BS Vodafone

7/27/2019 BS Vodafone

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4/9/2013

Made by

SANDHYA SHARMA 12BSPHH010902

SANKALP LALVANI 12BSPHH010907

SHALINI TRIPATHY 12BSPHH010939

SHIVIDH TIWARI 12BSPHH010978

SHINU CHANDRAN 12BSPHH010966

SHALINI KESHOTE 12BSPHH010936

SHAIVY SHARMA 12BSPHH010935

SHATABDA DHAR GUPTA 12BSPHH010956

SHASHANK GUPTA 12BSPHH010947


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Introduction

Company Introduction:

History of Vodafone Group:In 1982 this company got the first mobile license in UK. Vodafone was formed in 1984 assubsidiary of Racal Electronics as a public company. In 1984 it was also incorporated as RacalStrategic Radio Limited. In 1988 Racal floated 20% of its share in London Stock Exchange asRacal Telecommunication PLC. In 1991 it became an independent company and also changed itsname to Vodafone group. In between it merged with Air touch communication and changed itsname to Vodafone Air touch Plc. It also formed Verizon Wireless merging with Bell Atlanticwith 45% stake for Vodafone. Later on it again reverted back to Vodafone Group. Vodafone,based in the UK, was the world's largest mobile communications company by revenue. Itoperated under the brand name 'Vodafone'. The name VODAFONE comes from VOICEDATAFONE, reflecting the company's wish to provide voice and data services on the mobilephones. In 2000 Vodafone acquired Mannesmann AG which helped them to acquire business inGermany and Italy. This in turn increased their SFR. In 2006 Vodafone acquired Telsim, aTurkish company, for $2.6 billion. Vodafone India Limited and its telecom subsidiaries(Vodafone India Group or VI Group), headquartered in Mumbai is the second largest mobilenetwork operator serving over 150 million customers in India with a presence in all 23telecommunications circles. Vodafone has faced a string of problems since entering the Indianmarket in 2007, including a 2.3bn write-down - 25% of the business's value - due to risingspectrum costs, and a disputed $2.5bn tax bill from the Indian authorities. Vodafone has thesecond largest market share with 19.7% market structure. Total subscriber base is 153.71million.

Figure 0-1: Market Structure of Vodafone PLC


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Vodafone Enters India:

The motto of Vodafone to make a move in the Indian market was that the India is believed to be

a good investment despite political uncertainty, bureaucratic hassles, shortages of power and

infrastructural deficiencies. India represents a huge potential for overseas investment and is

vigorously encouraging the entrance of foreign players into the market. No company, of any size,aspiring to be a global player can, for long ignores this country which is expected to become one

of the top three emerging economies. Success in India depends on the correct estimation of the

country's current potential, underestimation of its difficulty or overestimation of its possibilities

can lead to failure. The consideration was given to the factor of the inherent difficulties and

uncertainties of functioning in the Indian system. Entering India's marketplace requires a well-

designed plan backed by serious thought and careful research.

India seems to be a great opportunity for long-term growth and fifth largest economy in the

world, third largest in terms of GDP in the entire continent of Asia. It is the second largest

among emerging nations. After completing the acquisition of Hutchison Essar in May 2007 and

the company was formally renamed Vodafone Essar in July 2007, Vodafone was granted forgood in Indias market place. Vodafone is a leading telecommunication company in India, by

making customers uses their mobile communications and making their life more fulfilled; and by

making mobile communications the primary means of personal communications. Vodafone

aimed to help people find unlimited information, entertainment or assistance wherever they are.

Figure 0-2: Vodafone Financial Review

Over the past few years, they have worked hard to build a company which was capable of

delivering innovative and compelling mobile services to all customers throughout the world.


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Right now, they are introducing new mobile services that will make Vodafone an even more

important part of customers' lives. On March 2011, Essar exercised a put option to sell its share

in the company and exit the company for 5 billion dollar. This option helped Vodafone to boosts

its position in the alliance. Vodafone would now own 75% of the total stake in the alliance.

Currently Vodafone India has a revenue of $6.53 billion. Vodafone Indias (blended) ARPU

(Average revenue per user) is currently Rs 196 from Rs 187 previous year. There has been achange in the definition of ARPU starting April 1, 2013 and the company notes that ARPU is

now calculated by dividing mobile in-bundle customer revenue, mobile out-of-bundle customer

revenue and mobile incoming revenue by the average number of customers. Postpaid ARPU was

at Rs 786 while Prepaid ARPU increased to Rs 161.

PEST Analysis of VodafonePEST analysis is a strategic tool used to analyze external factors affecting the business and

stands for political, economic social and technological factors.


