Professional Documents
Culture Documents
OF
STRATEGIC MANAGEMENT
STRATEGIC AUDIT
VODAFONE
SUBMITTED TO:-
Mr. Amit Kumar Lal SUBMITTED BY:-
ARUN KUMAR GULERIA
Section T1801
Roll No. RT1801A02
Program Code: 194
Reg. No. 10807166
Also I would like to express my inner feeling for all the people for co-operating and
helping me throughout the project.
Last but not the least I am thankful to my parents and friends who have provided me
with their constant support throughout this project.
Arun Guleria
Vodafone has various product categories ranging from chargers, internet, mobile phones,
headsets & headphones & many more. In the service category it has internet services which
include broadband internet & PC internet services.
Apart from the products & services normally offered they also came out with some
interesting & unique product like the i phone. This was one of the biggest events in the
history of Indian telecom industry. The phones were available at around Rs. 32000-36000
which has a unique feature called as 3G system.
Vodafone also came out with cell phones for the poor which were a part of their social
responsibility toward the poor class people of the society. The phones were available in the
range of 1000 Rs -1500 Rs which was one of the successful strategies of Vodafone.
According to the 2002-2008 data VODAFONE captures the market with 17.56 % & is at the
3rd position just after Bharti with 24.69% & Reliance with 17.68%.
Vodafone also came out with one of best& most attractive advertisement which no one has
ever seen before called as “VODAFONE ZOO-ZOO’S”. This advertisement was a part of
VODAFONE’S marketing strategy to boost its sales during the IPL 2 season. This was one of
the master moves by VODAFONE to introduce ZOO-ZOO during the IPL 2 season which
was a “SUPER-HIT”.
VODAFONE is planning to come with its own accessories stores which would be a one-time
shop for its customers wherein the customers will get all the products under one roof.
Vodafone’s future plan is to become no.1 telecom company by the year 2010-2011 which
does not seems to be very difficult keeping in mind the progress it has made in the last 5
years.
Vodafone is the largest player in the European mobile telephony market through its newly
acquired assets and organizational expertise. Vodafone has a high gross margin and profit
margin when compared to its competitors, making more money per customer than its
competitors, with more customers than its competitors. Across the board, profit margins are
decreasing at an increasing rate. In a fast cycle market such as the mobile phone industry it is
important to stay ahead of the curve and constantly improve and search for better ways to
accomplish the same goal at a low cost. Vodafone is also the official sponsor of the England
Cricket Team for the Npower test series . It has also shaken hands with the most popular
football tournament UEFA CHAMPIONS LEAGUE football which is a part of the
promotional strategy of Vodafone
As a result common man today has access to this most needed facility. The reform measures
coupled with the proactive policies of the Department of Telecommunications have resulted
in an unprecedented growth of the telecom sector.
According to TRAI, by the end of February, the total number of subscribers had reached 413
million. Of this, 91% were mobile phone subscribers. The rising number of subscribers has
pushed the tele-density to 35.62% showing a stupendous annual growth of about 50%, one of
the highest in any sector of the Indian Economy. Also industry estimates show that telecom
industry in India will witness a compound annual growth rate (CAGR) of 26% to reach 3,
44,921 crore by 2012. It is set to generate employment opportunities for close to 10 million.
India’s telecom sector has shown massive upsurge in the recent years in all respects of
industrial growth. From the status of state monopoly with very limited growth, it has grown
in to the level of an industry. Telephone, whether fixed landline or mobile, is an essential
necessity for the people of India. This changing phase was possible with the economic
development that followed the process of structuring the economy in the capitalistic pattern.
Removal of restrictions on foreign capital investment and industrial de-licensing resulted in
fast growth of this sector.
At present the country’s telecom industry has achieved a growth rate of 14 per cent. Till
2000, though cellular phone companies were present, fixed landlines were popular in most
parts of the country, with government of India setting up the Telecom Regulatory Authority
of India, and measures to allow new players country, the featured products in the segment
came in to prominence.
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The huge potential offered by the untapped rural market will help push growth for telecom
operators in the years to come. At present, rural India accounts for just 27% of the country’s
cellular base, though it constitutes 70% of the population.
