Vodafone Is A UK Based Telecommunications Marketing Essay

Vodafone Is A UK Based Tele discourses grocerying EssayIn this case propound we will provide two detailed strategic options for Vodafone as a telecommunications provider to stick out its emersion internationally. We will give reason for our recommendations and tax the VRIO Framework of the organization and provide a clear Five Forces Analysis.Vodafone is a UK sottishd telecommunications giant that has been a part of regulate the radio tele squall patience as we know it today. Vodafone is present is almost European and Asian grocerys. The keep comp any(prenominal) failed in Japan and has thus far to enter the the Statesn trade success well(p)y as an independent company.We name developed two strategies for anxiety to consider. Our first option is passing innovative and requires the company to utilize technology that already exists by forming alliances with providers of internet referions and with send for manufacturers. Our second option argue that Vodafone shoul d enter the the Statesn grocery as soon as potential providing wireless resound service in the American grocery store daub using many aspects of its brisk disdain model.Suggesting the first option involves higher(prenominal) risk than option two. There is however room for sustainable growth with both options.Case 3-11 Vodafone E Pluribus EnumMission and objectives of VodafoneVodafone is the worlds largest provider of voice and entropy communication services to consumers and enterprise customers. The company employs about 66,000 people about the world. The company headquarter is situated in Berkshire, UK. Vodafone operates through single reportable pipeline segment supply of communications services and intersection points. At the end of frame 2007, the company had 206 million customers world widely. (Vodafone, 2007)Vodafones strategic objectivesRevenue stimulation and represent reduction in EuropeInnovate and deliver on our customers constitutional communication inevit ablyDeliver unshakable growth in emerging marketsActively contend our portfolio to maximize returnsAlign capital structure and sh arholder returns policy to schemeKey issues and problemsKey issues and problems for Vodafone include how the company manages to aline its growth and to maintain its hawkish advantage in the dramatically ever-changing market environment of the high-powered telecommunication sector.VRIOTable 1.1 The VRIO framework apprizeRarityImitabilityOrganizationCompetitive implicationsNetwork infrastructureYesNoNoYesCompetitive parityDiversified revenue lasciviousYesYesNoYes episodic competitive advantageLeading market rigYesYesYesYesSustained competitive advantageNetwork infrastructureOne of Vodafones key technologies and alternatives is the strong web infrastructure that supports its operations. To be able to provide sp right-hand(a)ly services, a strong net infrastructure is fundamental for the company. Vodafone operates 2G net intendt, through GSM communicates, in all its officious operating subsidiaries, offering its customers services such as voice, text pass a broad and basic data services. All the net profits operate GPRS or 2.5G as well, which enables wireless access with active devices to data networks like the internet. Vodafone also obtains 3G networks offering its customers diligent broadband data access services allowing data download speeds of up to 384 kilobits per second. 2006 launched High Speed Downlink Packet Access (HSDPA) technology shortens download measure probatively with data transmission speeds of up to 3.6 megabits per second and assoils the usage of mobile broadband services much much than pleasant for the customers. HSDPA is enabled in the existing 3G network with after softwargon updates. (Vodafone, 2007) The strong network infrastructure is a valuable resourcefulness and enables the company to respond to the growing customer needs with high quality services now and in the future. This valuable resource is non a oddity in the wireless telecommunication patience and so it can non be costly for the competitors to imitate. Many of the worlds large mobile operators have the same access to the same technology as Vodafone and a mesh over massive networks. Vodafone is very well organized to exploit the full competitive potential of the network infrastructure by providing the employees a fur-bearing and safe working environment with attractive performance base incentives. This resource is an organizational forte and generates a competitive parity.Diversified revenue baseBy acquisitions, stakes in companies, and supply networks Vodafone has strategically expanded its aim to consider the whole world. The company has equity inte simplicitys in 25 countries. Vodafones companion network arrangements extend to a further 38 countries. (Vodafone, 2007) Vodafone has significant mobile operations in countries such as Germany, Italy, Spain, UK, Egypt, Kenya, South Africa , Australia and New Zealand. In 2007 the largest geographic region was Germany with a contri saveion of 17.1% to the total revenue, followed by UK 16.3%, Spain 14.1%, Italy 13.5%, and otherwise Europe 13.5%. Arcor and Pacific contributed 9%, Middle East, Africa and Asia 8.2%, and Eastern Europe the rest 9% of the revenues. (Datamonitor, 2007) Vodafones global reach and geographically diversified revenue base is a valuable resource for the company. This valuable resource helps the company to resort its risks and losses. As diversified as Vodafones revenue base is it is a rarity within the wireless telecommunication persistence. Vodafones strategy is to actively manage their portfolio by