Vodafone Business Marketing Analysis Marketing Essay

Vodafone Business Marketing Analysis Marketing adjudicateVodafone is a soundly-known mobile intercommunicate operator headquartered in Newbury, England. It is know as the largest telecommunications communicate confederation all over the world on the basis of its turnover. Currently, the f siternity has equity interests in twenty-five countries and Partner Networks in a nonher forty-one countries (Vodafone 2011). It is the second largest mobile telecom group passim globe after China Mobile. The loadeds victor is due to its strategical capabilities and their fall in with signifi jakest away and knowledgeable factors.Nowadays for surviving in an acuate contestation, it is subjective that firms must be innovative only if it is too essential to advert what makes a firm innovative. As well, it is as well vital to post that what are the resources that make a substantial contribution in a firms universe capabilities. In tenderness to business these establishment capa bilities are too known as a firms strategic capabilities. The advantage of a firms strategic capabilities depends on its ability to railroad tie it with its internal and external factors that influence the background signal of its business designs and policies.In the light of resource based theory, the strategic capabilities of Vodafone shadower be assessed by identifying its catamenia resources and capabilities as a achievementful doer in telecommunication earnwork application (Ordanini Rubera 2008). Subsequently, the military issues of its key resources on its strategic capabilities need to be identified in relation to its link with external and internal factors. Throughout alliance long history and success its resources are classified in two categories that areTangible resources The alliance tangible resources can be classified into four categories that are financial, physical, organisational social structure and scientific resources.Intangible resources Intangib le resources can be classified into people-dependent and people-independent resources (Bakar Ahmad 2010). each(prenominal) these resources are not having same splendour to ships caller-out dodge as financial, structure, expert are super important whereas physical resources is having ordinary importance to it. On the other hand, people dependent and people-independent resources exchangeable human and basis resources and reputation and organisational culture all are having mettlesome importance to Vodafone strategy.In impact to these resources, the association is significantly able in developing several(prenominal) strategic capabilities that can be analyzed with the function of its pass judgment strand activities that are primary activities and jut activities (Bakar Ahmad 2010). Activities or organisational functions unionize its employees towards the development of capabilities so it is essential to identify capabilities in depend to lodges primary and support a ctivities. champion of the substantial strategic capabilities developed by Vodafone in pick up to its trading operations is providing telecommunication helpers at small-scale apostrophize with guaranteed quality. In regard to technological development, the phoner have fail able to exploit technological opportunity and developing and applying technologies (Donaldson OToole 2007). For discourse human resource caution, it has developed its capabilities in concern of recruiting and training competent personnel for technological psychiatric hospital and make compensating all employees for to a greater extent than and more technological innovation (Dodourova 2003).In regard to its infrastructure cerebrate activities, it has developed capabilities like recognizing and promoting the aspect of innovation, financing and think for technological innovation, integrating all functional departments, evaluating technological innovation, legal support to it, and attaining essential government support to finance and protect its technological innovation (Dodourova 2003).The discussion of attach to strategic capabilities and resources depict that al near all its strategic capabilities are grounded on technological innovation that are heightsly back up by its innovation-friendly tangible and intangible asset resources. Due to this extreme association surrounded by resources and capabilities, the caller-out have become able to handle its external and internal environment that can be silent with subsequent tools like fellow and hit the books analysisPEST analysisPolitical factorsSeveral semipolitical factors tie in to regulations, infrastructure, and health issues mint Vodafone business objectives and policies but with its strategic skill of recognizing, financing, planning, integrating, assessing, and legal and government support it become able to in force(p)ly call for with these external issues and develop effective business strategy as per the a pplication trends and environment (Donaldson OToole 2007).Economic factorsEconomic factors like high woo of licences, the statement war for 3G and constant terms wars between providers likewise critically affect partnership and its business plans but with its strategic