Vision
To enrich our customer's lives through the unique power of mobile communication Our
Vision is to be the world’s mobile communication leader – enriching customers’ lives,
helping individuals, businesses and communities be more connected in a mobile world
Board of Directors:
1. Sir John Bond (Chairman)
2. Vittorio Colao (CEO)
3. John Buchanan (Deputy Chairman)
4. Andy Halford (CFO)
5. John Buchanan
6. Andy Halford
7. Michel Combes
8. Alan Jebson
9. Samuel Jonah
10. Nick Land
11. Anne Lauvergeon
12. Simon Murray
13. Steve Pusey
14. Luc Vandevelde
15. Tony Watson
16. Philip Yea
The name Vodafone comes from voice data fone, chosen by the company to "reflect the
provision of voice and data services over mobile phones".
Vodafone owns 45% of Verizon Wireless, the largest wireless telecommunications network
in the United States, based on number of subscribers.
It is listed on the London Stock Exchange, where it is a constituent of the FTSE 100 index.
Previously Vodafone was listed on New York Stock Exchange, but later it indented to
transfer the listing of its American Depositary Receipts, each representing ten ordinary shares
of its company, from NYSE to NASDAQ. However, it would keep listing its debt securities
on NYSE.
Vodafone’s original logo used until the introduction of the speech mark logo in 1998.
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By the time of Hutchison Telecom's Initial Public Offering in 2004, Hutchison Whampoa had
acquired interests in six mobile telecommunications operators providing service in 13 of
India's 23 licence areas and following the completion of the acquisition of BPL that number
increased to 16.
In a country growing as fast as India, a strategic and well managed business plan is critical to
success. Initially, the company grew its business in the largest wireless markets in India — in
cities like Mumbai, Delhi and Kolkata. In these densely populated urban areas it was able to
establish a robust network, well known brand and large distribution network -all vital to long-
term success in India. Then it also targeted business users and high-end post-paid customers
which helped Hutchison Essar to consistently generate a higher Average Revenue Per User
("ARPU") than its competitors. By adopting this focused growth plan, it was able to establish
leading positions in India's largest markets providing the resources to expand its footprint
nationwide.
In February 2007, Hutchison Telecom announced that it had entered into a binding agreement
with a subsidiary of Vodafone Group Plc to sell its 67% direct and indirect equity and loan
interests in Hutchison Essar Limited for a total cash consideration (before costs, expenses and
interests) of approximately US$11.1 billion or HK$87 billion.
2000: Acquisition of Delhi operations Entered Calcutta and Gujarat markets through ESSAR
acquisition
2001: Won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and
Chennai
2003: Acquired AirCel Digilink (ADIL — ESSAR Subsidiary) which operated in Rajastan,
Uttar Pradesh East and Haryana telecom circles and renamed it under Hutch brand
2004: Launched in three additional telecom circles of India namely 'Punjab', 'Uttar Pradesh
West' and 'West Bengal'
2005: Acquired BPL (Except Mumbai)- 3 Circles, another mobile service provider in India
2008: Vodafone acquired the Licence in remaining 7 circles and has started its pending
operations in Madhya Pradesh/Chhattisgarh with its headquarters at Malviya Nagar,
Bhopal as well as in Orissa, Assam, North East and Bihar
2008: Vodafone launched the Apple iPhone 3G to be used on its 17 circle 2.75G network.
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2009: Vodafone Essar - 1st Indian Telecom operator to receive the Payment Card Industry
Security Standard (PCI DSS) certification for its Mumbai operations and launches unlimited
SMS offer in Mumbai.
2010: Vodafone emerged as the most admired marketer in India. 2010: Vodafone crossed 100
million subscribers in India.
SUBSCRIBER BASE:
The Vodafone subscriber base according to COAI - Cellular Operator Association of India as
of March 2010 was:
Delhi - 3,216,769
Mumbai - 3,451,567
Chennai - 2,174,589
Kolkata - 2,974,177
Maharashtra & Goa - 2,610,389
Gujarat - 6,010,594
Andhra Pradesh - 2,601,458
Karnataka - 2,850,346
Tamil Nadu - 3,180,820
Kerala - 3,001,133
Orissa - 520,772
Punjab - 3,645,501
Haryana - 1,282,208
Himachal Pradesh – 1,21,452
Uttar Pradesh (West) - 2,858,429
Uttar Pradesh (East) - 3,508,355
Rajasthan - 3,934,598
West Bengal & Andaman and Nicobar - 4,825,310
The total is 5,27,68,467 or 24.93% of the total 25,23,55,939 GSM mobile connections in
India till March 2010.