investing into markets that offer a strong local position. With strict fiscal investment criteria Vodafone maximizes its and its lotholders returns. (Vodafone, 2007) Vodafones competitors would not face a cost mischief in trying to imitate this resource. It is more about the strategy that a comp any implements than about the financial resources. Vodafone is well organized to exploit the full competitive potential of this valuable and r be resource. The Boards goal is to make sure that the companys employees are aware of Vodafones strategic goals and mutual obligations. This resource is an organizational strength and characteristic competence and generates a temporary competitive advantage.Leading market positionVodafone is the worlds leading mobile telecommunications company. Vodafone operates in Europe, the Middle East, Africa, Asia Pacific and the US by subsidiary undertakings, associated undertakings and investments. In countries with significant operations Vodafones market shares are astonishing Germany 36%, Italy 33%, Spain 31%, UK 26%, South Africa 58%, US 25%, Egypt 48%, and Australia 18%. (Datamonitor, 2007) A strong market share with the market draw position is an super valuable and rare resource which improves the companys brand image and gives it a solid foun dation to enter modernistic potential markets. This resource is imperfectly imitable and the competitors would face a cost disadvantage in obtaining or developing it. Vodafones market leader position is based on the passion and effort of the companys employees. The company is well organized to manage effectively its employees to reach their full potential and benefiting them selves and the company. This resource is an organizational strength and sustainable distinctive competence and generates a sustained competitive advantage.5 Forces VodafoneRivalryThe panic of rivalry in this business is impacted by the low number of big firms in the market. There are a few numbers of large firms worldwide that competes for the market share this lowers the nemesis of rivalry. The firms that are in the business however are very competitive and because of a relative slow market growth in this industry the firms fight over the market shares that are out thither and that annex the threat. There i s also a low level of switching be to the consumer and a low level of product dissententiation and this further brings the threat level of rivalry up. So in the mobile network industry the threat of rivalry is fairly high.SubstitutesThe threat of substitutes for voice and data communication over the traditional network is moderate. People avocation over long distances could or else of picking up a mobilize go to a computer and call through that. The low costs of computer work could potentially take over most long distance calling. The more local calls and business calls would be more secure for the mobile market, although jail cellular phone phones with the ability to use the internet to make calls are being make available and will soon take a considerable market share of calls made. The threat of substitutes can be reasonable high in this industry.BuyersThe threat of buyers in this industry can be considered fairly low. The several(prenominal) buyer has no impact on the eq uipment casualty of the products offered.SuppliersSuppliers agent in some aspects of this industry is high. In the cell phone part of the business the suppliers of the phones can have a big impact on the price of products and the condition of the deal they make with the provider. One clear example of this is when orc awkward apple tree launched their recent I-phone. They made an exclusive contract with ATT so they had the exclusive right to be the service provider to their phone in America. So the suppliers power in this industry is high.New EntryThe threat of entry is highly influenced by the economy of scale of the existing companies. The large well complete companies that have a strong foothold in the market and a known brand name would make entry for a brand- bran- immature company costly. Although there are some smart arrivals the larger firms control the market and will put pressure on any new entries. The threat of new entries is fairly low for the bigger companies.Table 2.1 grocery store Positioning GridHighTele2TeliaSoneraLow DKSonofonCoverageBT VodafoneVirginMobileATTHighMarket ShareLowMarket ShareCoverageMain occupation Statement How can WE revolutionize the wireless telecom industry?strategic preference 1There is a lot of buzz in the telecommunication market about 2G and 3G networks. It was the dream of the CEO of Vodafone to bring the 3G network into the hands of the American consumers a few years back, but Vodafones partner in America did not want to invest in the new 3rd generation network.The new technologies that are out in the market now can give Vodafone the opportunity to be in bird-scarer of all the competition in the American market. What we propose that Vodafone enters the American market with a 6th generation phone and phone service for cell phones. The type of phone is a phone that not only works on the regular network used to day in America but can also use the internet to make calls, not only to other Vodafone customers but t o all networks.The technology is not new and exists today in America, but not in the mobile phone market. Vonage and Comcast offer their customers a phone service based over digital networks and not over standard phone lines. The way Vodafone is going to differ themselves from the existing firms is to offer this to cell phones.The way that this system works is that instead of the cell phone using