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Market Introduction:Financial year 2012 saw the continuance of healthy customer growth for the Indian telecommarket which witnessed a 12.4% increase in its customer base during the 12-month period. Thetotal telecom customer base in India stood at 951.3 Million, second only to China, with a tele-density of 78.7% as at end of March 2012.

While wireline customers continue to de grow, the growth of the telecom sector was driven bythe wireless segment. The wireless customer base crossed the 900 Mn mark with 919 Mncustomers as at end of March 2012. This segment grew by 13% during the year, contributing tonearly 97% of the total telecom customer base. The telecom rural penetration at 39.2% at end ofMarch 2012 offers huge growth potential in terms of both customers and usage. The uptake ofbroadband services has been abysmally low with nearly 13.8 Mn broadband customers as at endof March 2012 representing a broadband penetration of just over 1% offering a huge growthpotential. The country is witnessing growing demand for data products & services, with theincreasing penetration of edge enabled and 3G devices. The rollout of the wireless broadbandusing TD-LTE coupled with the expansion of 3G services is likely to provide an impetus to the

broadband penetration, which is being increasingly seen as an integral driver of improved socio-economic performance. This will trigger the next phase of growth of the telecom industry. Newinnovative applications, enhanced user experience and decreasing price of 3G & LTE enabledhandsets would be the key drivers of the adoption of data services in India.

Given the huge growth potential offered by the telecom industry through increased coverage andnewer products & services, competition will remain intense with both existing and new playersattempting to maximize their share of the growing telecom pie.

Development in Regulation

Telecom sector is one of the highly regulated sectors in India. Besides Department of Telecom(DoT), Telecom Regulatory Authority of India (TRAI) is the nodal authority, which regulatestelecom services in India. During the previous year, the key regulatory developments were asfollows:

Recommendations on Telecom Infrastructure PolicyTRAI submitted its recommendation on Telecom Infrastructure on April 13, 2011, as per whichTelecom infrastructure should be treated as an essential infrastructure and DoT should bring theIP-1 under Unified License.

Licence Amendment for Network Security

On May 31, 2011, DoT made the License amendment and issued the network security guidelineswherein the telecom operators would be responsible for security of their network. Under theamendment, the service providers will be required to create facilities for monitoringintrusions/attacks/frauds within 12 months and report the same to licensor.

Procedure for Activation of VAS Services


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On July 4, 2011, TRAI released direction on procedure for activation of VAS services mandatingtelecom operators to obtain third Consent through SMS within 24 hrs from customer beforecharging the VAS otherwise the VAS has to be deactivated.

Telecom Consumer Complaint Redressal & Consumer Protection

On January 5, 2012, TRAI released The Telecom Consumers Complaint Redressal Regulations,2012by repealing the earlierThe Telecom Consumers Protection and Redressal of GrievancesRegulations, 2007. On January 6, 2012, TRAI released The Telecom Consumers ProtectionRegulations, 2012 as per which the vouchers offered by the telecom service providers havebeen simplified and standardized into 3 categories - Plan Voucher, Top-Up Voucher and SpecialTariff Voucher (STV). It also mandates the telecom service provider to inform the prepaidconsumer through SMS or USSD, about the deduction from his account after every call madeor after every data usage session.

Green TelecomDoT in January 2012 has accepted some recommendations of TRAI on Green Telecomdated

April 12, 2011. These recommendations specify targets for minimum percentage of rural andurban towers to be powered by hybrid power (Renewable Energy Technologies (RET) + Gridpower) by year 2015 and 2020. It also includes self declaration of the carbon footprint by theservice providers of their network operations along with carbon emission reduction targets.These recommendations also require service providers to formulate a Carbon Credit Policy inline with carbon credit norms.

Spectrum Management & Licensing FrameworkOn February 15, 2012, DoT announced the Spectrum Management & Licensing Framework, asper which, all future licenses will be Unified Licenses and allocation of spectrum will bedelinked from the license. Uniform license fees @ 8% for all telecom licenses and service areaswill be made applicable in two yearly steps starting from 2012-13. It also allows for merger up to35% market share of the resultant entity with requirement of TRAI recommendations formergers beyond 35% market share, without breaching of 25% cap on GSM spectrum/10 MHzfor CDMA spectrum holding.

Recommendations on Unified Licensing

On April 16, 2012, TRAI released its recommendations on guidelines to Unified licensesuggesting a onetime non-refundable Entry Fee for Unified Licence. It also suggests includingIP-1 under Unified Licence.

Recommendations on Auction of SpectrumOn April 23, 2012, TRAI submitted its recommendation on auction of spectrum specifying thereserve price for various spectrum bands along with suggestion on the auction process, spectrumre-farming and spectrum usage charge amongst others. The Company along with other telecomplayers have made various representations to the Ministry and the DoT highlighting the adverseimpact of these recommendations, particularly with reference to spectrum re-farming and thereserve prices, on the consumers, telecom industry and the nation as a whole. Theserecommendations, if accepted, will have a direct bearing of the profitability of the IndianTelecom industry by way of increased opex and capex.


