ASSIGNMENT

Vodafone: Case Study



Table of Contents

Introduction1

PESTEL1

Political Factors1

Economic Factors1

Social factors2

Technological Factors2

Environmental Factors3

Legal Factors3

Key Drivers of Change3

Michael Porter's Five Force's Analysis4

Threat of Entry4

Threat of Substitutes4

Competitive Rivalry4

Bargaining Power of Customers5

Bargaining Power of Suppliers5

Strategic Capabilities6

Human Resources6

Financial Performance6

Physical Resources7

Core Competences7

Value Chain8

Primary Activities8

Support Activities9

Recommendation9

Conclusion10

References11

Vodafone: Case Study

Introduction

The telecommunication industry is very competitive globally. The United Kingdom has ended the monopoly of British Telecom (BT) and now the competition is open to a number of players like Vodafone and Telefonica O2. Vodafone is competing heavily with several players in the industry to make its place in the market. This paper discusses the strategic position of the company, Vodafone, and furthermore, their PESTLE analyses, porter's five forces analysis will be discussed in this paper to further evaluate the Vodafone standings. This paper also discusses the value chain for Vodafone and discusses the strategic implications out of it.

PESTEL

Political Factors

The regulations related to mobile licenses are tightly controlled in UK. Furthermore, the usage of mobile phones by children and possible health concerns with it may pose political pressure. The infrastructure development needs approval from the government and permission to use land from the statutory bodies. Government has privatized the national telecom company BT through Ofcom. The monopoly of BT is no longer there, and competitive rates now define the market players (Case study: pp.588).

Economic Factors

The UK is still recovering from the financial crisis of 2008; the recovery has been slower than other countries. The case study illustrates personal disposable income growth in the period between 2002 to 2007; however, the current situation indicates the opposite of it. The household income is decreasing in UK (NewStatesman, 2011; Mail Online 2011). The less disposable income is not a good sign for mobile operators. Furthermore, the bidding of 3G was done at the time of economic boom, and therefore, the cost paid was high, which means higher prices for consumers.

Social factors

The consumers are increasingly finding convergence of fixed telephony, television, broad band and mobile telephony (case study pp. 558). This presents a good opportunity for mobile operators to offer bundle services and create switching costs for their customers (Aker, 1992). However, another visible trend is the decreasing use of fixed lines and switching to mobile only users. This opportunity can also be availed by the companies by catching these switching customers.

One threat in the realm of social factors is the demographics of developed countries like UK where the population aging fast and the teenagers are decreasing in number who is more adaptable to technology and care for new product developments.

Technological Factors

The technology is evolving faster than ever. The advancement in technology is reducing the cost and increasing the effectiveness in hand with efficiency. The new product development includes Internet Protocol (IP) for data, video and voice over internet protocol (Case Study pp. 557). However, the increasing pace of developments in technology is also a threat. The companies are increasing evaluating the payback period s for technology and their life. The technology is often obsoleted by new arrivals which are acquired by ...