capabilities of technological innovation Vodafone has become able to serve its customers with more surprising and advanced run (Dodourova 2003). Its technological development operations related capabilities are significantly inciteing it in resolving power economical issues from its external environment.Social-cultural factorsSocio-cultural factors like health issues, demographics and social trends also affects company operations that it critically handled with the help of technological innovation in regard to its human resources and technology development (Lynch 2006). Technologies offered by Vodafone are assured and authorize that assist it in treatment health related issues and its employees are highly de dicated and committed for technological innovation that assist in handling changing demographics and social trends.Technological factorsTechnology related issues that affect company operations and business plans are excessive technological change in mobile phone industry, the introduction of 3G and several other advanced aspects (Dodourova 2003). on the whole these external environment related issues are handled by Vodafone with its technological innovation capability that has been developed by exploiting technological opportunity and developing and applying technologies.SWOT analysisAnother contribution of Vodafone strategic capabilities is in concern to the management of its internal environment that is highly essential to link it up with external environment. With the help of its strategic capabilities, the company has become able to maximize its stance and existing opportunities like world(a) experience, establish itself across several countries, exploring saucy technologies related to telecommunication and mobile, and augment its size of the trade and as well as its market cope (Bakar Ahmad 2010).As well, due to its technological innovation capability it has also become able to establish itself at a good global platform, withstandardized customer relationship management and attaining high operations margin (Dodourova 2003).In addition to this, the company has also become able to minimize its weaknesses and threats to external environment like high roof expenditure, huge RD and infrastructural costs, legal issues, selection of appropriate technologies, political and social regulations, and change magnitude competitors (McLoughlin Aaker 2010). It has all become possible due to its strategic capabilities developed passim its variant primary and support activities and uninterrupted support from its tangible and intangible resources.All the above identified strategic capabilities assist firm in handling its external as well as internal factors th at in turn assist it in the development of appropriate business objective and plans for present and next(a) day success of the company.Critical Appraisal of Vodafones Business slaying since 2008Vodafone is one of the worlds largest mobile communications companies on the basis of revenue. From, its inception it is direct with a vision to become communication leader in a significantly connected world (Capon 2008). In its initial year, it confronted substantial difficulties throughout its business performance but in coating some geezerhood it has attained immense success due to its several distinct strategic initiatives (Sandbach 2009).Since 2008, the company is doing quite well but still it confronted several tribulations related to intense aspiration, offshoot of advances communication technologies, and continuous changes in customer preferences (Lynch 2006). For handling failures related to competition the company adopted three generic strategies for warlike advantage. Fo r handling excessive competition and market pressure, the company made commit of cost leadership strategy and differentiation in spite of focusing strategy.In regard to its problem of competition, the company cost leadership strategy was highly helpful. One critical success attained by the company in this design was to become a firm with truly internationalistic customer base (Sandbach 2009).It become possible for Vodafone due to its appropriate strategies like differentiation and cost leadership strategy. In present also, this strategy is highly helpful for the company in dealing with the issues that may arise with reckon portability. Number portability means customers can switch to anyone who provides a reliable and cheapest service (Vodafone Annual Report 2010 2011). By competing on its cost leadership, Vodafone can direct itself towards higher unit profits that in turn lead help it in attaining competitive advantage through decreasing costs.Another unconditional success t hat company has attained in last 3 old age is a good global platform which integrates its existing future network systems and heightens its ability to launch products with a concentration on both market speed and the ability to deliver it throughout all group network (Lynch 2006).It is done with a strategic initiative of differentiation. The differentiation along with merchandising strategy and effective selling mix helped Vodafone in serving its customers with added value through their wide range product features and quality that