Vodafone External Environment
SOO CHUNG KIAN
EXTERNAL ENVIRONMENT:
Industry Environment by using Porter’s Five Forces Figure 1: Porter’s five forces model
Porter’s five forces analysis is a framework that is used for the industry analysis and business strategy development. This analysis determines the competitive intensity and therefore attractiveness of a market. A change in any of the forces normally requires a company to re‐assess the marketplace.
Rivalry
The competition between operators and the rivalry are high. These competitors want as much of the market share as possible.
Switching costs for consumers are low, so operators are easily attract them through lower pricing and better service offerings. With a low level of product differentiation and this further brings up the level of rivalry.
Substitutes
There is a low threat of product substitutes. Substitute products for the mobile phone industry could be considered fixed-line phone products. Switching costs are low but the advantage goes to the mobile phone industry because there is a greater chance of switching to mobile phones from fixed-line phones than the other way around.
Buyers
The threat of buyers can be considered low. The individual buyer has no impact on the price of the products or services offered. Buyers will look out for higher quality, greater levels of service, and lower prices offer by operators.
Suppliers
Supplier’s power in some aspects is high. Suppliers can have a big impact on the price of products and the condition of the deal they make with the provider. Indicatively, Vodafone’s global presence means it has significant purchasing power allowing it to secure exclusive deals with phone manufacturers. Yet Vodafone is keen to develop its own, branded phones in an attempt to break the power of Nokia on the market, thus at the same time reducing the firm’s dependence and making its offerings more complete.
New Entry
In the industry that is highly regulated and protected by significant
EXTERNAL ENVIRONMENT:
Industry Environment by using Porter’s Five Forces Figure 1: Porter’s five forces model
Porter’s five forces analysis is a framework that is used for the industry analysis and business strategy development. This analysis determines the competitive intensity and therefore attractiveness of a market. A change in any of the forces normally requires a company to re‐assess the marketplace.
Rivalry
The competition between operators and the rivalry are high. These competitors want as much of the market share as possible.
Switching costs for consumers are low, so operators are easily attract them through lower pricing and better service offerings. With a low level of product differentiation and this further brings up the level of rivalry.
Substitutes
There is a low threat of product substitutes. Substitute products for the mobile phone industry could be considered fixed-line phone products. Switching costs are low but the advantage goes to the mobile phone industry because there is a greater chance of switching to mobile phones from fixed-line phones than the other way around.
Buyers
The threat of buyers can be considered low. The individual buyer has no impact on the price of the products or services offered. Buyers will look out for higher quality, greater levels of service, and lower prices offer by operators.
Suppliers
Supplier’s power in some aspects is high. Suppliers can have a big impact on the price of products and the condition of the deal they make with the provider. Indicatively, Vodafone’s global presence means it has significant purchasing power allowing it to secure exclusive deals with phone manufacturers. Yet Vodafone is keen to develop its own, branded phones in an attempt to break the power of Nokia on the market, thus at the same time reducing the firm’s dependence and making its offerings more complete.
New Entry
In the industry that is highly regulated and protected by significant
References: Books Gelder. D & Woodcock. P, Marketing and Promotional Strategy (2003). Nelson Thornes Jobber. D & Fahy. J, Foundations of Marketing 2nd Edition (2006), McGraw-Hill Education Lynch. R, Corporate Strategy 4th Edition, (2006), Pearson Education Limited Websites www.vodafone.co.uk http://tutor2u.net/revision_notes_strategy.asp Vodafone Group Plc, Annual Review and Summary Financial Statement (2007), Newbury, London