market that is extremely fast paced and changing due to technological advancements and changing customer needs. Rivalry between competitors is extremely fierce, in developed countries such as the UK the market is extremely saturated. As opposed to new customers taking products for the first time they are churning between the major organisations such as O2, Orange, T Mobile and now the MVNO ( mobile virtual network operator) Tesco Mobile. Although most industries are intensely competitive the telecommunications industry suffers form ‘hypercompetition’ due to it having permanent ongoing intense competition brought about by advancing technology or changing customer tastes fads and fashions. (G, Jones 2009). Due to the nature of the industry Vodafone change their point of sale each month as do all the other mobile phone networks to keep up to date with new releases on handsets and updating tariff offers. Using the Five Porters Five forces the Market in which Vodafone operates is typically. The way the Vodafone in particular copes with the competition is in many ways no different than any other of the mobile networks. However as mentioned earlier on in the report the rapid expansion in the years of Gent allowed for massive expansion globally making Vodafone the largest network (in revenue) The structure of Vodafone also seems strategic in its implementation by splitting the organisation into the specific geographical groups (Appendix 6) allows separation of two distinct markets (Emerging and developed) the developed markets are seen as saturated and the emerging ones are seen as new ventures for Vodafone to penetrate. Learning Organisation

A learning organisation according to Peter Senge ‘is where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together.’ (Senge 1990) Comparing this to the culture that Vodafone depicts on its website (Appendix 7) in fourteen short sentences is in line with that of Senges Learning organisation notably ‘ We listen to the people we work with. We involve them in how we develop as a business. (Vodafone 2010)

A Learning Organisation is an organisation which facilitates the launching of all its members and continually transforms itself. (G.Jones 2009) Vodafone at face value can be seen as a learning organisation they have adopted a ‘learning survey’ which helps Vodafone identify opportunities to improve working environments and practices, and support people so they can work to their best standard.(Vodafone 2010) This is promoting creativity and putting an emphasis on a shared vision allowing all organisation members to frame problems. (G, Jones 2009) However it should be raised that as much as Vodafone has put a ‘learning survery in place its doesn’t necessarily mean that the full meaning and values of a learning organisation is being adhered to. Also the actions of the CEO Chris Gent doesn’t completely demonstrate Senge’s definition of ‘ the learning organisation. The behaviour of rapidly expanding was something that was coined from the hierarchy downwards. Going against the collective nature of the learning organisation, that normally lends itself to flat open and networked structures.

Senge also comments that ‘Organizations learn only through individuals who learn. Individual learning does not guarantee organizational learning. Senge (1990) Which in many respects is what Vodafone promotes with their high profile recognition schemes ‘ Legends and following the 'Red, Rock Solid and Restless' work ethic.

Following on from the notion of ‘the learning organisation Argyris and Schon (1978) claim that learning involves the detection and correction of error.

For Argyris and Schön (1978: 2) learning involves the detection and correction of error. Where something goes wrong, they suggested, a starting point for many people is to look for another strategy that will address and work within the governing variables. In other words, given or chosen goals, values, plans and rules are operationalized rather than questioned. According to Argyris and Schön (1974), this is single-loop learning. An alternative response is to question to governing variables themselves, to subject them to critical scrutiny. This they describe as double-loop learning. Such learning may then lead to an alteration in the governing variables and, thus, a shift in the way in which strategies and consequences are framed. (See Chris Argyris and double-loop learning). When they came to explore the nature of organizational learning Chris Argyris and Donald Schon (1978: 2-3) described the process as follows: When the error detected and corrected permits the organization to carry on its present policies or achieve its presents objectives, then that error-and-correction process is single-loop learning. Single-loop learning is like a thermostat that learns when it is too hot of too cold and turns the heat on or off. The thermostat can perform this task because it can receive information (the temperature of the room) and take corrective action. Double-loop learning occurs when error is detected and corrected in ways that involve the modification of an organization’s underlying norms, policies and objectives. Single-loop learning seems to be present when goals, values, frameworks and, to a significant extent, strategies are taken for granted. The emphasis is on ‘techniques and making techniques more efficient’ (Usher and Bryant: 1989: 87) Any reflection is directed toward making the strategy more effective. Double-loop learning, in contrast, ‘involves questioning the role of the framing and learning systems which underlie actual goals and strategies’ (op. cit.).

Experiential Learning/Double loop learning Kolb mention….