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Bharti Airtel
Airtel is providing cellular services in Delhi, Mumbai, Kolkata, Chennai, Andhra Pradesh,
Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala, Madhya
Pradesh, Maharashtra, Goa, Orissa, Punjab, Rajasthan, Tamil Nadu, UP and West Bengal.
Airtel is the No.1 cellular service provider in India using GSM technology. Airtel has 23%
market share in India with a total subscriber base of 38 million.
Reliance Communications
Reliance has both CDMA and GSM networks and total subscriber base of 29 million or 17%
market share. It has GSM network in Assam, Bihar, Himachal Pradesh, Kolkata, North East,
Madhya Pradesh, Orissa and West Bengal. Reliance has CDMA networks in other states and
cities.
Vodafone
Vodafone is another emerging GSM provider in India with coverage in Kerala, Mumbai,
Delhi, Kolkata, Chennai, Gujarat, Andhra Pradesh, Karnataka and Punjab with a total
subscriber base of 27 million.
Tata Indicom
Tata Indicom is a main CDMA provider in India with 16 million subscribers all over India.
Tata Indicom has presence in almost every state and cities in India.
1. Future objectives
Vodafone, unlike its competitors, focused exclusively on the mobile telephony market.
Vodafone believed that fixed-line operations would be a distraction from being a pure
wireless operator. This exclusive focus allowed Vodafone to offer sale and rental of mobile
phone handsets, transmission of both mobile voice and data, and support a wide range of
products and a variety of payment systems. Vodafone, unlike its competitors, had a focus
strategy.
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Vodafone has an aggressive mobile telephony strategy as evidenced by being the first digital
service provider for mobile telephony. Additionally, they were heavily investing in
international expansion through acquisitions and alliances. Through their continued focus on
wireless, Vodafone wanted to be the technological leader of the industry through the
development of the first digital mobile wireless network in Europe and the development of
new methods to send voice and data over the network. These examples show that Vodafone
was not afraid of risk.
2. Current Strategy
Vodafone faced its competitors through the use of a focused strategy. This strategy allowed
Vodafone to produce services that service the entire mobile telephony segment. Vodafone’s
strategy actively targeted all mobile telephone users in and around their market areas. Their
strategy of producing services to the entire telephony segment had been maintained and
updated with the changing technology in the mobile world.
3. Capabilities
Vodafone's strength is its new operating structure. Because Vodafone was a new company,
their cost structure was much lower than the incumbents. The incumbents did however enjoy
a billing relationship with the customer already in place. Vodafone could also focus sharply
on its primary market, mobile telephony, while all of its competitors would have to focus on
their fixed-line operations as well.
Despite the fact that the European Union was consolidating into a single market, Vodafone
did not have high market shares in EU countries, suffering the effects of Orange, an
innovative new entrant quickly gaining market share. Vodafone was growing quickly
however, allowing their strengths in technology and acquisitions and mergers to maintain its
nearly 65 percent growth.
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INTERNAL ENVIRONMENT
Vodafone’s strongest resources were their intangibles such as human resources, innovation,
and knowledge which put them a step ahead of their competitors. By definition these
resources are more costly and hard to imitate. These resources are rooted deep in the
company’s history by staying focused in mobile markets and not diversifying into other
technology categories that would loose the company’s primary focus and drive through its
core competencies. As the company grew to be the largest in the industry, they remained
focused on the leading edge of mobile technology.
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4. Capabilities
Vodafone's capabilities are their ability for management to complete successful acquisitions
and their research and development to enable innovative technology. Vodafone's
management has the ability to acquire and merge with other companies while maintaining an
effective, low cost, organizational structure. Through their research and development,
Vodafone is able to maintain technological leadership in mobile telephony systems.
