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Applied Corperate Strategy

University: N/A

  • Unit No: 18
  • Level: High school
  • Pages: 16 / Words 3928
  • Paper Type: Assignment
  • Course Code: N/A
  • Downloads: 340
Question :

This sample will let you know about:

  • Discuss about the role of CSR ?
  • How does Vodafone's corporate strategy edge in the UK telecommunications?
  • What are the key opportunities and threats through the PESTLE analysis?
Answer :
Organization Selected : Vodafone

INTRODUCTION

Corporate Strategy refers to a combination of all the procedures, processes and techniques which an organisation uses in order to gain competitive edge within the marketplace, along with enhanced sustainability (Zerfass, and Viertmann, 2017). Furthermore, it is necessary that organisations develop and apply such strategy to gain a better market position and higher scope of profitability and revenue. Hence, in this relation, the report below is based on Vodafone Plc, which is one of the most recognised and preferred telecommunication organisations in the United Kingdom. The assignment would be focussing on the acquisition by the company of European Liberty. Moreover, a detailed external environment analysis would be covered within the report, along with an internal analysis to find out the firm's internal strengths, weaknesses and capabilities. In addition, the report would also be addressing evaluation of its strategy of acquisition through application of SAF Criteria.

EXTERNAL ANALYSIS

PESTLE Analysis

One of the most important considerations of a business organisation is that they are required to analyse their external business environment which actively or passively influence the working and functioning of a company. Hence, in this relation, below is an application of PESTLE analysis in context of Vodafone which would be helping in identifying opportunities and threats:

  • Political:

This is one of the important factor in the external environment and industry as a whole is influenced through factors available in the political environment of UK. Introduction of BREXIT brings huge amount of instability in the political environment of telecommunication sector in UK. In the present time telecommunication services has turned out to become necessary services in different sectors such as education, employment and all business ventures. Political instability that BREXIT has introduced in UK has hampered different businesses. Establishment of new businesses and expansion of current business become quite unreasonable. Instability in the businesses are termed as an threat as in long run all the activities will be suffered. In order to cope with the political threat in UK business organisations like Vodafone may acquire other organisation to become more stable (Zhu, and Chen, 2015). As each organisation is strong at some factor and by acquiring such organisation which is strong in area in which Vodafone is lacking then this instability can be minimised.

  • Economical:

Their are several factors combined to make a economy work as desired and targeted. Certain economical factors such as foreign exchange rate, inflation rate, rate of interest and savings possess grate impact on the economy. These factors may generate positive or negative impact on the economy. For example- Tourism industry is contributing 217 Billion British Pounds in UK and providing huge amount of employment opportunities. Economy of UK is facing grate amount of deflection due to BREXIT. Telecommunication industry is getting threat with this unstable economical condition of UK's economy. When rate of Pound is decreasing then purchasing power and capital contribution of businesses in telecommunication sector is affected in negative manner. Growth rate of telecommunication sector is decreasing and due to high rate of inflation organisations like Vodafone is suffering huge amount of losses. As rate of Pound is decreasing and Vodafone while dealing at global level is facing huge amount of losses. This issues can be controlled to a certain level by merging two organisations to become more financially viable.

  • Social:

Their are number of social factors that creates a grate impact on telecommunication business in UK. Age distribution, change in taste and preference of consumers, consumer buying pattern, level of education and income level are some of major social factors that affects business of organisation like Vodafone in UK. In UK population which uses services provided by telecommunication organisations is increasing with higher rate as usage of internet and mobile is boosted. High demand, preferable age distribution and favourable change in taste and preference of consumers brings a growth opportunity for business. To grab this opportunity in better and preferable manner two or more organisations can join their hands. Providing more technological services with this merger will provide better services to consumers in the industry and generate better results.

  • Technological:

These factors are related to all the technological advancements within the overall country that has a direct impact on the telecommunication sector of the UK. Hence, in this context, there are certain technologies such as SD-WAN, along with AI and Automation, that could be prominent opportunities within the overall industry, due to enhancement in effectiveness in processes, as well as products.