Technology and the pace of change is an imminent issue for an organisation such as Vodafone who are heavily reliant on new technology and releases to enhance revenue and remain competitive in the telecommunications industry. “So brilliantly is the pace of change that new product generations are being completed when earlier ones are being launched” (Heller, R)In the space of just a few years Vodafone released components of 3G technology in 2000 with HSDPA in 2002 and is currently in the midst of finalising its 4G network. Each development is merely allowing for more bandwith and downloads via the network. It highlights the salient point that as the consumers need for smartphones and data services increase Vodafone has to react to their demands due to the pace of technological change. The significance that the fast paced change of technology has with contemporary management is the constant need to revaluate strategy and market positioning. Also identifying new markets for the organisation to break into.

Within the UK Vodafone outsource their cloud business to an organisation called Daisy. In March 2011 Daisy took on this part of the business on a £12 million contract. Mobile today describe the purchase as a ‘strong strategic fit’(House M 2011). In this case the strategic fit has been implemented because of changing consumer demands in the telecommunications market. Daisy is concerned with providing remote file access for businesses in the UK which is a side of the business that has grown dramatically for Vodafone in the last few years. Strategic fit is often described as an organisation

Organisational Culture
Organisational Culture is defined as ‘ the collection of traditional values, policies, beliefs and attitudes that constitute a pervasive context for everything we do and think in an organisation’ (Mullins, L 2007) In terms of Vodafone as an organisation the ability to have one culture across such a large organisation is something that must be fairly difficult to implement. For instance Vodafone operates in the UK and India ( Vodafone 2010) it would be extremely difficult to have a similar organisational culture in such two different countries. Vodafone as an international organisation bears little consideration to this however they may be attending to this at a local level, it is certainly not addressed on their website or any correspondence available to the public. For instance to look at this further the theorist Hofstede views the UK as a relatively highly individualism culture and India as a low individualism. Another contrast of the two cultures is the power distance the UK’s is relatively low and India’s is very high. Power distance is used to categorise levels of inequality in organisations. (Mullins 2007)

Conclusion- Should Vodafone shift managerial perspective- Explain benefits of doing so

The report acknowledged three pertinent contemporary management issues that Vodafone face as an organisation the learning organisation, competition and the pace of technology and change.

In terms of the learning organisation it should be

Section 2- Ed Alport

Introduction define HRM
Human Resource Management is concerned with the organisational activities relating to recruiting, selecting, designing work for, training developing, appraising and rewarding, directing and motivating and controlling workers. HRM can also refer to the framework of procedures, policies and philosophies that exist between an employer and an employee. In large HRM entails elements of the initial recruitment and selection process

Overview of HRM in Vodafone
The Communication Workers Union (CWU) is the largest union in the UK for the communications industry with 211,000 members. (CWU 2011) Notably the significance that this strikes with Human Resource issues facing Vodafone is the sheer power that the CWU has on helping to deploy HRM policies. In 2010 Vodafone announced they were performing particularly well with annual operating profits rising to £348 Billion compared to £155 Billion in March 2010. Upon Vodafone releasing their financial information Andy Kerr the deputy general secretary of CWU commented ‘ results show that Vodafone is performing well and enjoying financial success. Its now time Vodafone rewarded its hard working staff. ‘(Withers, P 2011) Vodafone reacted very swiftly to the comments of Kerr. Clearly demonstrating the power that the union implies to have over the Mobile Phone giant. In reaction to the comments Vodafone announced that all staff would be rewarded ‘ employees will be receiving Bonuses this year’ ( Withers, P 2011) Vodafone employees will also be offered to join the share scheme. Employees will be invited to join the buy one get one free share scheme. The announcement of increased profits will please all the stakeholders involved with Vodafone. Vodafone’s knee Jerk reactions to the comments of CWU suggest that without trade union intervention there may not have been any bonuses or payouts for employees despite performing so well 2010 –2011. Although Vodafone has voiced that they will be ensuring staff are recognised for performing so well would they have rewarded everyone if the CWU hadn’t brought the issue to the table initially. In recent years there has been discussion that involvement in trade unions has declined this may be the case, in this instance CWU are acting as a regulator to the industry as opposed to a vessel representing active members of the union. Although CWU has Vodafone’s staff in their interests their impact and success would be ten fold with active members of the union. This is the case in Ireland and Germany. It seems that union membership in high technology industries is traditionally not very high possibly due to the high staff turnover. In contrast to Vodafone reactions to the (CWU) this year, in 2007 Vodafone were under pressure to acknowledge the Connect union that had almost 200 members. The union went to ACAS to gain recognition as a legitimate union in response to their refusal to acknowledge Connect Vodafone commented the following ‘Vodafone continues to value open and direct communication with its employees’ The key word here being "direct", as in not via collective bargaining. (Ray, B 2007)