is significantly different from its competitors (Curwen Whalley 2010).The company strategic initiatives and their success and failures can also be understood effectively with the help of BCG ground substance that depicts the companys market share and growth rateRelative Market Share(Cash Generation)High LowStarsMultimedia pass alongQuestion Marks3GVodafone LiveCash CowSMSDogsAnalogue runHighMarket growth rate(Cash Usage)LowVodafone BCG MatrixThe BCG matrix depicts Vodafones portfolio that in turn demonstrates its products stand. Boston matrix represents the companys portfolio according to where the products and services stand in regard to market share and growth (Johnson 2008). This matrix shows that the company is in operation(p) by attaining a balance. Although, it has also confronted troubles in some last eld in regard to 3G and Vodafone live that can also be depicted as a problem child or skepticism marks.For effective future success in regard to the existing problems, the company should decrease its investments into its analogue services and in its place it should make work of money from cash cow SMS to reconstitute the problem child and oppose the star multimedia messaging in the high market share/high market growth area (Lynch 2006).In addition to these strategy models, the company performance since 2008 can also be understood with the help of different tools of financial analysis. By analysing subsequent financial ratios in foothold of liquidness profitability, efficiency and establish to investors it testament become easy to identify that how well company managed its performanceLiquidity RatiosCurrent Ratio The current ratio for Vodafone decreased from 5.40 to 5.00 in 2009 and 4.99 in 2010. It depicts that in terms of liquidity this period was not as good as throughout these age the company capability to pay its liabilities has decreased (Vodafone Annual Report 2010 2011). straightaway Ratio Vodafones quick ration fall from 5.38 in 2008 to 4.98 in 2009. This in turn also decreased slightly with 4.97 in 2010. This decrease shows that since 2008, the company ability to pay current liabilities without depending on the sale of inventory has also not attained any improvement (Luetjen Maatwk 2011). remunerationability RatiosGross Profit Margin Vodafones gross profit margin over the three years has fallen slightly from 38.30% in 2008 to 37.00% in 2006 to a further 33.80%. It is the will of uninterrupted rise in the cost of sales. Although company margins are fall but its ratios are much better than its competitors that demonstrate that industry is at its matured stage and regularly the company is making use of modernistic marketing strategies to bring down its cost.Operating Profit Margin The company operating profit margin has fallen from 28.32% in 2008 to 14.28% in 2009 that in turn once again rose to 21.32% in 2010. This was due to company procession towards market trends and existing competitors moves (Luetjen Maatwk 2011).Net Profit Margin The company net profit margin has fallen initially from 19.4% in 2008 to 7.51% in 2009 and subsequently it improved to 19.38% in 2010 that was due to companys use of appropriate generic strategies and marketing strategy (Vodafone Annual Report 2010 2011).Return on Equity The return to equity was also fallen from 8.83% in 2008 to 3.63% in 2009 but again with appropriate strategies it was increased to 9.49% in 2010.Effici ency RatiosStock turnover rate The company stock turnover has increased continuously in the three years from 85.08 in 2008 to 99.56 in 2009 and 102.71 in 2010. This shows that throughout this three years period the company has effectively converted its stocks into revenue and as well it also made an effective use of its working capital that is critical for attaining success in present intense competitive environment (Luetjen Maatwk 2011).Debtor Turnover The debtor turnover of the company has fallen slightly from 5.42 in 2008 to 5.35 in 2009 and 5.06 in 2010. It depicts that Vodafone is having high efficiency in regard to credit management. summation Turnover The asset turnover of the company is almost similar in three years as it was 0.28 in 2008, 0.27 in 2009 and again 0.28 in 2010. This ratio of company depicts its performance in generating sales from the assets at its dis government agency. enthronement RatiosThe Company earning per share has confronted both the increase and de crease from 2008 as in 2008 it was 12.56. In 2009 it reached at 5.84 and in 2010 it reached at 16.44. In addition to this, its price earning ration also confronted increase and decline. In 2008, it was 2.52 that increased to 3.14 in 2009 and again decreased to 1.35 in 2010 (Vodafone Annual Report 2010 2011). The companys use of appropriate strategies in comparison to its competitors assisted it in attaining this position.With the analysis of different financial ratios of the company, it can be said that the company performance since 2008 was a mix of success and failures. In this period the company did not confronted any severe failure in spite of just some minor business and competition related troubles (Wilson Gilligan 2005). Also, the company efforts made throughout this period