Strategic Management Of Vodafone

Vodafone’s Existing Vision, Mission, Objectives, and Strategies

Discuss about the Strategic Management Of Vodafone.

Vodafone Qatar offers a range of services comprising voice, messaging, data and fixed communication in the state of Qatar. The company commenced it’s operations in 2009 in Qatar. Now the company has around 1.4 million customers using it’s services (Vodafone, 2017). The commitment is beyond the products and services offered by the company. Vodafone Qatar continues to innovate and bring new technologies to the state. It believes that the true value of business lies in the economic, environmental and social value. Vodafone invests mainly in four areas, safety of child, women empowerment, community giving and sustainability. The company has already gained a big number of customers in Qatar.

Vodafone is committed to provide world class telecommunications. The company provides cellular mobile telecommunication services and mobile accessories and equipment. The company offers prepaid and post-paid plans, broad band and internet packs. The vision of Vodafone is to drive speed to market. It persistently prioritises and pursue outcomes that matters to business. Vodafone make things simple for customers by reliable and transparent dealing. The mission of Vodafone is to help customers by adapting new trends and technologies to reshape the world. The objective of company is to be most admired brand. It also aims to embrace and enjoy digital future. It is the goal of company to influence stakeholders by it’s products and services. The strategy of business is to grow through geographic expansion, acquirement of new customers, retaining existing customers and increase in usage through technology. The company has adopted unique strategies to expand existence in Qatari market by establishing branches and stores in the major commercial centres and streets (Meyer, Neck & Meeks, 2017).

Vision statement:

The vision statement of company is to connect everyone to live a better today and form a better tomorrow. Vodafone will be the communication leader in a progressively linked world.

Mission statement:

Connect and empower people and accelerate the development of Qatar.

Vodafone is leading the telecommunication industry in Qatar with the second highest market share. The company uses the latest technologies to offer highest quality service.

Opportunities:

Partnership with Msheireb Properties:

The Msheireb Properties came in contract with Vodafone Qatar. As a result Vodafone can become the primary provider of mobile services. As a part of this agreement, Vodafone will be able to maintain necessary mobile sites to provide superior network coverage to the customers who are using latest technology like 4G and beyond. The company is committed to provide future technology that can emerge as the construction process (Ferlie, et. al. 2016).

Vision and Mission Statements for the Organization

Emerging markets:

There are regions where people do not have mobile phones and do not use 2G or 3G features provide a lot of possibilities for the growth of business. Vodafone has about 1,327,000 customers (Vodafone, 2014). It is bring in notice that less than 10% of those customers use 3G data. The revenue of Vodafone has increased by just 10% in the last quarter. The company has not reached to 100% mobile phone penetration. The country has more share of untapped market.

Fixed telecom and cable services:

The company is desperately expanding towards non mobile services to expand it’s portfolio and create new ways of income. Vodafone provides best offers and services in Qatar. It satisfies and meets requirements of customers.

Strong competitors:

Vodafone have strong competitors in the local market like Ooredoo company. It is the first and established company of Qatar. So Ooredoo have major number of customers. In this situation it is difficult to attract existing customers of company.

Market saturation:

There is situation of market saturation due to low number of population in Qatar.

Emergence of new alternatives:

The company has threat from the emergence of new alternative telecommunication technology. The customers can change network to adopt new technology (Bettis, Gambardella, Helfat & Mitchell, 2014).

Government intervention:

The interventions of government in the working of company and investment barriers are the biggest threat for the company.

Political factors:

The political factors influence the progress of Vodafone. The company is required to change infrastructure to be operational in Qatar. There are definite factors like harmony of the state and political volatility puts direct impact on the Vodafone. The instable conditions become war for the company to survive. The establishment of good infrastructure becomes a tedious task for the company.

So Vodafone is required to take permission from government to establish infrastructure in Qatar. The company uses it’s brand image to take advantages and enter in the market. The company also has to follow the change in policies of government and communication act to provide better service to customers.