The Human Resource issues that Vodafone
Vodafone’s HR chief announced in that the organisations decision to close its final salary pension scheme and cut jobs during the recession understandably Pensions can be one of the most expensive parts of the employee benefits packages. They continue to be at the centre of debate across the private and public sector( CIPD 2011) The organisation announced 500 jobs to be cut at head office roles including HR roles in the UK. The announcement of the job cuts gained a fair amount of media attention and the impact that it had on other parts of the organisation in the UK is questionable. Redundancies occur when there has been or is going to be , a cessation of business or a cessation of business at the employees site. Redundancy is one of the most traumatic situations that an employee is likely to experience according to the CIPD. Adverse effects are likely to be recorded on motivation, staff morale, and productivity ( CIPD 2011) Organisations should plan such occurrences and consult employees which is exactly what Vodafone did in the run up to axing jobs in the UK. Although Vodafone did comment that many of the positions were ‘back office’ roles during the recent recession many employers have adopted a wide range of alternatives to redundancy which in turn helped decrease the amount of unemployed people. (CIPD 2011)

The first half of the report acknowledged the fact that Vodafone has a combined Business Level and a Corporate level Strategy. However in many respects this strategy is seemingly evident to have an adverse effect on some of the HRM operations in the company. For example Vodafone embarked on a three year long £1 billion savings programme in the midst of the recession. It seems like Vodafone are trying to fulfil their commitments to stakeholders by ensuring they receive dividend payments and such like, but shunning staff by cutting jobs to complete other financial objectives. This is certainly something to consider as redundancies can be damaging to a workforce in a variety of ways.

The telecommunications industry is a competitive environment internally there is also a high turn over of staff. Making it increasingly important that as much as possible is done to retain good members of staff Vodafone staff turnover is 21% which is relatively low compared to 30% across the retail and customer service industries. (Personnel Today 2007) Vodafone’s HR Director Michael Brearley commented ‘we measure employee engagement by standards set by local measures. We’ve really worked on educating our managers about what it means to be a great Vodafone Leader.(Personnel Today 2007) Our job in HR is to find how to select promote develop and create capabilities for great managers. People join great companies they leave bad managers. (Personnel Today 2007) Taking the above into consideration it is clear that Vodafone recognise how important their front line managers are, especially the role that they play in retaining staff.

Issues In Recruitment – overview

Vodafone has 10,000 employees in the UK, it recruits staff in the following fields retail, technology, marketing, finance and HR. Due to the ongoing economic climate resourcing operations manager Anna Tomkins commented ‘we are always looking at ways to be more effective when we recruit, we have to be focused and deliver what is needed to support the business strategy. Linking the HR objectives with the business strategy demonstrates the fast paced nature of the industry and the relationship between human capital and strategy.

Issues in Commission and Bonuses ( Rewards Benefits)
Paul Chesworth HR Director of Vodafone commented that Vodafone ‘saw flexible working hours, part time and home working as an imperative aspect of job requirements for staff. He acknowledged that they would also still be looking for commitment and productivity likewise. Policies that were promoting flexible working and reasonable work life balances ‘used to be nice to have, now they are a must. Its become a core demand from candidates. Carrington (2005) According to CIPD such working patterns are still in high demand today.

Training is performed a t a residential


Recommendations for the HRM issues that Vodafone face:

Using something other than redundancy to save money – clear impact on motivation and morale. Suggest other ways.

Accommodating for changes in External Environment with in the workforce such as the need for flexible working. Get stats from ONS

Vodafone have 8

·Losing the staff to better paid industries such as banking and estate agency. Good sales people or often required in Re ·Specialist agencies for each sector of business