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PORTERS INDUSTRY ANALYSIS (5 forces)

1) THREAT OF NEW ENTRANTS:

The threat of entry depends upon the presence of entry barriers. In telecom industry entry

barriers is high due to following reasons:

Capital intensive: Telecom Industry is a capital intensive industry, thus entry into this industry

means that the firms needed access to huge amount of capital so as to cover the fixed costs to lay

and maintain a physical network (exchanges, fiber optic cables etc) to the premises of

customers.

Regulatory policy: The Indian Telecom industry is broadly governed by the Department ofTelecommunication (DoT) which administers the task of policy making, licensing, spectrumpricing and allocation. The recommendatory as well as regulatory functions are performed by theTelecom Regulatory Authority of India (TRAI). After the 2000 amendment, an adjudicatory

body was setup by DoT, for the effective settlement of disputes arising in the Telecom industry.It is called as the Telecom Dispute Settlement and Appellate Tribunal (TDSAT)Firms needed to get regulatory approval/licenses from the Telecom RegulatoryAuthority of India (TRAI), DoT. This is generally seen as costly and cumbersome process.Licence fee is high and has a high gestation period as approvals need to be taken from bothTRAI and DoT.

Product differentiation: Telecomm industry is basically ruled by some giants like Airtel,Vodafone, and Reliance Communication etc. Thus, handshaking with the angel investors and puttheir savings to start this business is risky. Moreover, providing superior products and that to at alower cost is difficult.

Skills requirement: Due to rapid change in technology, enhanced operating skills are requiredto handle the telecomm operations. More high managerial skills are need to have goodoperational efficiency. Thus due to high operating and managerial skills, entry in the telecommindustry low.

Economies of scale that create intense competition is also barrier to entry keeping out the newentrants who cannot make the large investments or who cannot sustain for long period withoutearning profit.

2) THREAT OF SUBSTITUTES

There are not many substitutes for the products developed by telecom companies. Mobileservices are considered a strong substitute to wire-line services. Today Wire-line service marketis considered to be diminishing market. Today, mobile network equipment forms a major part oftelecom vendors portfolio. But, VOIP (Skype, Gtalk , Yahoo Messenger) is posing a threat tothese companies.


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3) RIVALRY AMONG EXISTING FIRMSIndustry rivalry has become extremely intense with the emergence of new competing firmsleading to price cuts across the industry. Rivals are now roughly equal in size and power andthey cater to roughly the same customer base. They also produce nearly identical products. Thusbest way to attract customers is by cutting prices. According to porter intense rivalry is related to

the presence of various factors:

Number of competitors: Competitors in telecom industry is very high. There are limited butmajor players competing against each other via spending on R&D and new product launches.Major player in the market are Reliance Communication Ltd. , Bharti Airtel Ltd. , BSNL,MTNL, Vodafone, TATA Communications , etc.

Rate of industry growth: The Telecom industry of India has registered manifold growth in therecent years. The number of telephone subscriptions increased from 846.32 million to 951.34million, registering a growth of 12.41 %. The wireless subscriber base increased by 107.58million and the wire line subscriber base recorded a decline of 2.56 million. The wirelesssegment continued to dominate with a total base of 919.17 million connections. The overalltelecom density in the country increased to 78.66 from 70.89.Both Public Players and Private Players are enhancing their technologies and taking the telecomindustry to a much higher growth state. Not only service providers but also handsetmanufacturers are contributing significantly to the industry and economy of India.

4) BARGAINING POWER OF BUYERS

With the increasing choice of several technologies and means of communication available andentrance of several new firms buyer power has been constantly increasing. The consumer nowhas access to several means of communication like email, instant messaging which arediminishing the importance voice services. These companies now buy in large volumes andequipment costs form a significant part of their expenditure (except the governments). Hencethey involve in negotiating good bargains. Due to different product launches of similar nature bydifferent service providers , buyers has got buying power to switch from one product to another as theswitching cost is also low.

5) BARGAINING POWER OF SUPPLIERS

The analysis of supplier power typically focuses first on the relative size and on theconcentration of suppliers relative to industry participants and second on the degree ofdifferentiation in the inputs supplied. The ability to charge customers different prices in line withthe differences in the value created for each of those buyers usually indicates that the market is

characterized by high supplier power and at the same time by low buyer power.

Due to limited number of suppliers as BSNL is one of the major supplier in Indian Telecomsector as it provides link to the company. Also the shared tower infrastructure also helped tolower the infrastructure cost. The cost of switching from hardware to hardware is also medium.