5. Core Competencies
Vodafone's capabilities in management and research and development should also be
considered their core competencies because these abilities give them a source of competitive
advantage over its rivals. Acquiring and merging with companies has allowed Vodafone to
grow their customer base internationally. By investing in research and development, next
generation platforms for mobile telephony for both voice and data allow Vodafone to
maintain a competitive advantage.
Does Vodafone have a sustainable competitive advantage?
(Sky Huvard)
Only using valuable, rare, costly-to-imitate, and non-substitutable capabilities create
sustainable competitive advantage. Vodafone had valuable, rare, costly to imitate capabilities,
but these capabilities were substitutable, thus, they had a temporary competitive advantage.
However, if
Vodafone finds a way to successfully differentiate itself to become non-substitutable, it will
have a sustained competitive advantage. This temporary competitive advantage has
performance implications of average returns to above-average returns.
(d) Non-substitutable - No
Vodaphone's mobile telephony is substitutable, as evidenced by the high turnover throughout
the industry.
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According to the data of the Central Bank of Egypt, net FDI amounted from USD 3.9 billion in FY
2004/05 to USD 6.1 billion on FY 2005/06.
- Egypt represents a low cost base, especially after the local currency was floated in 2003. Egypt has a
skilled and competitively cost-effective human resources pool.
Technological
- Government sponsored human development programs supply the market with more IT professionals
every year, adding to the over 27,000 professionals in IT, Communications and networks. In addition,
more than 140,000 Egyptians have completed the government-sponsored IT Basic Training program,
which provides training in the use of computers with the aim of making IT a part of daily life.
- In line with the turn of a new decade, the Egyptian Government initiated an ambitious modernization
plan where its capital of human competencies is set as a first priority and the communications and
information technology stands as the key pillar. Stemming from this concept, Smart Villages
Company was founded on a Public-Private-Partnership investment model, with 80% ownership to the
private sector and 20% to the Ministry of Communication and Information Technology.
Political legal
- Egypt is currently undergoing a political and constitutional process of modernization, the most
extensive in its modern history yet to be carried out. President Mubarak on Thursday 5/4/2007 issued
a Republican decree putting in force the constitutional amendments after having been approved by the
mass referendum. The amendments are considered valid starting from the day of announcing the
outcomes.
The amendments included 34 articles on citizenship, economy, political parties formation, public
ethics, property, trade unions, elections, State budget, and prerogatives of the Republic's President,
and others.
- Reducing income, corporate taxes, and custom duties of course helps further investments. The
Egyptian government has passed several laws with the aim of smoothing the way for investors in the
ICT industry in Egypt.
Socio-cultural
- Egypt has a population of more than 71 million. About 65% of Egyptians are under the age of 25,
and more than 15 million young Egyptians are currently in education (primary, Secondary and
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More than 16,000 Egyptians graduate each year from technical universities, more than a third of
whom speak two or more languages.
SWOT Analysis
Provide a summary SWOT analysis and a statement of problems facing the company. What
are your recommended solutions to these problems? Be sure to explain how the solutions
should be implemented.
(Sky Huvard, Lindsay Zolad)
Strengths
Experience and knowledge in the mobile phone business.
Multi-market and multi-structure outlook on the mobile consumers and the many
markets in which they are present.
Strong ability to manage change and acquisition.
Research and development.
Immense market power, twice as big as nearest competitor.
Weaknesses
Managerial resources thin due to rapid growth and numerous acquisitions.
Low market power in Europe.
Opportunities
Restructuring and smaller acquisitions than Mannesmann.
Acquisition of Mannesmann to dominate many markets with economies of scale.
Threats
Undervaluing them by overvaluing Mannesmann.
Management can be overly focused on acquisitions.
Low differentiation.
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2. Liquidity Ratios
Vodafone was less liquid than its competitors, on average and individually between 1996
2000 because they maintained lower inventory levels as a percentage of working capital.
Vodafone is cash and receivables poor relative to its short term obligations, but those
obligations are miniscule compared to their total portfolio. Vodafone has traditionally
operated with low liquidity and less inventory than its competitors, and has maintained above
average profitability.
3. Leverage Ratios
In 2000, Vodafone was more aggressive than most in assuming debt to fuel growth. Between
1997 and 1999, debt ratios were above industry averages. Vodafone is in a position to
leverage itself for further growth. Acquisitions and their subsequent returns have given them
massive retained earnings and very little debt.