Economic factor:

Recession in the recent years has been very effective. The policy of customers of doing saving in recession has affected growth of Vodafone. The company has to change it’s policy in the recession to attract customers. The inflation rate also affects the buying behaviour of customers. The company has to reduce prices so that customers can buy products (Michael, Storey &Thomas, 2017). In the high inflation rate people save money and control their buying. It directly affects the economy of Qatar.

Vodafone’s External Opportunities and Threats

Social factor:

The education level of Qatar decides the decision taken by customers. Their decision of choosing product and company affects Vodafone. The company has to target people and fulfil needs then it can be only successful in the market. In the world innovative technology is always entering so it is   hard for Vodafone to convince customers. The company has to assure customers that they provide better product then other companies. The changing technology has always effect to the company’s strategy and customer level.

Technology factors:

The Qatar market is growing and well established so the companies are more likely to enter in the market and make earnings. The companies do something unlike local company. So that they always provide improved and upgraded products compared to the local company. It is always pressure on Vodafone to provide updated technology to customers and persuade them to use technology like Wi-max and 3G. The company provides navigation programme to customers which is available in all handsets.

Environmental factors:

The company have established a recycling programme. Vodafone have initiated recycling programme for phones to keep environment safe and reuse the material used in the mobile phones. It provides incentive to customers in terms of money and can get the new phone by the exchange of old one. It helps to attract customers.

Legal factors:

The company has to be attentive for the legal issues like copy and plagiarised issues. The company has been accused of various legal issues concerning to the sphere of infrastructure. So the company has to face various legal penalties. The company has also been accused of not paying to the workers as compared to the competitors. The company should mark down some legal ties in this viewpoint. Vodafone should accept some legal issues in order to increase number of customers and carry encouraging image in the market. It always helps company to gain trust of customers (Daspit, et. al. 2017).

CPM is a toll that compares company with it’s rivals and reveals strength and weaknesses of company. CPM is used to reveal strength and weaknesses against competitors. It helps company to know in which areas improvement should be made. It considers both internal and external factors for the evaluation of overall positioning of firm (Bhattacharjee & Dey, 2015).  The CPM score is dignified on the basis of acute success factors. The CPM not only comprises the firm but also assists to add other competitors to make comparative analysis easier. The CPM includes critical success factors, rating and weighted score (Chen, Delmas & Lieberman, 2015) 

PESTEL

The external factors are evaluated in the EFE matrix. It is the tactical tool used to assess external environment of company including economic, social, technological, government, legal and competitive information. The EFE matrix identifies the available opportunities and threats. The external opportunities can be recognised by analysing the external environment with the help of PEST analysis or Porter’s five forces.

Key External Factors	Weight	Rating	Score
Opportunities:
· Inadequate technology in market	.10	1	.10
· Local internet companies (Weak)	.15	3	.45
· Growing use of technology	.10	3	.30
Threats:
· Inflation and bad economy	.15	2	.30
· Severe competition	.20	4	.80
· Development of new substitute technologies	.15	3	.45
· Market Saturation	.05	3	.15
· Government restrictions	.10	2	.20
			2.75

From the above data it can be noticed that Vodafone is dealing relatively good with external and internal factors with overall score of 3.05 and 2.75 correspondingly. It remains over the 2.5 average. From the past performance of company it can be assumed that Vodafone paid greater attention to strengthen it’s internal issues (Bao, Johansson & Zhang, 2017). The company has successfully managed it’s issues. If we compare the internal and external issues then the results shows that it better tackled internal issues.  

Strength

Second largest mobile service:

Vodafone is second largest mobile service in Qatar. The company has highest second number of subscribers and is the biggest asset of company. The strong position of company indicates financial leverage, larger capacity to engross risks and capability to direct the market direction.

Diversified business:

The company has existence in all kinds of mobile markets. The developed market of country brings bulk of revenue. The immense growth in Qatar brings prospective in both voice and data. The deteriorating business in one part of city can be reimbursed by growth from another city (Bull, et. al. 2016).

Developed and innovative network:

Vodafone installed LTE and high speed wireless networks in the major markets of Qatar. It was set up within a few years of spectrum division. The Vodafone LTE is in the process of up gradation. The company was destructive in providing 3G services in the first half of last decade. The perception of company’s wireless network is positive in Qatar. The company has strong network infrastructure.