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Opportunities:Following are the opportunities for Vodafone:

1. Growth of mobileadvertising

2. Increasing 3G penetration3. Focus on M2M solutions4. Mobile money transfer

services market

5. Growth in the Buying Powerof People

6. Reduction in MobileHandset prices7. Growing demand of the

youth population in India forBroadband and VAS.

Growth of mobile advertising

The mobile advertising market is forecast to record strong growth in coming years. With mobilephone becoming the center of the digital convergence, advertising on mobiles will be a majorgrowth area of growth for telecom players. According to the industry sources, the global mobileadvertising market is expected to grow at a compounded annual growth rate (CAGR) of about

40% until 2014. The growth is primarily due to the increasing mobile phone users and evolvingmobile platforms. Vodafone has been focusing on mobile advertising in recent times. In 2009,the group completes roll out of mobile advertising services to its 18 operating markets. In theprevious year, Vodafone Marketing Solutions had run over 2000 campaigns across its globalfootprint for hundreds of global brands. Growth of mobile advertising will increase the groups

revenue in coming years.

Increasing 3G penetrationThe demand for third generation (3G) services is expected to increase with the growing need foradvanced data and video services. The 3G technology allows services providers to provide a hostof services including high speed mobile broadband, mobile TV, and mobile VoD, among others.

As the traditional voice revenues of mobile operators are being hit by changing tariffs, increasingcompetition and alternative technology, among other factors, operators are migrating to 3Gservices to facilitate stable or increasing average revenue per user (ARPU). The 3G penetrationin Asia-Pacific is expected to reach 40% 2014. In India there has been a growth in 3G customersfrom 3.3 million to 3.7 million almost an increase of 12.1%. Vodafone secured 2x5 MHz of 3Gspectrum in nine circles in the Indian auction for a total price of 1.74 billion ($2.8 billion) inMay 2010. Increasing adoption of 3G will contribute to the group's revenue growth in comingyears.

Focus on M2M solutions

Using M2M technology to develop solutions that enable machines to connect with each other,and to integrate several functions and operations for one seamless system, we help organisationsin dramatically improving efficiency, significantly reduce operation and maintenance cost, betterasset management, increased service speed and create new revenue streams. Our location trackersolution, which uses M2M technology, is helping one of the beverage leaders to track assetsonline and to monitor the deliveries, resulting in enhanced business efficiency. Utilised by manyVodafone customers, Smart Metering, is another innovative solution that allows energy and

utilities companies to efficiently collect meter data and provide two-way communication for their


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residential, commercial and industrial customers. Smart Metering also provides a way to offerincreasingly personalised services and reduce pollution and carbon emissions.Using M2M communication, one of the state municipal corporations is monitoring andcontrolling water levels in reservoirs and tanks, which help in reducing water pilferage, wastageand leakages with timely preventive actions. Another Vodafone customer is using M2M

technology for remotely controlling street lights which helps in energy consumption andreducing operation costs. At Vodafone, we are committed to identifying and developingsolutions that enable the companies to deliver better to its customers needs.

Mobile money transfer services marketVodafone India, along with ICICI Bank, Wednesday launched its mobile money transfer andpayment service 'M-Pesa' here. It plans to roll out this service in Mumbai and Lucknow in thenext couple of days.This service helps the unbanked and under-banked sections of the population gain access tofinancial services through the mobile phone.Today, less than 5 percent of villages in India have a banking outlet. Financial inclusion is a

national priority and we believe that with M-Pesa, we now have the ideal offering to facilitatethe same across the country in compliance with all applicable regulations, Suresh Sethi,Business Head - M-Pesa, Vodafone India said.This service will now be available through 1,400 specially trained authorized agents and across130 Vodafone exclusive retail stores in Delhi and NCR region.The service enables customers to transfer money to any mobile phone, remit money to a bankaccount, make payments for utility bills and deposit and withdraw cash from designated outletsby registering themselves for the service. (IANS)

Threats:

Following are the Threats to Vodafone:

1. Intense competition

2. Regulatory environment

3. Declining PAT margins

4. Mature Market

Intense competitionThe group operates in the highly competitive and rapidly changing technology-based

telecommunications industry. The focus of competition in many of its markets continues to shiftfrom customer acquisition to customer retention as the market for mobile telecommunicationshas become increasingly penetrated.

Regulatory environment

Vodafone being a global company, must comply with an extensive range of laws and regulations.These requirements regulate and supervise the licensing, construction and operation of thegroups telecommunications networks and services. In particular, there are agencies which


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regulate and supervise the allocation of frequency spectrum and which monitor and enforceregulation and competition laws, which apply to the mobile telecommunications industry.Decisions by regulators regarding the granting, amendment or renewal of licenses, mayadversely affect the groups future operations in these geographic areas. In addition, decisions by

regulators and new legislation, such as those relating to international roaming charges and call

termination rates, will affect the pricing for the services Vodafone offers. Further, industryregulators continue to impose lower mobile termination rates and lower roaming prices.Termination fees and roaming charges accounted for 17% of the groups revenue in FY2010.