  • Legal:

Different rules and regulations are implemented on businesses while performing business activities in different nations around the globe. Various laws such as health and safety laws, employment laws, discrimination laws, equality law are applicable on all the business organisations. In UK laws and regulations that are applied on telecommunication businesses are strict and each business needs to follow such rules in order to perform in legal and valid manner. At the present time there is high amount of legal instability in UK in all form of business organisations. The high amount of uncertainties in the legal environment of business is served as a threat to business because business losses their power to anticipate future in more certain manner. When anticipation of laws become complex then threat of legal compliances arises for organisations like Vodafone working in the telecommunication industry. As frequent changes as per political and environmental situations are made in the legal policies of the business and complying with all these changes become difficult and threat in long run.

  • Environmental:

The UK business environment has been currently very much focused upon the environmental concerns that are being evident within the nation. Moreover, there are environmental protection policies and legislations that are required by the companies within the telecommunication industry to follow as part of their CSR activities. This represents the sector and companies like Vodafone with an opportunity to gain government and communal support through enhance their sustainable networking practices which would contribute in protection of the environment (Rugman, and Verbeke, 2017). For get Assignment Writing Service Uk talk to our Experts.

Porter's Five Forces Analysis

This framework is associated with essential analysis of the industrial attractiveness of the sector based on several forces which have an impact on the working of companies. Hence, in relation to the telecommunication industry of the United Kingdom, Porter's Five Forces Analysis is applied below:

  • Supplier's Bargaining Power:

These are the individuals who supply the company with effective and essential raw materials that are essential to manufacture the finish goods. In relation to the telecommunication industry within the UK, the number of suppliers are quite large due to ample number of buyers and organisations. This leads to a moderate bargaining power of the suppliers due to the fact that the switching cost in this industry is quite low. Moreover, the suppliers provide their materials at fairly standardised pricing, which again reduces their bargaining power with respect to the industry and companies like Vodafone.

  • Buyer's Bargaining Power:

These individuals are the reason for existence of an organisation as they buy the offerings of the company. In context with the telecommunications industry, the switching cost for buyers is very low due to the competitive pricing strategies by organisations such as Vodafone. This enhances the bargaining power of suppliers for the industry and its companies. However, in order to deal with the same, Vodafone is required to differentiate its offerings and innovate in relation to ensure decrease in this bargaining power.

  • Threat of Substitutes:

These are the products and service that could be used in place of the offerings by an organisation. Furthermore, in context of telecommunication industry, there are several substitutes within the sector such as Instant Messaging, IP telephones, etc., which enhances the threat for businesses within the sector such as Vodafone. Hence, in order to deal with the same, the firm could ensure merging or acquiring similar smaller scale companies to enhance its market share and cope with the trend (Parawansa, 2015).

  • Threat of New Entrants:

Setting up a business organisation is very difficult within the sector due to heavy investment, supply chain management and marketing activities. Hence, it reduces the threat for new entrants for the sector. However, there are certain companies such as BT Group which are bringing in new ways of doing business by SD Wan Technology which is a coming of age technology being used by new organisations. Hence, this threat is high for Vodafone. To ensure decrease within this, the firm must continuously work upon innovation of its services and processes to access new breakthroughs in technologies to enhance its competitive positioning.Want to get management assignment help ? Talk to our experts.

  • Existing Competition:

There are certain organisations within the UK, such as Virgin Mobile, EE and U2. These organisations work with effective innovation and better quality services within the United Kingdom. Moreover, due to competitive pricing within the industry, these companies offer their services at somewhat medium to lower price range, which enhances their threat for other players such as Vodafone. Thus, to tackle this issue, the organisation must focus on differentiating its offerings which would allow the firm to exercise better functioning within the marketplace.

