External Analysis of the New Zealand Telecommunication Market
External environment analysis bases on PEST
Political factors – The analysis of the external environment is important for any business organization so that the profitability of the company can be predicted. The government of New Zealand is stable in nature and the chances of success of the organizations in this area is also quite high. The political changes that occur in the country can also cause changes in the regulations that have been formed by the organizations. The labour based laws of the country are however quite strict which can cause issues in the telecommunications industry. The freedom given to the companies in this country is quite high (Hill, Jones & Schilling, 2014).
Economic factors – The economic situation of the country is effective in nature. The per capita income of the citizens of the country has been quite high which has proved to be a huge chance for the companies belonging to the telecom sector of the country. The inflation rate in New Zealand is less and the rates of unemployment is also low. The users of the country are also able to get high access to the various commodities related to various sectors. The telecommunications industry is booming in nature and the fluent economy of the country has been helpful in the operations of the various organizations. The companies which wish to expand the operations in New Zealand need to make huge investments in the market (Steinbach et al., 2017).
Social factors – The social factors of the country are quite effective in nature and this further depends on the business organizations with the other countries. The demands based on the economic system of the country has been high and has affected the economic situation of New Zealand. The country has a strong banking system and investments made by the foreign based organizations are invited. The telecommunication sector of the country is highly affected by the ways by which the demands of the customers are changing on a regular basis. The low population of the country has led to the lower rates of unemployment (Wheelen et al., 2017).
Technological factors – The strong educational system of the country has been able to facilitate the rapid changes in the technologies and the increase in the usage of technology by the citizens. The telecommunications sector of the company has been affected in a positive manner with the high acceptance of technologies by the citizens. The companies which are operating in this sector are able to provide their services at the lowest rates to the customers.
Strengths and Weaknesses of Vodafone New Zealand
The analysis of the external environment of the company in New Zealand has shown that the country is suitable for the successful operations of Vodafone (Michael, Storey & Thomas, 2017).
Internal analysis with the help of value chain framework
The value chain that is maintained by Vodafone New Zealand to improve its position in the market is based on the following factors,
- The network based equipment and the spectrum of the network. The network of the company is based on the 99% coverage of the entire population.
- The infrastructure and the operations of the company is mainly based on the in-house activities.
- The company also possesses a billing system which is totally owned by them (Sakas, Vlachos & Nasiopoulos, 2014).
- The retail distribution process of Vodafone New Zealand is based on its own branded and other types of retail chains. The distribution based facilities of the company are also organised in an effective way.
- The company owns its portal which is used for the distribution of services (Morschett, Schramm-Klein & Zentes, 2015).
The major strength of the company lies in the ways by which it operates in the organizational settings. The highly distributed network of the organization is based on the ways which it operates in the market with the help of the various systems.
SWOT analysis of Vodafone New Zealand
Strengths – The has received a high rank in the areas of the market which has been covered based on the demands of the services that are supplied by them. Vodafone is well-known for its network cover and wide distribution areas. The New Zealand based operations of the company has also been successful and the company has been successful in covering different areas and ranges in the country. The high amounts of revenues that are generated every year by Vodafone have been helpful for the successful growth of the company in New Zealand (Frynas & Mellahi, 2015). The company has spent huge amounts in the marketing based in New Zealand which has helped in creating the awareness of the brand. The customer base of the company in New Zealand is high enough to help them in achieving the revenues based targets. Vodafone also has a high brand value which has been helpful in the successful operations of the company in the industry.
Weaknesses – The subscriber base of Vodafone in New Zealand has dropped in the last few years due to the entry new and low cost operators in the industry. The value of the brand has also dropped due to the lack of customers of the company. The organization has also started losing its share in the market due to the increase in the number of companies providing the similar kinds of products and services like those which are being supplied by Vodafone (Durand, Grant & Madsen, 2017).
Opportunities – The rural areas of New Zealand have been able to provide huge opportunities to Vodafone so that the company is able to expand its operations and revenues as well. The emerging areas of the country are able to own high amounts of disposable income which can lead to the further increase of the profitability of the company. The dependency of the customers on smartphones are increasing and this has led to the increased usage of various networks. Vodafone can take advantage of this increased market and further try to set up its business in the country in an effective manner (Baumgartner & Rauter, 2017).
Strategic Options for Vodafone New Zealand
Threats – The high levels of competition that is being faced by Vodafone in the New Zealand telecom market has led to the lack of revenues for the company. The competition of the company in the booming retail sector has been increasing with each passing day. This has also forced the company to think about reducing the charges of the services that are provided to the customers. This has further caused pressure on the revenues of the company and its profitability in the market (Mitchell & Leiponen, 2016).
The three strategic options that are available for Vodafone New Zealand are as follows,
- The company can plan for increasing its network coverage in the various areas of the country which will further increase its reach.
- Vodafone also needs to think of reducing the prices of the services that are offered to the customers.
- The organization needs to think of innovative methods for dealing with the customers and providing them with different types of services (Hubbard, Rice & Galvin, 2014).
Evaluation of the strategic options
The strategic options that have been taken by the company can be helpful in increasing the revenues and profitability of Vodafone in the New Zealand telecommunications sector. The strategic options will further bring changes in the ways of operations of the company.
The company can thereby be recommended to implement the new strategies that have been formulated for the purpose increasing the revenues of the company in the market. The increased competition of Vodafone in the New Zealand market can also be faced by the company with the help of changed strategies. The premium pricing policy that has been implemented by Vodafone needs to be changed so that the company is able to operate in the market in a profitable manner.
References
Baumgartner, R. J., & Rauter, R. (2017). Strategic perspectives of corporate sustainability management to develop a sustainable organization. Journal of Cleaner Production, 140, 81-92.
Durand, R., Grant, R. M., & Madsen, T. L. (2017). The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), 4-16.
For mobile phones and fast broadband. (2018). Retrieved from https://www.vodafone.co.nz/
Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford University Press, USA.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
Hubbard, G., Rice, J., & Galvin, P. (2014). Strategic management. Pearson Australia.
Michael, S., Storey, D., & Thomas, H. (2017). Discovery and coordination in strategic management and entrepreneurship. Strategic entrepreneurship: Creating a new mindset, 45-65.
Mitchell, W., & Leiponen, A. (2016). Virtual special issue on innovation, intellectual property and strategic management. Strategic Management Journal, 37(13).
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp. 978-3658078836). Springer.
Sakas, D., Vlachos, D., & Nasiopoulos, D. (2014). Modelling strategic management for the development of competitive advantage, based on technology. Journal of Systems and Information Technology, 16(3), 187-209.
Steinbach, A. L., Holcomb, T. R., Holmes, R. M., Devers, C. E., & Cannella, A. A. (2017). Top management team incentive heterogeneity, strategic investment behavior, and performance: A contingency theory of incentive alignment. Strategic Management Journal, 38(8), 1701-1720.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.
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