4. Activity Ratios
Industry turnover was second best in the industry. For Vodafone to maintain above-average
leverage ratios, it had to be significantly more efficient than its competitors economies of
scale. Average collection period and accounts receivable turnover was second best in the
industry. Total asset turnover was twice that of the industry average, and best in the industry.
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1. Connectivity:
Get a great signal at home - without leaning out of the window - thanks to the Vodafone
access gateway. The gateway simply plugs into your broadband line, boosting your 3g signal
right through your home. It's also small, so you'll hardly notice it's there. Want to share your
signal with friends and family?
Get a great signal at home - without leaning out of the window - thanks to the vodafone
access gateway. The gateway simply plugs into your broadband line, boosting your 3g signal
right through your home. It's also small, so you'll hardly notice it's there. Want to share your
signal with friends and family?
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Talk in your car - while your hands stay firmly on the wheel. The vodafone car cradle is
designed for any handset. Just attach the suction cap to your windscreen, or clip the cradle to
your air - vent. No mess. No tools. No hassle. Once the cradles attached, twist the bendy arm
for the perfect position. It's as easy as that. Simple and safe, the must-have accessory is, at
just rs.567, very affordable too.
SERVICES:
Vodafone’s new telecoms management service - simplifying the management of fixed and
mobile telecoms services.
INTERNET:
- MOBILE BROADBAND:
MOBILE BROADBAND VIA YOUR PHONE
Feel the freedom. Use the internet your way – with full access to voip services like
SKYPE™, and peer to peer services like file sharing.
With mobile broadband via your phone, you get a whopping 5 gb each month. Simply use
your phone as normal – and if you have a 3g phone, connect it to your laptop to turn your
phone into a broadband modem. Add mobile broadband via your phone – for rs. 1440 a
month
- HOMEBROADBAND:
Vodafone home broadband gives you high-speed internet access and inclusive anytime
landline calls for just 812 rs a month.
With no hidden catches, our customers say its better value than their previous home
broadband package.
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On January 21st 2003, the Vodafone Group announced that it had acquired the remaining
6.2% interest in Vodafone Spain for approximately 1.4 billion pounds. The transaction
completed on January 27th 2003, at which time Vodafone Spain became a wholly owned
subsidiary of the Group.
In the first half of the financial year ending March 31st 2005, the Group increased its
effective shareholding in Vodafone K.K. to 98.2% and its stake in Vodafone Holdings K.K.
to 96.1% for a total consideration of 2.4 billion pounds. On October 1st 2004 the merger of
Vodafone K.K. and Vodafone Holdings K.K. was completed, resulting in the Group holding
a 97.7% stake in the merged company, Vodafone K.K.
2. Strategic Shifts
Arun Sarin became Chief Executive of Vodafone and implemented a new strategy. “We
believe Vodafone is uniquely positioned to succeed through our scale and scope and the
customer focus of all our employees.” To achieve this success, Vodafone has focused several
strategic goals, including, delighting their customer, leveraging their scale and scope,
building the best global team, and expanding market boundaries.
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Indian mobile services continued its fast northward march in terms of subscriber base growth
with GSM operators collectively managing to add over 13 million subscribers in the month of
February, 2010.
The month also saw the GSM subscriber base of the country scaling past the 400 million
mark (results released by COAI do not take into account subscriber base of dual tech
operators RCom and TTSL) with the subscriber base at 407.91 million subscribers.
Vodafone Essar overtook market leader Bharti Airtel in adding the highest number of new
subscribers. It added 3 million subscribers as compared to Airtel’s 2.9 million. Aircel added
1.8 million subscribers while PSU BSNL added 1.5 million. Idea Cellular added 2.25 million
subscribers while new entrants Uninor and S Tel added 1.01 million and 0.21 million
subscribers respectively.
Circle-wise category ‘B’ circles added the highest subscribers with 5 million new subscribers.
Seven forest officials have been suspended in connection with the case filed against
Vodafone Essar South Limited for laying cables without permission in two wildlife
sanctuaries in Madhya Pradesh.