the regular network to connect the calls it makes, it uses any wireless internet access that it can connect to. This means that calling people from you cell is virtually free and you would only pay a monthly charge on you cell phone to Vodafone. If you cannot find a wireless network to connect to, the phone can use a regular phone network as a backup.With a strategy to enter and take a market share in America like this one, you do not have to make large wintry investments in the hardware. Instead you have a 6th generation phone that can be operated on both the old networks and on digital n etworks.To get these phones and plans out to a large customer group, Vodafone should concentrate on the big cities first, making a encrypted wireless network available in the city that only their phones can access. This way the company can jut how the customers like being connected to a faster and better network with a more advanced phone then available in the American market.The latest hype in the American cell phone market is the Iphone this phone is witnessed into one carrier and can over the carriers network connect to the internet. The phone is locked to one carrier (ATT) but can be hacked and used by others. The Vodafone would be configured so that you cannot hack it by the software allowing the consumer to connect and call for free to any phone in the world by simply not connecting that person to the Vodafone network. The phone could be free for all providers to sell but some functions on the phone like IP communication would be useless. Since this is one of the biggest sel ling points for the product you basically lock the customer in to your carrier.To be able to make money of you customers you set a fixed monthly payment for the plan and no extra charges for calling people over the wireless networks, but standard charges for regular charges made from the phones.Strategic Option 2It is hard to try to develop a strategic option to revolutionize the telecom industry for a company that has already been involved in shaping the industry for many years. Option 2 will differ from Option 1 in multiple areas. For option 2 we propose that Vodafone enters the American market place as soon as possible as Vodafone the company instead of through subsidiaries. Vodafone has always focused their marketing efforts chiefly through sponsorships of large sports teams such as Manchester get together Football baseball club and McLaren Mercedes Benz Formula 1 team along with hundreds of others. We believe that Vodafone can reproduction many of the elements that European customers have been satisfied with directly over to the American market which is currently lagging behind by almost quintette years compared to Asia and almost two years compared to Europe. Providing 3G service in the United States is needed and we believe that Vodafone could successfully gain market share in the United States. Vodafone has very high brand equity world wide and we believe that it is beat to establish a grip on the US market.Recommendation ImplementationIt is easy to see similarities between Vodafone and Sir Richard Bransons Virgin Corporation, other than the fact that the logos look similar. They are both UK based companies that are very dynamic and the company cultures are similar. Both companies are not afraid to be innovative and to move in new directions. We therefore recommend that Vodafone choose to move forwards with Option 1. This option involves the most risk, but we firmly believe that the industry is moving more and more towards telecommunication via wireless broadband connections. Just take a look at the Apple iPhone which with just one push on the fill screen switches from WI-FI to pure telephone mode. The iPhone does not provide IP-voice communication yet but we firmly believe that it is just a matter of time before it and others will.Implementing Option 1 we recommend that Vodafone establish strategic alliances with true US based companies to be able to provide WI-FI hotspots that the handheld devices connect to. Also establish alliances or strengthen alliances with the phone manufacturers. We recognize that there are some privacy issues with Option 1 that needs to be solved, but this could not be done overnight and those issues will have got to the Vodafones competitors, such as ATT as well. We choose to recommend Option 1 because we have identified an opportunity for Vodafone to become the industry innovator and leader also in the United States over time. And we believe that it is possible repayable to the fact that th e company is dynamic and it is not afraid to explore new opportunities. The same level of brand equity can be achieved in the US as in Europe and Asia.Lessons LearnedThere are many valuable lessons in this case. First lesson is that in order to sustain growth in an industry as rapidly changing as technology companies always has to look for ways to be innovative and reform themselves in order to stay competitive and current. Another lesson is that a dynamic company without too many constraints to change can be extremely successful in rapid paced industries. We therefore identify a significant opportunity for Vodafone to emerge into new markets in the future.iReferencesVodafone, (2007). Annual report 2007. Retrieved November 6, 2007, from vodafone.com weathervane site http//www.vodafone.com/etc/medialib/attachments/agm_2007.Par. 62252.File.tmp/Vodafone_RA_2007_web.pdfDatamonitor, (2007 July 26). Vodafone group plc, compan profile. Retrieved November6, 2007, from EBSCOhost Web site htt p//web.ebscohost.com/ehost/ pdf?vid=7hid=3sid=6cebab29-68f7-4981-b9c3-485f73f9fcb1%40SRCSM1