Changes in the regulatory environment may adversely affect the groups business prospects orresults of operations.

Declining PAT margins: PAT margins of Vodafone have declined from 17% in FY2007 to0.01% in FY 2011. In the year 2010 it even became negative. One of the main reasons fordeclining PAT margins is rise in inflation which increases the cost burden among the customers.Rise in network expense for Vodafone has increased from 12% in FY2007 to 24% in FY2011.There has also been an increase in license fees and spectrum fees from 6 to 10 % and 3 to 8%

respectively. Deterioration of operating parameters due to hyper-competition and interestpayments associated with high levels of indebtedness have severely impacted the net profitmargins of Vodafone. Another major contributing factor to declining PAT (Profit after Tax)margins is the high cost of debt. Interest rates are high in India and have been trending up overthe recent past. Since telecom has not been granted the status of an infrastructure industry,operators cannot avail themselves to debt at favorable rates of interest available to otherinfrastructure players such as roads and ports.

Matured marketThe high penetrations in the market indicate saturation of the markets eliminating any chance ofsignificant growth in the future through new subscribers. The high penetration rates in thesemarkets signify weak prospects for the group to report growth, making it dependent ondifferentiation and value added services for future growth. Mature markets may affect thegroups revenue growth and profitability in coming years. Low values of RoCE and PAT margincoupled with high debt levels do not augur well for the industry. It is highly likely that Vodafonewill curtail their expansion plans as they will not be confident about recovering their investmentsin light of the currently poor performance.


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BCG MATRIX

IntroductionThe growth-share matrix (aka the product portfolio, BCG-matrix, Boston matrix, Boston

Consulting Group analysis, portfolio diagram) is a chart that had been created by Bruce D.

Henderson for the Boston Consulting Group in 1970 to help corporations with analyzing

theirbusiness units orproduct lines. This helps the company allocate resources and is used as an

analytical tool in brand marketing, product management, strategic management, and portfolio

analysis.

To use the chart, analysts plot a scatter graph to rank the business units (or products) on the basis

of their relative market shares and growth rates.

Cash cowsare units with high market share in a slow-growing industry. These units typically

generate cash in excess of the amount of cash needed to maintain the business. They are

regarded as staid and boring, in a "mature" market, and every corporation would be thrilled

to own as many as possible. They are to be "milked" continuously with as little investment as

possible, since such investment would be wasted in an industry with low growth.

Dogs, more charitably calledpets, are units with low market share in a mature, slow-growing

industry. These units typically "break even", generating barely enough cash to maintain the
http://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/Bruce_D._Hendersonhttp://en.wikipedia.org/wiki/Bruce_D._Hendersonhttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Product_linehttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Product_managementhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Modern_portfolio_theoryhttp://en.wikipedia.org/wiki/Modern_portfolio_theoryhttp://en.wikipedia.org/wiki/Scatter_graphhttp://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/wiki/Cash_cowhttp://en.wikipedia.org/wiki/Cash_cowhttp://en.wikipedia.org/wiki/Cash_cowhttp://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/wiki/Scatter_graphhttp://en.wikipedia.org/wiki/Modern_portfolio_theoryhttp://en.wikipedia.org/wiki/Modern_portfolio_theoryhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Product_managementhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Product_linehttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/Bruce_D._Hendersonhttp://en.wikipedia.org/wiki/Bruce_D._Hendersonhttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/Boston_Consulting_Group


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business's market share. Though owning a break-even unit provides the social benefit of

providing jobs and possible synergies that assist other business units, from an accounting

point of view such a unit is worthless, not generating cash for the company. They depress a

profitable company's return on assets ratio, used by many investors to judge how well a

company is being managed.Dogs, it is thought, should be sold off.

Question marks(also known as problem children) are business operating in a high marketgrowth, but having a low market share. They are a starting point for most businesses.

Question marks have a potential to gain market share and become stars, and eventually cash

cows when market growth slows. If question marks do not succeed in becoming a market

leader, then after perhaps years of cash consumption, they will degenerate into dogs when

market growth declines. Question marks must be analyzed carefully in order to determine

whether they are worth the investment required to grow market share.

Starsare units with a high market share in a fast-growing industry. They are successful

question marks and become a market leader in a high growth sector. The hope is

that stars become next cash cows. Stars require high funding to fight competitions and

maintain a growth rate. When growth slows, if they have been able to maintain their category

leadership stars become cash cows, else they become dogs due to low relative market share.