Strong brand recognition:

Vodafone is a strong brand and has good reputation. The aggressive strategy, innovative advertising, decent customer service and employee friendly policies have assisted company to save it’s place among the better telecommunication companies of Qatar. It makes easy for company to win new customers and recall the existing base.  

Competition:

Qatar does not have too many Telecom service providers. Oreddo is the main competitor of Vodafone. Other than Oreddo there are Target telecommunication, Orbit electronic and telecommunication and Al-Kaun. The competition has hit bottom line and no relief is anticipated in the short term.

Absenteeism from the profitable market of Qatar:

The outlet of company is not at the appropriate places. The company should establish stores at malls and crowded places. The company should focus on the profitable markets, where sales can be generated in large amount.

Network strength: The network strength of Vodafone is weak in the remote areas. The company depends on the centralised management system which may result in inflexibility. The infrastructure of Vodafone is also poor (Boateng, 2016).

The IFE matrix is used to assess internal environment of company and identify it’s strength and weaknesses. The rating given in IFE show how strong or weak each factor is in the firm. The arting varies from 4 to 1. 2.5 are considered an average score. The company can gather some factors from the SWOT analysis of company.

KEY Internal Factors	Weight	Rating	Score
Strengths:
Biggest market share	.20	4	.80
Strong brand name	.10	4	.40
High geographic reach	.10	4	.40
Serving multiple segments	.10	3	.30
Good financial position	.15	4	.60
Weaknesses:
Inconsistent service quality	.20	2	.40
Repetitive, non-innovative offers	.05	1	.05
Overstated sales efforts	.10	1	.10
			3.05

Long term objectives

It is the ultimate goal of company to maximise wealth of shareholders and accomplish sustainable growth and success in the long term. The long term objectives of company have been defined in these areas:

Profitability:

The sustainably to grow business depends on the level of profits. The company has been challenged with aggressive price competition in the country. The company has not offered cheap prices than the rivalries. Vodafone has fairly focused it’s resources on new value added services for the new and existing customers (Durand, Grant & Madsen, 2017).

Productivity:

In order to achieve substantial economies of scale, the company transformed independent national companies into united operation. Vodafone make use of global supply chain management to harmonize business process in order to reduce procurement cost. The company has accelerated access for the expansion of low cost suppliers to form direct relationship with suppliers.

Competitive position:

Vodafone is the second leading mobile operator in Qatar by subscriber base and revenue. The company focuses on the domestic market of Qatar. The company further aims to target both new and existing customer and increase market share (Touati, et. al. 2017).

Employee development:

The organisation aims at improving it’s structure in order to change in the market environment. Vodafone helps employees to reach their prospective through on-going training and development. It helps employees to enhance their skills and knowledge.

Technology leadership:

Vodafone has improved it’s network in order to enhance it’s products and services. The company takes initiative to evolve infrastructure so that the best quality service can be provided to the customers. The company innovate products and services to enhance customer choice and experience of users. Vodafone aims to maintain technological leadership position in Qatar by adapting advance technology initiatives.

Public responsibility:

The company builds a sustainable future and delivers products and services which enables positive economic and social outcome for the positive stakeholders. The company promotes products and services which enables effective healthcare. It also provides access to the basic services through mobile payment solutions (Bettis, et. al. 2016).

The generic strategies indicate the mission statement of company. It defines the specific long term strategy. These are the core ideas and the company has implemented differentiation strategy. This strategy is intended to appeal customers for a particular product attribute. The company builds customer loyalty by emphasizing on the attribute above other product qualities. The company first tries to build customer loyalty.

Grand strategies:

The grand strategies specify the time period in which long term objectives can be achieved. It is a general approach which guides major actions of company (Nerur, Rasheed & Pandey, 2016). The company has involved itself with various geographic locations and customer groups with numerous grand strategies like horizontal integration, joint venture, strategic alliance and turnaround.

The company expands it’s operations through horizontal integration, joint ventures and strategic alliance in obedience with the culture, custom and supervisory requirements. The company has upheld significant presence in Qatar. The company has made equity investments and joint ventures in the country (Kiseleva, 2017). The company has formed strategic alliance with telecommunication and non-telecommunication businesses. The company has also maintained strategic partnerships with HP, Dell, Acer and Lenovo to implement a built-in SIM. It has launched global mobile transfer service and developed mobile marketing solutions.

