Write the Source of sustainable competitive advantage.
The aim of the paper is to conduct strategic analysis of a corporation. Vodafone has been selected as the organization for this particular study because it has worldwide presence and deals with both product and services. Headquartered in London, Vodafone operates in the regions of Asia, Africa, Europe and Oceania. Vodafone ranks fifth by revenue and second in terms of number of connections (Vodafone.com 2017). Vodafone operates in 26 countries and the company is also partnered with over 50 countries’ networks. The study aims at identifying the product and service portfolio of the organization and the resources that has helped the organization to create a stand on the market. A detailed analysis of the business unit and sustainability of the products and services of the organization shall be carried on in the study. Based on the analysis, certain recommendations shall be made to improve their strategic business operations.
A corporation is a large company or group of companies that is authorized as a single entity and has been recognized by the law (Moore 2016). Vodafone is a public limited telecommunication company that provides worldwide service. The Company has a wide range of product and service portfolio.
Product and service portfolio:
Product portfolio: Product portfolio is a range of items sold by a particular business unit (Kraiczy et al. 2014). The products sold by Vodafone include:
Handsets: Vodafone has launch more than 100 mobile phone models
Smart phones: The handsets that include the accessibility to email and internet
Accessories: Headsets and headphones, memory cards, chargers (Vodafone.com 2017)
Service portfolio: The service portfolio represents the services managed by the particular business unit. Some services can be either visible to the customers while some might not. The services offered by Vodafone are:
Voice and messaging services: National, international and roaming call facilities
SMS service including multi-media services lie pictures, music, sound, text etc.
Customer care service: The Vodafone stores that provide both before and after sales services (Vodafone.com 2017).
Business Unit Research:
A single business unit of Vodafone that has been identified is the marketing and sales department. Vodafone has regional sales unit in all the countries where it operates. Vodafone stores are the sales and customer service units that are available in the regions of the business operation (Vodafone.com 2016).
Business Unit: The particular segment of a company that represents a specific business function is called the business unit. These segments include marketing, sales, customer service, accounting and finance (Comerio et al. 2015).
Product and service lines identification:
Group of products sold by Vodafone is mobile hand set, smart phones and related mobile accessories. The service lines of Vodafone are voice and messaging service, data and fixed broadband service and others that provide total communication strategy.
Product line: Product line has been defined as a group of related products sold by a single brand (Galbraith 2014). Many companies are found to sell range of products under their brand name.
Service line: Grouping of all products and services related to a particular division of business is called service line (Crowley 2017).
Business unit revenue:
Product and service creating largest revenue: It has been identified that the telecom service of Vodafone generates the maximum revenue for the Company. There are several billion users generating over US$960 billion annually. Majority of the revenue is earned from the calls and texts (Vodafone.com 2014). However, the demand of data subscription has increased such as internet browsing on the smart phones. Even in the competitive market trend, Vodafone has been able to generate US$ 51.5. Other products and services of Vodafone also generates good amount of revenue for the Company but its service for phone calls and internet has been generating most revenue for the Company.
Revenue: Revenue can be defined as the income that a business has from its business activities. The revenue of a company is generated from the sales of goods and services to the customers (Bertini and Tavassoli 2015). In fact, revenue has also been referred to as the sales or turnover of the business.
External environmental analysis:
The most vital business unit that has been identified is the marketing and sales unit of Vodafone. Vodafone has its exclusive Vodafone Stores are present in every region where it operates and provides services to the consumers. PESTEL analysis of this particular business unit shall be carried on:
Governmental policies like free trade have helped the company to carry out their business activities in a wider perspective. Vodafone has been found to make effective choices of the political situations where it operates (Vodafone.com 2014). Considering the increased competition in the market, it has become important for the Company to make proper marketing and sales approach to boost their sales in the areas of operation.
The economic condition worldwide has been found to improve after the drastic period of recession. Major population of the countries is found to make good amount of expenses on the telecommunication on calls and internet. Keeping this situation under consideration, it has been evident that Vodafone has been eligible to open up their stores in the major areas where it operates (Comerio et al. 2015).
In the market of increasing competition, serving consumers correctly is the major lookout of an organization. Keeping this fact into consideration, it has to be said that Vodafone stores are exclusively meant for the customer care service (Kraiczy et al. 2014). Vodafone offers online and customer care service via voice calls as well. However, in order to create better image of the company and to serve the customer’s right, it carries out its marketing activities efficiently.
21st Century has seen a revolution in the field of technology. The advent of the social media sites like the Facebook and Twitter has changed the way marketing and sales was carried on. Keeping the same perspective into consideration, it has been evident that Vodafone has its own Facebook and Twitter pages where it communicates with consumers effectively and at times resolve their queries and issues. In fact, the company has its separate accounts for different regions of operation. Therefore, it can be said that marketing and sales operation are effectively carried on by this company.
Environmental concerns have been highlighted in the recent time due to the degrading nature of resources and the increasing carbon footprint it has become important for the companies to consider the environmental concerns as well (Bertini and Tavassoli 2015). It has been found that Vodafone has been undertaking sustainable approaches in its business activities to operate in the market.
Legal factors like labor law, health and security of the employees at the workplace or workplace ethics are the factors that the organization has to consider for operating in the business environment. Vodafone has been found to engage in certain corruption activities related to its tax payment and non-transparent activities in the business.
Political factor: Political factors signify the government policies that affect the operation of a business. The factors include government policies, political stability or instability in the major market of operation (Bertini and Tavassoli 2015). The factors also include foreign trade policies, tax policies, labor law, trade restrictions and other such factors.