were highly effective as due to this only it become able to make an effective use of its working capital.Development of a Potential Future dodging for VodafoneWith detailed discussion of company strategi c capabilities and performance since 2008, it becomes apparent that company is doing very well but several times it is also disruptive with intense competition and several other factors like increasing costs, emergence of advance communication technologies and changing preferences of customers (Dibb Simkin 2010). Till now, the company made use of cost leadership and competitive strategy that significantly helped it in attaining its particular(prenominal) business goals and objectives but it also need to be updated continuously.In regard to grow its position in international and global markets it is vital that the company operate with a potential future strategy that can be developed effectively with the help of Porters Diamond that in regard to Vodafone is as followsPorters five forcesSubsequent five forces make a direct effect on Vodafones strategic competitiveness that in turn will assist in determining a potential future strategy for the companyCompetitive rivalryIn telecommuni cation market in which Vodafone operates competition is quite high and basically it comes from its competitors O2, Orange, T-Mobile and Virgin. In this market rivalry is high and there is no brand loyalty that exhibits that there exist petty(a) differentiation in spite of price (Dibb Simkin 2004). For handling this rivalry and increment in international markets the company should expand its operations in more and more developing nations.Buying powerIn the market Vodafone is operating buying power is quite high and it could be understood with the measures of twist of customers that disconnect throughout a year. This also depicts that rivalry in industry is high. Customers have several choices and young packages in regard to new tariffs and new phones (Hitt, Ireland Hoskisson 2009). For surviving in this kind of market it is vital to have continuous upgrade and expansion in developing countries for deeming company position at global level.Power of suppliersIn addition to high b uyer power, the telecommunication market also operates with strong suppliers power. In this regard, as Vodafone is a cost leader, it operates with margins higher than their competitors. This assist it to attract price increases from its suppliers more comfortably than its competitors (Dibb Simkin 2010). existence an extensive, leading competitors of the mobile telephone industry, Vodafone is able to hold its supplier cost down and attain profit but this situation would not ride out in long-term if company is not able to main its position in global and international markets. For this it is vital to enter different developing countries.threat of substitutesThe company threat of product substitutes is low and it is due to its focused cost leadership strategy. This strategy makes it difficult for others to produce similar products and services at a lower rate with same economies of scale (Fransman 2002).Threat of entryAlthough the threat of new entrants in industry is low but this s ituation need to be maintained by Vodafone by minify its cost below of its competitors. This could be done by maintaining eminent level of efficiency and extending its place and position in different international and global markets (Kmlolu, HNasr Nasr 2010).With the help of this porters diamond analysis, it becomes evident that the most potential future strategy that can be adopted by Vodafone is expanding or concentrating more on developing countries. This analysis assists in identifying the suitability of selected potential future strategy. With this analysis it becomes evident that in present, Vodafone is able to maintain its position and attain significant competitive advantage with the help of focussed cost leadership strategy but the situation will not remain same in future.In future competition will get more intense and in that environment a firm that have strong international level presence will be able to operate. So, it is quite helpful for Vodafone to operate with a st rategy of concentrating more on developing countries (Kmlolu, HNasr Nasr 2010). This strategy will also assist the company in increasing its profitability and cost-benefit that is related to the acceptability of a strategic excerpt. Until or unless a strategic option s not acceptable it is not beneficial to use it. With this future strategy, the company will become able to reduce its costs and increase its benefits and shareholder value (Hitt, Ireland Hoskisson 2009).In addition to the suitability and acceptability of this future strategy, adoption of this strategy is also feasible. As in present also company is operating in several global locations so it is not so difficult for it to concentrate more on developing nations (Dibb Simkin 2004). It serves its customers with low prices that would also be beneficial for it to expand in developing nations. In this way, it can be concluded that concentrating more on developing markets is a quite effective potential future strategy for Vodafone and for its assured future success.