INTERNAL ANALYSIS

TOWS Framework

INTERNAL ANALYSIS OF VODAFONE

STRENGTHS (S)

WEAKNESSES (W)

  • Effective Brand Image
  • Diverse Range of Products
  • Innovative Capacity
  • Inappropriate Marketing
  • Unethical Functioning
  • Reduced Investment Capacity
 

OPPORTUNITIES (O)

  • New cellular trends within the UK
  • Emerged technologies like SD-WAN and AI
  • High emphasis of the sector on CSR
 

THREATS (T)

  • Political Instability
  • Inappropriate Economical Environment
  • Uncertain Regulations
 

 For an organisation like Vodafone, it is very much necessary that the internal strengths and weaknesses of the company are evaluated and analysed against the threats and opportunities which the firm experiences externally. Thus, the TOWS analysis of the company below provides an insight of how the firm could ensure enhancement of opportunities and reduction in threats:

  • Strengths/Opportunities (SO):

As reflected above, there are certain strengths, as well as opportunities that are available with Vodafone, which could appropriately be accumulated together for the company to enhance its performance within the marketplace (Minár, 2016). For instance, the firm has an opportunity related to new domestic trends within the UK associated with telecommunications, which could appropriately be achieved by the company through diversifying its products and services. Furthermore, another strategy available with the firm is related to emerging technologies such as AI and SD-WAN. This opportunity would be grabbed by the organisation through its innovation capacity, by innovating new products and processes through which would be using these technologies in an effective manner.

  • Strengths/Threats (ST):

Alongside certain opportunities, there are several threats with the organisation as well, which must be analysed against the strengths within the company. As an example, there has been political instability prevailing within the United Kingdom. Hence, this threat could be reduced by the firm's brand image, which would allow the firm to maintain its supply chain even after uncertain policies (Marková, and Lesníková, 2015).

  • Weaknesses/Opportunities (WO):

This quadrant deals with how the opportunities within the marketplace could help the company in improving its weaknesses. For instance, the overall telecommunication sector within the United Kingdom has started to get very much inclined towards effective CSR practices that are related with effective working with each and every stakeholder of the company. Hence, this would allow to firm to improvise its ethical work frame associated with several tax issues which the firm faced sometime ago.

  • Weaknesses/Threats (WT):

One of the biggest threats with the company is associated with uncertain regulations due the events of Brexit. Hence, this would lead to further challenges related to the weak investment capacity of the company, as well as ineffective marketing.

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Value Chain Model

PRIMARY ACTIVITIES

DISTINCTIVE COMPETENCES

SUPPORTING ACTIVITIES

COMPETITIVE ADVANTAGE

Inbound Logistics

Supply Chain Management

Procurement of Raw Material

Reduction in Cost

Operations

Manufacturing of towers and SIM Cards

Innovation in services

Improvement in operational efficiency

Outbound Logistics

Facilitation of Network across UK

Infrastructural Development

Improved Service Quality

Marketing & Sales

Promotion through Social and Traditional Media

Introduction of new marketing techniques

Enhanced Brand Awareness

Services

After Sales Services

Customer Service training

Customer Retention

VRIO

This framework is associated with determining the company's capabilities and resources which would allow the firm in gaining competitive edge within the marketplace. For Vodafone, this analysis is performed as under:

COMPETENCIES

VALUE (V)

RARE (R)

INIMITABLE (I)

ORGANISATION (O)

COMPETITIVE ADVANTAGE

Supply Chain Management

Supply Chain Management

-

-

-

Temporary Competitive

Infrastructure

Infrastructure

Infrastructure

-

-

Temporary Competitive

Technological Capabilities

Technological Capabilities

Technological Capabilities

Technological Capabilities

-

Partially Competitive

Human Resources

Human Resources

Human Resources

Human Resources

Human Resources

Sustainable Advantage

It is an effective tool which is associated with appropriate and effective evaluation of several resources, along with the capabilities of the company in getting appropriate competitive edge within the marketplace. Hence, as per the above display, below is an analysis of the most competent resource within Vodafone:

  • Valuable:

Human Resources are very much valuable within the organisation, as they support the company towards their logistics and operations.

  • Rare:

It is quite rare for other companies to find employees with similar intellect and competence, which enhances the uniqueness of this resources in context of Vodafone (Keyes, 2016).