Economic factor: Economic factor helps to determine how profitably an organization can operate in the particular region of operation. The economic factors are economic growth, interest rate, inflation, GDP and per capita income of individual (Casey 2014). The taxation policy and government expenditure are also included in the economic factor.
Social factor: The socio-cultural factors are the areas that involve shared values and beliefs of the population of the country where the particular company operates (Comerio et al. 2015). The social factors also include population growth, age distribution, career attitude and others. These factors help the marketers to understand the demand of the consumers and the marketing can be carried on accordingly (Anton 2015).
Technological factor: Technological factors that impacts the way an organization market its products. Technological factors also help in producing goods and services and distributing the same in a unique way. In addition to this, technology also helps in better communication with the consumers of the market (Rachet 2014).
Environmental factor: Due to the scarcity of resources and raw materials along with increasing population has made it an important factor for the organizations to consider doing their business in a sustainable and ethical way (Makos 2015). Therefore, the service or the products are designed in a way that would create better sustainable approach towards the environment.
Legal factor: Legal factors include taking care of the essential things like health and safety, equal opportunities, measuring advertisement standards along with consumers’ rights and freedom. The organization should be responsible for carrying out their business operation legally.
Operating environment: Operating environment or the external environment of an organization are the factors outside the particular organization that can affect the organization’s ability to function (Kraiczy et al. 2014). These factors are political, economic, socio-cultural, technological, environment and legal. Vodafone operates worldwide and thus, the worldwide regions can be considered as the operating environment. The major operating environments include Australia, UK and Asia.
Source of sustainable competitive advantage
Source of sustainable competitive advantage: Vodafone has been operating in a highly competitive market around the world. Vodafone has to compete both with the global telecommunication companies like Airtel as well as with the regional companies Vodafone.com 2014. However, the Company enjoys a number of sustainable competitive advantages that help the Company to operate successfully even in the competitive markets. These resources are:
Human resource: The human resource of Vodafone is most eligible and the effective team of workers who are the pillars of the strategic business activities of the organization (Kraiczy et al. 2014).
Worldwide presence of the company: The Company is present all around the globe in the major countries like Australia, UK and Asian countries like India, China Vodafone.com 2014. It is for the same reason this company has a rigid brand power that is one of the major resources of the organization.
Innovation as a means of development: The marketing and the business activities of the organization has taken innovative approaches with the help of technological advancement. Therefore, innovation as a part of their strategic management is an important resource of the organization.
Technological resources: The Organization is connected with the world with the technological advancement available to the organization. These resources help the company to hold the position where it is present in the telecommunication market.
Four factors of sustainable competitive advantage: The four factors for sustainable competitive advantages are:
Valuable resources: Some resources are valuable for an organization that adds to the success factor of the company (Comerio et al. 2015). These resources add value and enable the firm to exploit the opportunities available in the market and defend any kind of threats (Saleem et al. 2015). The value of the resources also increases valuable if the organization is capable of improving the perceived customer’s value.
Rare resources: The resources that can only be acquired by a few companies to grant them temporary competitive advantage in the regions where it operates are the rare resources (Bertini and Tavassoli 2015). It also depends on the other competitive companies in the market as to how they utilize the resources and implement the same in their strategic plans.
Imitable resources: The resources available to a particular organization that cannot be imitate, bought or substitute by any other resource available in the market at a reasonable price are the imitable resources of the firm (Forsman 2013). The reason that the particular resource cannot be imitate might be related to historical condition, any kind of casual ambiguity or social complexity.
Organizing the resources: The final step of the sustainable approach towards the competitive advantage towards the market where it operates is the ability of the organization to utilize the available resources to them (Albrecht et al. 2016). These resources could be financial resources as well that the organization could use to sustain their work on the market where they operate.
Recommendations for future strategic direction: As it has been evident that Vodafone has been operating in a highly competitive market and the Company has been successful in utilizing the resources and capabilities of the organization, it can be said that Vodafone is a successful organization in its business (Vodafone.com 2014). However, certain recommendations can be made that might further help the organization to create better domination in the market where it operates.
Better marketing strategy: Vodafone is well known for its Zoo-Zoo as the advertisement character. It has been accepted among the consumers largely. Previously, the Company used the Pug as the character for the advertisement (Bertini and Tavassoli 2015). Therefore, it is recommended that the Company shall come up with more innovative approaches in its marketing strategies.
Strategy to connect to consumers directly: Vodafone has its active social networking pages where it connects with the consumers easily. However, there have been many complaints regarding the voice service of the organization. Therefore, it is expected that the organization should undertake better approach to connect with its consumers easily.
Better utilization of the human resource: Vodafone takes great pride with the human resource that the organization has (Albrecht et al. 2016). Therefore, it is expected that the organization would utilize the team of human resource to carry out its organizational activities.
Strategic direction: The critical enabler for governance for development projects that can trace the requirement to achieve the goals and objectives of the organization is called the strategic direction of an organization (Quinn 2015). Strategic organization is aligned with the portfolio of work to achieve the strategic goals that ultimately helps an organization to do the right things in the business.
A detailed analysis of the strategic management of Vodafone has been done in the study. Various terms related to the strategic management has been discussed in the paper. The product and service portfolio of the organization has been identified. It has been found that Vodafone has its own exclusive range of mobile and smart phone products. The telecommunication and the data service are the services that generate the most amount of revenue to the organization. Vodafone has a number of resources that supports its sustainable competitiveness in the market where it operates. It can be easily said that its worldwide presence has helped it to create a positive brand image in the market and helped the organization to compete with the global and regional telecommunication companies. Based on the analysis, a number of recommendations have been made that shall help the organization to improve its strategic management and operate successfully in the market.
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