The turnaround strategy used to reduce cost and asset to survive and recover from decreasing profits. The company has enlarged the debt ratio due to the aggressive global geographic expansion. It has also invested in the existing business to expand business in the markets of Qatar. The company expects higher return in the long run from these markets.

The BCG (Boston Consulting Group) matrix is used by company in brand marketing and product management. It helps company to add products in the product portfolio. One measurement includes nine industry attractive dimensions and other comprises twelve internal business strength dimensions. According to BCG matrix, the business unit can be divided into 4 categories based on market progress and share comparative to the competitors. The market growth helps substitute to industry attractiveness. The relative market share obliges substitute to competitive advantage.   

Vodafone can divide it’s business unit in four categories, market penetration, product development, market development and diversification. The broadband and fixed line market can be covered in the market penetration (Palia, De Ryck & Mak, 2014). The market development looks for the further development. The product development can include IPLC products. Diversification comprises outsourcing.

The SPACE matrix is used by company as a management tool to analyse it’s operations. It is used to decide what kind of strategy a company can undertake. It centres on the strategy formulation particularly on the competitive position of company. The SPACE matrix can also be used for SWOT analysis, BCG matrix model and IE matrix. The SPACE matrix is broke down to 4 quadrants, aggressive, conservative, defensive and competitive (Zuo, et. al. 2016).

It tells when a company can track an aggressive strategy and the company has strong competitive position in the market. It also uses internal strength to advance market penetration and market development strategy.

• The strategy of Vodafone is customer focused. The company can develop new product and services which implements the latest and advanced technologies (Engert, Rauter & Baumgartner, 2016).
• The company is committed to the strategic and financial objectives through innovative and superior services. The company is not only limited to offer basic telecommunication services but also offers advance services like integrated mobile and communication services and portable internet.
• The company addresses marketing by providing special offers and value added service to customers.
• The company can invest in research and development to enhance speed of internet browsing. This strategy can be proved more efficient as there are many internet providers in Qatar (Carroll, Primo & Richter, 2016).
• The company can prepare financial statements on the basis of historical cost. The company can revise standard to introduce a number of changes in accounting for the business.

The procedure of strategy review and evaluation consists of the following steps:

Setting benchmark of performance:

Setting benchmark of performance includes what to set, how to set and express them. It is necessary to discover special requirements. The performance indicator recognizes and states special requirements for evaluation. Vodafone can use both quantitative and qualitative criteria for the valuation of performance (Steinbach, et. al. 2017).

Measurement of performance:

The standard performance is a yardstick to compare actual performance. The reporting and communication system is helpful in measuring performance. The strategy appraisal becomes easier if the proper means are accessible for the measurement of performance. The variables should be formed against which measurement of performance can be done. The financial statements like balance sheet, profit and loss account should be prepared to measure performance.

Analysing variance:

Variances can be found while comparing actual performance with standard performance. So the variance should be analysed to mention the degree of tolerance. The positive deviation shows better performance whereas negative deviation is an issue of concern (Certo, Busenbark, Woo & Semadeni, 2016). The negative deviation indicates lack in performance. In this case the strategists should take corrective actions to overcome.

Taking corrective action:

The corrective action should be planned after the identification of deviation in performance. A detailed analysis should be carried if the actual performance is less than the desired performance. If the organisational potential does not match with the requirements then standard should be dropped (Grünig & Kühn, 2015).

Conclusion

Vodafone is the largest telecommunication company. The company is continued to develop more products and services. The company is able to maintain sustainable competitive advantage with the changing technology. The company’s vision and mission helps to sustain market leadership. The external opportunities and threats and PESTLE analysis helped company to update range of services to gain competitive advantage. The CPM and IFE matrix has been constructed and organisation’s internal strength and weakness have been identified. The SPACE matrix and BCG matrix have been used to stay ahead of competitors. Finally recommendations are implemented and procedure for strategy review and evaluation has been recommended.

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