COURSEWORK TITLE:
INTERNATIONAL STRATEGY OF THE VODAFONE GROUP PLC
Contents page
1. Introduction
2.Company Background
3.Evaluation of the internal and external environment of the company
4.Analyse the motivation of the company for international expansion
5.Analyze the reasons for operating in a particular region or country
6.Evaluate its market entry strategy in a particularly region or a country
7.Conclusion/recommendation
8.Bibliography
9.Appendix
1. Introduction
The aim of this report is to research into the Vodafone group and their entry into the Indian
Market. The research was carried out of Vodafones history, their existing market strategy,
the internal environment of the company and external environment of their home market.
Also it has been explained what Vodafone international strategy is and why there is such
interest in the emerging market. It is also focused on the reasons that Vodafone chose to
enter the India market and why the mode of entry they used was chose a joint venture
rather than starting moving to a new country using their existing UK strategy.
The following theories and analysis has been used;
* Porter five forces
* Prahalad and Hamels core competencies
* SWOT analysis
* PEST analysis
The sources used to carry out this research include secondary information which is the
Vodafones annual report, internet resources and also the course Textbook.
It then concludes into what kind of problems Vodafone may face, whether they made the
right entry mode and suggest an alternative entry strategy.
2. Company Background
Vodafone Group Plc is the worlds leading International mobile telecommunications Group,
with a major presence in Europe, the Middle East, Africa, Asia Pacific and the United
States through the Companys subsidiary undertakings, joint ventures, associated
undertakings and investments.
Vodafone Groups main business is to enrich their customers lives by enabling them to
communicate in an increasingly connected world. They provide a range of voice and data
mobile telecommunications services, which includes text messages, picture messages and
other data services.
Customers have voted with their phones to make Vodafone Group the worlds 2nd wireless
phone services provider with nearly 187 million customers.
Vodafone was formed in 1984 as a subsidiary of Racal Electronics Plc; at this time it was
known as Racal Telecom Limited. Vodafone first launched in the UK with the first national
UK network on 1 January 1985 and since then have expanded from their UK base market
by taking over or being in partnerships with other telecommunication companies around
the world. They operate in 27 different across 5 continents.
Here are few high points of Vodafones history:
* 1990: Vodafones customer base reached 0.5 million
* 1993: Vodafone Group International is formed to acquire licences and supervise overseas
interests.
* 1996: Vodafone is the first network operator in the UK to launch a Pre-Pay analogue
package
* 1999: Vodafone completed its purchase of AirTouch Communications, Inc. and changed
its name to Vodafone AirTouch plc
* 2000: Reverts to its former name, Vodafone Group Plc
* 2005: Launch of Vodafone Simply, a new easy-to-use service for customers who want to
use voice and text services with minimum complexity
* 2006: Announces the biggest loss in British corporate history (14.9 billion) and plans to
cut 400 jobs; reports one-off costs of 23.5 billion due to the revaluation of their
Mannesmann subsidiary.
* 2007: Vodafone agrees to buy a controlling interest in Hutchison Essar Limited, a
leading operator in the fast growing Indian mobile market
This establishes that Vodafone have grown rapidly through gaining and has highly
developed its goal which was to offer great and well enhanced service to their customers.
3. Internal and external environment of Vodafone
Every company will focus on how to keep the environment surrounding their company
harm free, therefore as every company Vodafone has its own safety for their environment.
In order to focus on how to analyse and evaluate the Internal and external environment of
Vodafone, the following analytical tools will be used:
Internal Environment of Vodafone:
* Core competencies
* SWOT analysis
External Environment of Vodafone:
* Pestle analysis
* Porters five forces
Core competencies
Core competencies are the capabilities that are critical to a business achieving competitive
advantage. The starting point for analysing core competencies is recognising that
competition between businesses is as much a race for competence mastery as it is for
market position and market power. (Prahalad and Hamel)
There are three analysis, which should be applied when identifying and developing core
competence of Vodafone:
The core competence should:
* Provides potential access to a wide variety of markets
* Mark a significant contribution to the perceived customer benefits of the end product
* Make it difficult for competitors to imitate
In order to provide potential access to a wide variety of markets, a company should attract
customer using a number of different services for example multimedia so they are not just
focused on the mobile telecommunications, they are broadening their product line.
Vodafone customer base ranges from the young to the corporate user to the more mature
market.
To mark a significant contribution to the perceived customer benefits of the end product,
Vodafone marketing strategy aim is to grow its revenue and improve its profit margin by
adding value to its products and services i.e. earning more from each product sold.
They are doing this by offering a range of multimedia service which is tailored for the
consumer as well as the corporate consumer. These services help attract new customers
who maybe unsure of which network to go to and keep the existing customer base happy.
It is difficult for competitors to imitate as they focus on a strategy of customer focused and
product led; the company is continually developing new products and services which
utilise the latest technological advances. This means they focus on a value plus strategy