BCG Matrix for VODAFONE
http://en.wikipedia.org/wiki/Return_on_assetshttp://en.wikipedia.org/wiki/Return_on_assets


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Recommendation:

Marketing Strategy:

From the studies, we can incur that Vodafone currently have a weak marketing strategy, mostly

in terms of its advertising. Based on generational marketing theory and the demographics whichVodafone target as its main customers, the recommendation is that they invest in a celebrityendorsed campaign. This will fit in with Vodafone's motto 'Power to you!' which will beenhanced by a global persona advertising their services, in addition to making their own brandhandsets better known. This however will counteract with their aim of remaining simple in theiroperations. Potential risks to this can be that financial resources can be wasted in an unsuccessfulcampaign, risks of celebrity scandals or choice of the wrong celebrity that does not fit in with thecompany's image.

Health and Safety RJVs :

Research Joint Ventures with associations such as Cancer Research and other independentassociations to join knowledge for R&D in safer handsets. Vodafone uses part of its resources forthe Vodafone Foundation, therefore a proportion can be used in such RJVs as it enhances brandimage, it fits in with the sociological factors of the external analysis and by doing so they wouldimplement a global strategy which recognizes the significance of local concerns and cultural andlegal requirements. This will further enhance the group's corporate social responsibility. Potentialrisks could be that it could be perceived as Vodafone admitting to the link of mobile phones andcancer and instead damage the brand image.

BoP Strategy in emerging markets:

The recommendation is that Vodafone implement a Bottom of the Pyramid strategy by providingan internet-based phone service with advanced Wi-Fi technology so that rural areas indeveloping countries can be connected. This fits the vision of 'Keeping people better connected'.

This way Vodafone can use their own-brand, low cost smart phones. This strategy could lowerthe investment required, lower operating costs and would increase the number of users. Thisstrategy can be implemented by providing solar panels to provide the WiFi networks and offer achance to make the mobile build out 'green', which also fits in with Vodafone's sustainabilitygoals. Potential risks are large amounts spent in the network build-up with low revenue as aresult.

Also it is very safe to say that Vodafone are one of the more important players in the mobiletelephony industry. However, there are still areas in which they can improve and strategies whichthey can implement to further increase their revenue; enhance their brand and public image andfurther launch and make their own-brand handsets a threat to their competition. It is clear fromthe analysis that even though Vodafone are technologically forward in terms of the services theyprovide, they however lack innovation in their handset manufacturing. By implementing theabove recommendations there is potential for them to promote their hand-sets and become morecompetitive overall.


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VODAFONES FUTURE STRATEGY

Future strategy for Vodafone' would be to get "efficient pipes", i.e. a broadband network that's

cost effective in different channels like in the radio, transport, primary elements, "smart pipes" as

retail/wholesale services, and top-level products for the consumer segment.

In-depth analysis of strategies of Vodafone

We provide an in-depth business; strategic analysis of Vodafone Group Plc, a comprehensive

insight into the company, including strategy formulation, strategy planning, strategy evaluation

and selection as well as strategy implementation. This will involve in investigating the

organizations external environment, to identify Opportunities and threats it might face, and its

strategic capacity, capabilities to isolate key strengths and weakness as well as indentify the

significant of significant of the stakeholder analysis and environment and organizational audit

Vodafone offers a wide range Products/Services, such as

Voice Services

Social Products

Messaging Services

Vodafone live

Vodafone live! With 3G

USB modems

Vodafone Mobile Connect Data Cards

Roaming Services

Other Business Services

VODAFONES BUSINESS STRATEGY

Vodafone's present/future business strategy will be to grow through geographic expansion,

acquisition of new customers, retention of existing customers and increasing usage through

innovations in technology. This is proving a very successful strategy, as is evident from

Vodafone's past success in India.

Vodafone business strategy as well as sustainability strategy are inseparable. By meeting

societys needs will definitly create a great opportunity to grow business. Vodafone strategy to

identify and focus on the areas where they can address sustainability challenges in the most

effective way and also offer an attractive commercial return for their shareholders.


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Expanding business strategy in emerging countries like India is providing accessibility to

communications and the socio-economic benefits.

Stake Holder Analysis

Stakeholder Analysis will help to identify the key people who have to be won over. To analyse

key stakeholders, an assessment of their interests and find out ways in which these interests

affect the project and its viability.

Importance of Stakeholder Holder Analysis

Stakeholder Holder Analysis is very important to any company. Importance of Stakeholder

Holder Analysis of Vodafone PLC.

1. Vodafone PLC can leverage the opinions of its very powerful stakeholders to modifycompanies projects at an early stage. This makes more likely that they will support to

organization, their input can also improve the quality of Vodafone future.

2. Gaining support from most powerful stakeholders can help Vodafone to gain more resources.

This will benefit Vodafone to make projects more successful.

