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Vodafone Case Study

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Vodafone is a telecommunication company based in the United Kingdom with interests in Europe and the United States. It originated as a part of Racal British radar and electronics firm founded in 1950. Racal founded its Vodafone subsidiary in 1983 and won the license to build Britain’s first cellular telephone network which was launched in 1985. By 1990’s Vodafone had established itself in the market and the company was purchasing other companies and building is global footprint across the globe. The company roughly doubled its size in 2000 by acquiring German industrial conglomerate Mannesmann AG. The company did contribute significantly to the war effort and therefore was stripped of nearly all its directors under the terms of the war-crimes mandate. Following reorganization of Germany’s basic industries according to Allied occupation policy, Mannesmann emerged as an independent company in 1952 and conducted business in Brazil, Canada, Argentina, Austria, and other European countries in industries such as transportation and telecommunications.

Today Vodafone is identified as a purpose-led company which aims to connect for a better future and its market expertise in the field of telecommunication along with its commitment to business sustainability has helped the business reach new heights. In Indian Vodafone Idea Limited is an Aditya Birla Group and Vodafone Group partnership. It is India's leading telecom service provider. The Company provides pan India Voice and Data services across 2G, 3G and 4G platforms along with headsets and headphones, memory card portable chargers and lot more.

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Organization Culture:

Organization culture plays a very crucial role in the success of the business. It helps to establish a positive work climate and also ensures that the workforce is well motivated. Thus the organizational culture in Vodafone is also very open where the organizational leaders constantly look for helping the employees to grow professionally as well as help them achieve their best selves in the work place. The management is also very much concerned regarding the availability of proper training and support for all the staffs across all the offices. Workplace equality is highly valued where the management ensures that there exists no differentiation or discrimination based on cast creed and religion. Gender disparity is also considered as highly offensive. The organization follows a geocentric approach in its staffing process so that the best talents can be retained irrespective of location. Apart from this sustainability is a very important part of the work culture of Vodafone. It has very actively addressed the issues of climate change by identifying digitalization as the key to solve this critical crisis. It focuses on access to connectivity, digital skills and creating relevant products and services, such as access to education, healthcare and finance. Vodafone Group has been constantly working on building digital literacy and developing its digital reach so that it can be accessed in the most remote parts of the globe

SWOT ANALYSIS:

Strengths:

Some of the major strengths of Vodafone include:

Firstly it has very huge market coverage. That is Vodafone has ranked 395th amongst the global top 2000 brands by Forbes. It is very well known for its broad market coverage and is the second largest subscriber base in India. Along with this it is the second highest ranked telecom operator and is behind only China Mobile. Vodafone operates in more than 25 countries across the globe. Such large market automatically leads to huge revenue generation for the brand. It is ranked 104 in its sales figures across the global 2000 list and number 84 in market value. Next are its immensely strong marketing techniques. The Vodafone pug is known across the globe to follow Vodafone users everywhere. Similarly, the Vodafone zoozoo’s was a brilliant and endearing campaign which converted many users to diehard fans of Vodafone. Time and time again, Vodafone comes out with brilliant campaigns. This largely helps to strengthen the brand recall value and helps in building the brand valuation.

Weakness:

Some of the major weaknesses that Vodafone has include:

There has been a dropping subscriber base of Vodafone in the past 4 years this is a major problem for Vodafone looking at the global market scenario. The brand needs to strengthen its core values and implement strategies to acquire more customers. Along with this the brand is also facing a drop in its brand valuation. Both – subscriber base and brand valuation of the company was very strong to begin with. But both have them have suffered in the last 3-4 years. Brand valuation drop in the last 1 year was phenomenal. The  company is also significantly losing its market share in USA as it is facing direct competition from Verizon wireless and AT&T. Apart from this due to brexit and other economical conditions in Europe, Vodafone’s performance in its home market has been poor and it has not generated much revenue from its home market. In fact, if we look at revenues, 40% of the revenue is coming from India and not from US or UK.

Opportunities:

Some of the major opportunities include:

Vodafone needs to prioritise and invest significantly in its rural market penetration as the urban market seems to be quite saturated with intense competition. Not only rural markets in developing countries, other emerging markets such as those in Africa are also a great potential place for Vodafone. These new and emerging markets have increasing disposable income and communication becomes important once a network is growing. Thus, there are many roles a telecom company can play in an emerging market. Hence, besides the rural markets, Vodafone should also concentrate on Emerging markets across the globe. Along with this the company should also focus on developing its 4G spectrum and bringing significant improvements in its network coverage.

Threats:

Some existing threats include:

Severe competition in the telecommunication market with brand like Version Wireless and AT&T ruling the U.S market. China has its own China mobile. India has Airtel and Reliance Jio. There is cut throat competition in the telecom sector and this is strongly affecting the brand Vodafone, which was trying to offer differentiated services by keeping a bit of premium pricing. Mobile number portability has been identified as a major threat for Vodafone. For instance Reliance Jio gives phone calls and internet for free, then consumers don’t think twice before switching brands. MNP has made it easier for consumers to switch between multiple telecom operators. As a result, this is a major threat to Vodafone which is losing its brand equity already.

PESTEL ANALYSIS:

Political Factors:

Vodafone has faced extreme political pressure in Spain and Italy. The political unrest and the Brexit have caused significant impact on the overall business performance of Vodafone in U.K. In Spain the company had to reposition itself due to increase in price competition while in Italy, the company faced a new entrant in the mobile market. A new data regulation resulted in a slower growth in the South African market.

Economic Factors:

Economic factors play a major role in the international business context. The demand for data and mobile services has grown in the recent years. However, everything depends upon consumer demand and purchasing ability. Thus it is very important to assess the economic performance of every nation for understanding the market and the expected market growth. In this context it is important for Vodafone to understand that India, U.K, Spain and Italy are some of the main markets for the brand. Hence conditions like Brexit or fall in the income of the consumers in these countries definitely affects the business quite intensely

Social Factor:

Changing social trends and people’s lifestyles affect people’s buying habits. Over time consumption patterns and preferences of people in various regions of the world have changed a lot.  Today large amount of people spend huge amount of time on the internet for work as well as leisure purpose. Growth in demand for internet based services has proved beneficial for international telecom brands like Vodafone. More and more people are shopping online and the role of internet in the lives of people has grown a lot with social media too.  All these seem to bring a positive aspect for the business of the telecom industry brands

Technological Factor:

Vodafone is a telecom brand hence technology plays a very significant role in its operation and growth. It is very necessary for the company to invest judiciously in extending and developing its services. As a result, the company is using digital technology to provide higher user convenience and to grow user engagement. It’s my Vodafone app and website can be used to access the range of services that Vodafone offers. These act as both marketing and customer acquisition channels for the brand. Vodafone also uses digital technology for promotions. These digital inceptions has excessively helped the business to build its overall market presence

Environmental Factor:

Doing business with sustainability has to be prioritised by all global brands today. Hence Vodafone has also been significantly developing its environmental concerns by reducing its carbon footprint. The company also has excellent management systems in place to manage its office waste and water consumption. Another important areas is compliance with local regulations throughout the world.

Legal Factors:

Laws and regulations are very significant when global brands work in different international market. From tax to labour and business practices in other areas including environment, businesses have to be mindful of compliance in each area. Non-compliance to these can actually affect the business reputation and as negatively impact the brand’s revenue as the business has to pay heavy fines.

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