Recruiting in a Recession

Mobile phone retailer Vodafone has 10,000 UK employees based at its headquarters in Newbury, Berkshire, a number of regional contact centres, and about 350 retail stores. It recruits about 3,000 staff into new positions each year - 2,000 from external candidates, and 1,000 internally. The disciplines covered include customer services, retail, technology, marketing, finance and HR. The economic climate means that looking for value for money is more crucial than ever in all areas of business, but resourcing operations manager Anna Tomkins says that establishing best-value, cutting-edge quality recruitment processes has always been essential in this competitive market. "We are always looking at ways to be more effective in how we recruit," she says. "We have to be focused and deliver what is needed to support the business strategy. This may mean delivering things in a different way to before." Vodafone partners with three firms for recruitment process outsourcing, each of which manages a different aspect of its recruitment process. Alexander Mann Solutions manages specialist and head office roles Adecco handles retail adviser roles and Reed manages recruiting customer service advisers. All have been working with Vodafone for the past four years. This has improved the effectiveness of Vodafone's recruitment systems, says Tomkins, and the company has an ongoing improvement programme designed to encourage partners to deliver the best possible experience for the candidate during the process. "Working with resourcing partners helps us take stock of what opportunities there are to do things more efficiently," she says. "For instance, each partner provides regular activity information and suggests improvements to the process and experience. "Last year, we found we were running a number of assessment centres for roles where we felt this was not the most appropriate approach. By developing and implementing interview skills training for line managers, we were able to give them more confidence to participate in the right type of assessment at the right time. It also helped streamline our approach and improve the candidate experience." The company is also using input from external recruitment specialists to help improve the experience of candidates applying for jobs, and to hone the recruitment skills of line managers. "We are careful not to expect line managers to accommodate too many changes at once and we plan our calendar of improvements around what the business is doing overall," says Tomkins. She believes that while the perspective of external specialists is useful, any findings should be fed back to staff if they are to have an impact. For example, line managers were involved at every stage in a recent initiative to improve their interview skills, and their views and expectations were built into the process.

At Vodafone we are committed to helping you perform at your best and realise your full potential.

Join us and you’ll benefit from regular development reviews to understand your goals, strengths and development areas. You will work with your manager to create your own Personal Development Plan. You will have access to a range of learning experiences including on-the job experience, job rotation, coaching, mentoring as well as online and face to face learning programmes.

Whatever country, area, department or role you work in, you can expect ongoing opportunities that will nurture and develop your talents, bringing out the best in you so that you can help Vodafone be the best it can be. What diversity means to us

Here at Vodafone, we aim to create a working culture that is inclusive to all and believe that having a diverse workforce which reflects our global footprint will help us meet the needs of our globally diverse customers. We do not condone unfair treatment of any kind and offer equal opportunities for all aspects of employment and advancement regardless of race, nationality, sex, age, marital status, sexual orientation, disability or religious or political belief.

Our vision is to have an inclusive culture which respects, values, celebrates and makes the most of the diversity of our people. Therefore, we want people from all walks of life to come and join us in the Vodafone family. We want to attract the best talent there is globally - whoever they are, wherever they come from and whatever professional background and experience they have.

Reference List

Arduino , A 2010 Timeline of mobile technology (Accessed online 12/04/2011)

Baker M Definitions of Corporate Social Responsibility (2010) ( accessed online 12/04/2011)

BBC, 2000 Vodafones Gent The smooth operator ( Accessed online 12/04/2011)

Bilson, J 2010 Criticisms of corporate Social Responsibility ( Accessed online 12/04/2011)

Carrington, L 2005 Theres More to Life than pay, The Daily Telegraph Pg 5

CIPD 2011 Employee Benefits January 2011 PG 23 ( Handout Ed Alport)

CWU 2010 Communication Workers Union (Accessed online 12/04/2011

Grant, M (2007) Contemporary Strategy Analysis: Concepts, Techniques, Applications, 6th Edition", Wiley-Blackwell

Heller, R ( Accessed Online 12/04/2011)

House, M (2011) Daisy Group buys Outsourcery’s Vodafone business ( Accessed online 12/04/2011

Infed 2011 The reflective practitioner, How professionals think in action (Accessed online 12/04/2011)

Jones, G( 2009)Contemporary Management Sixth Edition McGraw Hill London

Johnson, E Vodafone Makes a U turn on strategy (Accessed online 12/04/2011 )

Johnson, G., Scholes, K. and Whittington, R. (1998) ‘Exploring Corporate Strategy’ Text & Cases, 8th Ed, Harlow: Pearson Education

Kerr, A Vodafone Streamlines Organisational Structure 09/10/2010 ( Accessed online 12/04/2011)

Mullins, L ( 2007) Management and Organisational Behaviour FT Prentice Hall

O’reilly, S (2009 )Recruiting in a recession (Accessed online 15/05/2011)

Peacock, L 2009 Vodafone HR chief insists job cuts ( Accessed online 17/04/2011)

Personnel Today 2007 Vodafone does not consider staff retention as an HR Policy ( Accessed online 15/05/2011)

Ray, B 2007 ( Website)Vodafone wont recognise union ( Accessed online 16/04/2011

Senge, P. M. (1990) The Fifth Discipline. The art and practice of the learning organization, London: Random House.