3. With early communicating with stakeholders, company can ensure that they know what

company is doing and fully understand the benefits of companys project .this means they can

support companies actively when necessary.

4 Vodafone PLC can anticipate what people's reaction to companies future project may be, and

build into companies plan the actions that will win people's support

5. draws out the interests of stakeholders in relation to the problems which the Vodafones future

plans which seeking to address.

6. Vodafone cans identifies conflicts of interest and potential conflict

7. Helps provide an overall picture

8. Helps identify relationships between different stakeholders - helps possible coalition.


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STRATEGIC OPTIONS

Depending on the strengths and weaknesses, the following strategic options and the

recommedations mentioned can be given.

Strengths: Strong international presence and brand recognition.

The kind of subscriber base it has in the Indian market.

It has the 2nd highest market share in India.

It has a 2nd highest subscriber base in India, first being Airtel.

Its strong advertising strategies and impact on people.

Its Indias 3rd biggest mobile carrier(source: Business standard)

Excellent Network Coverage

Weakness:

Uncertainty in revenue growth in the HSDPA network based on historically slow

consumer market take-up of 3G data services

Very less R&D

High customer churn (33.33%)

Rural India unable to relate to the brand

OPTIONS FOR VODAFONE

Strategy Evaluation and Selection: Few of the options, we have come up is:

Strategic Option A: Focusing for DiversificationVodafone entering into Electronicequipment Market

This is an inherently more risk strategy because the business is moving into markets in which it

has little or no experience. Vodafone PLC can enter into electronic equipment market by using

diversification strategy and produce Vodafone Television, Vodafone Microwaves, Vodafone

Washing machine etc.

Strategic Option B: Merger and Acquisition - Vodafone and HTC Mobile

Merger and Acquisition - Vodafone and Micromax


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Evaluations of Selected Options:

Suitability A B

Does the strategy address the circumstances in which the organisation isoperating? Yes Yes

Is the strategy viable? Yes Yes

Does the strategy exploit core competences? Yes Yes

Does the strategy address the external environment?

Yes Yes

Is the strategy viable and achievable given conditions within environment?Yes Yes

Does the strategy build upon or exploit the strategic capabilities of theorganisation? Yes Yes

Does the strategy fit with the current corporate culture of the organisation?Yes Yes

Does the strategy create/maintain competitive advantage?Yes Yes

Acceptability

SHAREHOLDERS A B

Does the strategy provide adequate financial returns? Yes Yes


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Does the strategy lead to unacceptable risk? No Yes

Will there be issues at social responsibility? No Yes

MANAGEMENT

Will the Management support the strategy? Yes Yes

Will they leave they leave the organization? No Yes

STAFF

Will there be strike or turnover due to implementing new strategy?No Yes

Will they support to the implementing the Strategy?Yes Yes

Does the strategy have impact over there salary?

Yes Yes

Does the strategy have impact over job security?No Yes

CUSTOMERS

Will they use our new services?Yes Yes

Will it satisfy their needs?Yes Yes

Will it answer their complaints?Yes Yes


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SUPPLIERS

Will the suppliers support to the strategy?Yes Yes

Will the change there product, Process and location To support ourstrategy? Yes Yes

Do we can make guarantee on financial security after implementing newstrategy? Yes Yes

NATIONAL GOVERNMENT

Will be misfit with the law?No No

Will these violating policy of the government?No No

Will government provide support for us?Yes Yes

PRESSURE GROUP

Will it be damaging Outcry?Yes Yes

Does it go far enough to satisfy three complaints?No No

FEASIBILITY

Does the organisation have the resources and capabilities to deliver thestrategy Yes Yes

Does Vodafone has previous experience in similar strategy?Yes Yes


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Strategic Decision and Recommendation

When evaluating the mentioned options, option A would be most favorable option over option B.

Vodafone entering into Electronic equipment Market Vodafone PLC can enter into electronic

equipment market by using diversification strategy. Vodafone can produce Vodafone Television,

Vodafone Microwaves, Vodafone Washing machine etc. Diversification is the name given to the

growth strategy where a business markets new products in new markets. This is an inherently

more risk strategy because the business is moving into markets in which it has little or no

experience.

Option A would fit to addresses the challenges of the external environment, is based upon or

enhances the resources and capabilities of the organisation, builds or exploits synergies and is

consistent with its corporate culture. This strategy complies with consideration of the anticipated

rewards relative to the goals of the organisation. In addition, expectations of its key stakeholder

groups. Anticipated rewards of option A will achieve possible returns relative to the risks

incurred.

Proposal for Vodafone Entering into Electronic Equipment Market

This proposal is prepare to evaluate whether this strategy is success or not. After identify

external and internal factors affecting, Vodafone PLC has to decide whether all the selected

strategy is financially viable and ability of meeting the selected target as well as it within the

budget and time frame.