"Seven forest officials were suspended yesterday for negligence of duty and a case was
registered against Vodafone Essar South Limited Company under Forest Conservation Act,
following a probe which found that the telecom company had undertaken illegal digging and
cable laying work in Ratapani and Singhori sanctuaries between August and October,"
officials informed on Thursday, Dec 10.
A ranger was one among the seven officials suspended. The officials also said that show
cause notices have been served upon R K Dixit and C S Dubey- superintendents of Ratapani
and Singhori sanctuaries respectively.
An NGO called Prayatna lodged a complaint with the Madhya Pradesh Forest Minister Sartaj
Singh in Nov 2009 following which a probe was started.
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Taking a cue from the growing demand for mobile access to the Internet, Vodafone unveiled
its web service that integrates social networks, contacts and entertainment.
The Vodafone 360 service that comes as a move to counter the competition from Apple,
Google and Nokia, was announced on Thursday, Sep 24.
World's leading mobile phone operator said that the service would be launched on tailor-
made Samsung phones and four Nokia phones in eight European countries by Christmas.
The new Vodafone 360 service would use Limo, an open source operating system. The users
will be able to download the service and choose a suitable data plan.
Vodafone Group, the global cell phone major on Tuesday, May 19 reported 16.7 pc increases
in operating profit (11.8 billion pound) for the year ended Mar 31 on higher revenues from its
new leading markets, mainly India.
In the financial year 2008, Vodafone's profit stood at 10.07 million pound. Company said in a
statement that it witnessed 15.6 per cent jump in revenues at 41 billion pound for the year
ended March 31 against 35.47 billion pound in the FY 2008.
"These results demonstrate the impact of the early actions we took to address the current
economic conditions and highlight the benefits of our geographic diversity. The business
continues to generate cash strongly and we have made good progress in implementing the
strategy announced in Nov (2008)," Vodafone Group Plc Chief Executive Vittorio Colao
said.
The company's revenues in India stood at 2.68 billion pound, while from the entire Asia-
Pacific region revenues were at 5.81 billion pound for the fiscal 2009, the statement said.
"We have continued to drive penetration in India, generating strong revenue growth from our
brand and commercial offers and a substantial investment in network coverage, Calao said.
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Qatar's first hybrid-powered mobile base station has been launched by Vodafone
Qatar, using Alcatel-Lucent technology to harness both wind and solar energy.
The trial site in Qatar makes uses of an ‘energy controller' that can simultaneously draw
power from both photovoltaic panels and wind turbines. This means that, based on solar
intensity and wind speed, it can make the most of the two sources' fluctuating availability at
every second. The station is expected to make the best of local weather conditions, while
reducing costs and improving maintenance quality in remote sites.
"As the first hybrid solution in Qatar to make use of wind and solar energy, this achievement
increases the availability and quality of mobile services to the end customer, while reducing
the impact on the environment. What's more, it is one of the most innovative and best-
performing solutions that we have tested so far in Vodafone," said Jenny Howe, CTO of
Vodafone Qatar.
The launch is part of Vodafone Group's efforts to deploy green energy sources to its affiliates
around the world. It's not the first time a green mobile station has been deployed in the
Middle East however; Turkish mobile network operator Avea announced it was using solar
and wind energy to power one of its base stations in April last year.
The eco-friendly solution used in Qatar was provided by Alcatel-Lucent's Alternative Energy
Program, which aims to equip more than 100,000 mobile base stations with alternative
energy solutions before 2012. It's expected to help reduce 7 million tonnes of CO2 emissions
a year.
"Alcatel-Lucent is absolutely convinced that business has a critical role to play in the
transition to a low-carbon economy. And for us this means both reducing the CO2 emissions
from our own operations and providing energy efficient solutions to our customers. This trial
marks an important milestone for our industrial solution. It also further strengthens our
relationship with Vodafone by giving us the opportunity to combat global climate change
together," stated Marc Kassis, head of Alcatel-Lucent business in Qatar.
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"This is a significant achievement for us and reflects the trust customers have bestowed on
the company," said Marten Pieters, Managing Director and CEO, Vodafone Essar.
"In the past three years, we have invested over Rs. 20,000 crores to expand our operations to
service customers in India. We will utilize our global and Indian experience to deliver the
best products and services to our customers."