  • Inimitable:

One of the major attributes within the human resources of Vodafone is that they are very much inimitable. The reason for this is because it is practically impossible for employees of other organisations to imitate the talents and skills which are possessed by these individuals. In addition to this, the innovation through which they manage the activities associated with facilitation of network within the United Kingdom is also very much untraceable due to uniqueness of these ideas.

  • Organisable:

Human Resources within Vodafone are very much organisable. The reason for the same is that different types of trainings are provided by the organisation to these individuals, such as training related to new technologies and equipments for manufacturing purposes, affiliation with new marketing techniques, along with after sales services needed by the company, which helps these resources to support the activities of the firm in an effective manner (Hong, and et. al. 2019).

EVALUATION

SAF Framework

Managers and other executives within an organisation are required to evaluate the firm's strategy which the company has undertaken appropriately. In context with Vodafone, the firm has quite recently announced its plans to appropriately and effectively acquire European Liberty by acquiring its shares in CEE and Germany (VODAFONE COMPLETES ACQUISITION OF EUROPEAN LIBERTY GLOBAL ASSETS, 2019). This phenomenon refers to acquiring the shares and other resources of an organisation to work together with the firm to achieve corporate objectives effectively (Scholes, Johnson and Whittington, 2002).Hence, it becomes necessary for the organisation to evaluate the same, for which SAF criteria is being utilised below:

  • Suitability:

The suitability of this strategy could appropriately and effectively be evaluated against the above mentioned TOWS analysis. As analysed, the company has certain opportunities lined up in context of new technologies such as SD-WAN and AI, which could be better accessed by the company through using new and innovative mindsets of individuals of European Liberty. Moreover, its weakness associated with ineffective investment capacity could also be overcome through pooling its financial resources with that of the acquired organisation, making improvements within the organisation and its investments. Thus, in this context, the strategy of Vodafone of acquiring European Liberty is very much suitable for the organisation.

  • Acceptability:

In context of Acceptability, the firm must evaluate the strategy in context of stakeholder analysis to ensure that this new step by the firm is very much accepted by all the associated individuals of an organisation.

Hence, in this regard, the stakeholder analysis of the company is performed below:

 

LEVEL OF INTEREST

LEVEL OF POWER

 

High

Low

High

Investors

Customers

Low

Employees

Suppliers

 

As per the above analysis, there are three stakeholder groups within Vodafone which would be impacted the most by the acquisition of European Liberty. In this aspect, the impact of the same are evaluated below:

Investors: This stakeholder group has high power, as well as high interest level. This means that each strategy of the company would be having a major impact on these individuals. Moreover, their agenda is to appropriately get high returns on their investment. Hence, in terms of acquisition, the firm would be getting more customers who are loyal to the acquired company, better infrastructure and human resources which would allow the firm to gain higher returns (Grant, 2016).

Employees: These individuals have high interest as well as low power, which means that they do not have much say in decisions of the company, however, their interests are high (Cabrelli, 2016). After acquisition, the new employees would be required to work as per the rules and working of Vodafone, which might cause resistance. However, this could be dealt by the company through effective training and persuasion.

Customers: These individuals have high power and low interest, which means that these individuals are very much capable enough to mould the strategies of the company, however, requires fulfilment of their interests. Hence, the acquisition would allow the firm to present high quality products and services at fair prices, which would allow them to accept this strategy effectively.

  • Feasibility:

There are several skills and competencies which are needed within Vodafone in order to execute this strategy effectively. Such as due diligence, analytical and negotiation skills. Hence, this strategy is very much feasible due to the firm having necessary technical, financial and human resources within the same (Frandsen, and Johansen, 2018).

CONCLUSION

Thus, it is concluded from the report above that applied corporate strategy is one of the most essential concepts which must be analysed and implemented within an organisation in order to ensure accomplishments of its organisational objectives. Frameworks such as PESTLE Analysis and Porter's Five Forces helps in analysis of the external environment of a business which derives opportunities and threats for the same. Moreover, TOWS, Value Chain and VRIO analysis enables a firm to determine its internal strengths, weaknesses and capabilities. Lastly, it is necessary to apply SAF criteria, along with stakeholder analysis to ensure evaluation of the strategy which is being adopted by the organisation.

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