Target for Vodafone entering into Electronic equipment Market

Introduce new product to existing customers and new customers by 10% within next six

month.

Improve frequency of purchase of Vodafone entering into Electronic equipment by 10%

within each year.

Re-position using the marketing mix.

Increase Impulse segment by 25% within 12 month.

Conclusion & Recommendation

In a nut shell, the report examined Vodafone entering into Electronic Equipment Market. The

report provided comprehensive insight into the company, including strategy formulation, strategy

planning, strategy evaluation and selection as well as strategy implementation. This will involve

in investigating the organizations external environment, to identify Opportunities and threats it


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might face, and its strategic capacity, capabilities to isolate key strengths and weakness as well

as indentify the significant of significant of the stakeholder analysis and environment and

organizational audit

Business strategy plan is based on various business analysis techniques including SWOT

analysis (Strengths, Weaknesses, Opportunities, and Threats), PEST analysis (Political,

Economic, Social, and Technological), Marketing plan is based on SOSTAC framework. All

activities integrated to achieve pre-established strategic objectives.

External and internal forces have been evaluated by using SWOT analysis and PEST analysis

model. Vodafone PLC could use its strong brand position.

As financial aspect concerns NPV is positive, therefore based on financial points this strategy for

into Electronic Equipment Market. The strategy is viable. But we need to take into account of

non financial factors as well. Vodafone has to develop strong Marketing strategy when intoElectronic Equipment Market .finally all These performances must be in line with bonus scheme

to motivate employee.

OTHER OPTIONS FOR VODAFONE

VODAFONE Business Solutions, a specialist business unit within Vodafone has launched a

unified communication portfolio aimed at increasing the productivity of businesses. The services

of the new portfolio includes a Vodafone hosted Virtual PBX for business, hosted Audio and

Visual Conferencing Solutions, Vodafone Broadband Telephony for Business enterprise, and anInformation Technology (IT) managed security product. Hence it can take these services to India

as well.

According to the Head of Vodafone Business Solutions, the introduction of these services was

facilitated by the feedback gained from clients with the surging use of data by businesses.

He added that, as the use of data became robust, it offeredvarious new opportunities for

businesses to get on and experience new services and products.

Vodafone Business Solutions, he ellaborated, was thus committed to using new services to

improve productivity and infrastructure for people who are dedicated to the business market and

are relevant for the business future prospects.At the 3rd Information Technology, Managers Forum organised by Vodafone Business

Solutions, the Chief Executive Officer of Vodafone ,who addressed the forum through the Video

Conferencing Service said that the service offered a platform for people to communicate through

different means globally.The video conference, he also stated, was to provide a straightforward

medium for people to meet the numerous demands of their clients, who would be expected to

have the broadband connectivity.


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He said the quality of the service was excellent, and also pledged Vodafones commitment to

continue investing in providing better services and products for their customers worldwide.

Presenting an overview of the newly introduced services, the Head, Product and Propositions of

Vodafone Business Solutions, stated that the feedback from clients which indicated that mobility

was becoming more and more important from the productivity point of view. Hence, it facilitatedthe launch of the service.

He said businesses were faced with various challenges in their operations which the service had

come up to resolve, offering them a platform to increase productivity, collaboration, be cost

efficient and offer a simplified user experience for businesses facing numerous challenges.

Vodafone Business Solutions, he ellaborated was empowering people to be highly productive

through the freedom to choose when, where and how they wanted to work.

He ellaborated that Vodafone hosted Virtual PBX for Businesses, was a PBX based convergence

communications service that allowed its users to combine fixed and mobile telephony into a

single unified platform for managing and receiving calls.

He said the services also allowed its subscribers to ensure that they never missed a call and

benefitted from features such as a single auto attendant, extension dialing and the single web

portal for managing all devices.

He also mentioned that with the new Virtual PBX complete product, most companies would save

between 40 and 80 per cent on monthly phone costs, while various consumers would be able to

save money as there were no costs incurred for the PBX hardware or software, no hardwaremaintenance or support fees was charged and no hardware upgrade or enhancement costs among

other benefits.

Accordingly, the Audio and Video Conferencing Solution services allowed the dispersed teams,

located anywhere globally, to work together and exchange information easily as if they were in

the same place.The conferencing solutions would reduce the unnecessary travel and reduce

unnecessary cost, conduct more training sessions frequently and reach a wider audience as well

as improve the ability of businesses to foster partnerships.

The Vodafone telephony gives businesses the ability and facility to connect existing analogue

devices to the systems and host communication services that integrates all corporate

communications globally.


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BS Vodafone

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Transcript of BS Vodafone