Starting with about 28 million subscribers across 16 circles in May 2007, Vodafone Essar
today has 100 million customers and its footprint has extended to all the 23 circles in the
country.
"In addition to voice and text, Vodafone will also work on investing in platforms that will
enable the delivery of internet and data services to a large part of the country. Vodafone will
also continue to increase investments in new business areas like enterprise and carriers
business," Pieters added.
Around 60pc of the company's customer additions now come from upcountry areas.
Vodafone has a distribution reach of about 1.2 million outlets.
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Pros:
- increase both market share and ARPU
- boost brand image as the technology leader
Cons:
- risk of not generating the anticipated returns on the heavy investment
b) Stability: Pause: monitor other developments in the market and proceed accordingly.
Pros:
- avoid the risk of failure of the new 3G technology in the local market
Cons:
- miss the first mover advantage if 3G takes off
b.) Competitive: Cost leadership: by relying on Vodafone Group economies of scale and
by outsourcing strategically unimportant activities.
Pros:
better control over our costs
Cons:
imitation by competitors
c.) Cooperative: Strategic Alliances: with Telecom Egypt (TE) to introduce new joint
services to the market.
Pros:
stronger market foothold
Cons:
difficulty to overcome the government mentality dominating TE management
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b.) Purchasing: effective coordination with Vodafone Group supply chain and partnering
with major suppliers.
c.) Human Resources: retain and develop talents through offering continuous
development opportunities, setting fair and consistent career advancement criterion,
and building strong corporate culture.
d.) Sourcing: outsource activities with low contribution to our competitive advantage
(e.g. IT Application Development & Maintenance).
e.) Operations: go for Enterprise Resource Planning (ERP) to help better aligning the
marketing, customer service, sales and finance areas, and use Point Of Sale (POS) in
our stores to facilitate bill payment and recharges.
RECOMMENDED STRATEGY
On the corporate level:
Growth: Concentration: Horizontal growth: to create additional revenue streams by
introducing the new 3G services.
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An unattractive industry has low entry barriers, suppliers and buyers with strong bargaining
positions, strong competitive threats from product substitutes, and intense rivalry among
competitors. The mobile telephone industry has high entry barriers and a low threat of
product substitutes, but these attractive forces do not sufficiently offset the threats posed by
the strong bargaining position of suppliers and buyers in combinations with the intense
rivalry competitors face.
Vodafone was in a superior financial position compared to its competitors, with substantial
assets and high operational efficiency. Vodafone is the largest player in the European mobile
telephony market through its newly acquired assets and organizational expertise. Vodafone
has a high gross margin and profit margin when compared to its competitors, making more
money per customer than its competitors, with more customers than its competitors. Across
the board, profit margins are decreasing at an increasing rate. In a fast cycle market such as
the mobile phone industry it is important to stay ahead of the curve and constantly improve
and search for better ways to accomplish the same goal at a low cost. By being first-mover,
Vodafone can retain high price points and profit margins compared to its competitors.
Over the years the Group has made excellent progress in executing against their strategic
goals however Vodafone is still looking to improve and remain innovative. They have
restructured the business to more closely align themselves to their strategic goals and have
outstanding and passionate leaders and people in the organization to deliver them. Their
commitment to deliver on their goals is supported by their values, which state that
“everything they we do is driven by our passion for customers, our people, results and the
world around us.”
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BOOKS
1. Pearce II, J.A., Robinson Jr., RB and Mital, A., Strategic Management: Formulation,
Implementation and Control, 10th Ed., Tata McGraw-Hill, New Delhi, 2008
2. Mital, A., Cases in Strategic Management, Tata McGraw-Hill, New Delhi, 2008
INTERNET
1. “Call Alert: Vodafone Seen as a Takeover Target.” The Economic Times. May 3,
2006.
http://economictimes.indiatimes.com/articleshow/1515104.cms
3. “Significant Transactions for the Year Ended.” Vodafone Group. Mar 1, 2010.
http://www.vodafone.com/article/0,3029,Category_ID
4. “Telecom Giants have Different Branding Strategies.” Intangible Business. Jan 25,
2009.
http://www.intangiblebusiness.com/Content/1194
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