Vodafone (2010) Vodafone Fact Pack (Accessed online 12/04/2011)

White, G Vodafones new strategy should create real growth (Accessed online 12/04/2011)

Withers, P May 2011 Mobile Today Vodafone set up staff bonus scheme following Q1 results (Pg 8)

Vodafone People Engagement (accessed online 12/04/2010)

Appendix 1
SWOT Analysis

STRENGTHS·Very Strong Brand Image·Prominent Market PositionWEAKNESSES·Legal Proceedings·Pressure from Handset Manufactures such as Apple OPPORTUNITIES·Growth of mobile advertising·Increasing 3G penetration·Mobile Transfer market·Growth of Indian telecom market·The SFR deal will allow Vodafone to pay down debt, which, according to Merrill Lynch, will give the company “a huge credit tailwind in a sector starved of credit improvement stories”.THREATS·Intense competition·Saturated/matured markets·Competitors receiving Exclusivity·China Mobile has more subscribers ·MTHR (Mobile Telecommunications Health research) May have a huge impact on industry if research shows negative impacts on health. Appendix 2

PESTLE analysis

External environment analysis.

POLITICAL-Pressure to spread political agenda’s for example Egypt asked to send pro Mubarak texts (Daily Mail 2011)- Role in internet blackouts due to political unrest in Egypt ( Daily Mail 2011)-Supplier to government in UK, Netherlands-Political donations limited to £100,000 in 2008 (Vodafone)-Lobbying in the UK meetings with George Osbourne for retail discussion in 2010-Concern about unwanted contact within the industry ECONOMICAL-Vodafone doubles cost cuts as economy bites in 2009.-Risk of a double dip recession in Europe- Slow growth in the developed world as emerging markets are still showing signs of growth.-Recession cuts package - £1 Billion worth of cuts by march 2011 (Sky News 2009) SOCIAL- Under 18s restricted content and also consideration for religions in other countries- Extremely fast paced environment, Customers wanting to change handsets and providers rapidly.- TECHNLOGICAL-Development of 4g technology and roll out, Technology already in Japan and America. (Parker 2010)- High demand and competition for new handsets and latest Technology. Next big release will be the iphone 5 in 2011 LEGAL-Ofcom are responsible for regulating the industry in the UK- Legal battle in India over unpaid tax bill-Facing legal action over VOIP in 2007 by blocking services such as Skype-Pressure from the European commission about price fixing ENVIRONMENTAL-Issues in China with suppliers omitting harmful fumes from factories. Appendix 3

Stakeholder analysis

StakeholderOwners / Directors of the businessXCEO Gent
Consumer’s / Customer’sX
Media (Newspaper, Magazines, T.V.)
National Government
European Union
Government’s – global / international
Authorities and Regulatory bodies
Associations and Trade bodies
External Communities

Appendix 4

Porters 5 forces

Rivalry Among Existing competitors
The market is dominated by fierce competition, there are several operators world wide that enjoy a large percentage of the global market. In the UK for example Vodafone are now the second largest network due to Orange and T Mobile merging forming Everything Everywhere in 2010.

Threat of New Entrants
The threat of new entrants in this market is moderate. Apple and google have both broken into the telecommunications market as manufactures. In terms of gaining a license and getting the global market penetration that Vodafone enjoy the

Bargaining power of suppliers
Bargaining power of suppliers such as Apple for example is reasonably high as all the networks including Vodafone seek to get exclusivity on I phones and I pads to penetrate the market share in the particular country

Bargaining power of buyers
It is innovative for Vodafone to stock the most innovative upto date products for their customers. Vodafone are also able to reach exclusive deals with manufactures. Although they did lose out to exclusivity to the I phone to O2 on its launch in 2008. In this case the buyer power is particularly weak

Threat of substitute products or services
Substitutes to standard mobile phone service are landlines and other devices using integrated services such as the Samsung Tablet and the Ipad. Although the threat remains relatively low as mobile phones are very much a lifestyle necessity.

Appendix 5

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