Environmental Analysis of Vodafone UK for Marketing Strategy

What Laws Are Being Proposed That May Affect Marketing Strategy And Tactics?

What Federal, State, And Local Agency Actions Should Be Watched? What Is  Happening In The Areas Of Pollution Control, Equal Employment Opportunity, Product Safety, Advertising, Price Control Etc., That Is Relevant To Marketing  Planning?

What Does The Company Expect In The Way Of Inflation, Material Shortages, Unemployment, And Credit Availability In The Short Run, Intermediate Run, And Long Run?

What Effect Will Forecasted Trends In The Size, Age Distribution, And Regional  Distribution Of Population Have On The Business?

What Is The Outlook For The Cost And Availability Of Natural Resources And Energy  Needed By The Company?

What Concerns Have Been Expressed About The Company’s Role In Pollution And Conservation, And What Steps Has The Company Taken?

What Attitudes Is The Public Taking Toward Business And Toward Products Such As Those Produced By The Company?

What Changes Are Occurring In Consumer Life-Styles And Values That Have a  Bearing On The Company’s Target Markets And Marketing Methods?

What Major Changes Are Occurring In Product Technology? In Process Technology?

What Are The Major Generic Substitutes That Might Replace This Product?

Corporate leaders can control the factors affecting the internal environment of a business however controlling the external factors is challenging.to overcome these challenges the corporate leaders perform macro and miro environment analysis to formulate strategies that the organization can adapt. This report is based on the environmental analysis performed on Vodafone UK. Vodafone is the first company in UK to have supported a mobile call in 1985 (more overview about the company is shown in appendix 1). The external analysis is done with the help of PEEST framework along with a micro analysis comprising of market, customers, competitors, suppliers, distributors and dealers. A marketing audit is performed using strategy, functions and productivity of Vodafone for the internal analysis. Based on the external and internal analysis a tows matrix is prepared. The report is structured in two sections: the first sections comprises of the macro analysis done with PEEST and the micro analysis, the second section mentions the internal analysis done with the marketing audit, conclusion mentioning about the strategic recommendation and the appendix mentioning the company overview and the analysis framework.

The external and internal analysis of Vodafone UK is illustrated in the entire discussion of this report.

The analysis of Vodafone’s macro environment is done through the PEEST framework. This will help to explore the potential threats prevailing in the macro environment and make the company aware beforehand (Kotlyk and Jamal 2018).

Macro Environment Analysis

With the advancement of technology, the government regulations and policies have also grown over the years. Government impose strict regulation on telecom industry as these firms use spectrums and generate high revenues. The policies include communication act, restriction on network access facilities, which are affecting Vodafone (Klauer 2014)..

Rigorous environmental regulations are imposed on the telecom industry, which includes recycling of waste, proper handling and disposal of e-waste, prohibition on ample usage of high frequency phones. This environmental threats are affecting Vodafone to which they have responded by reducing their waste to half (Klauer 2014).

A business in the telecom industry is capital intensive, it needs to build infrastructure and attain resources to stay ahead of competitors. Recently Vodafone UK has merged with O2 to reduce their expenditure on infrastructure, implementing 4g and 5g also required a major capital investment. However, the advancement in technology has created a demand among the consumers thereby increasing the turnover and contributing to the nation’s GDP (Klauer 2015).

The lifestyle of people changes according to the social trend, which affects the buying habits. The recent growth of internet among consumers has been a boon for Vodafone. Most people use internet to a large extent daily which increases the demand for network.

Over the years, Vodafone has grown extensively with the use of technologies like 5g, artificial intelligence, loT and by providing excellent customer service. The company has provided their users with myVodafone app, which would give access to different services offered by Vodafone (Kerr and Moloney 2019).

Micro environment analysis those factors which the decision making process and strategy of a business. Listed below are the factors affecting Vodafone.

Vodafone holds a market share of 21.3% in U.K. and the company is the leading telecom operator in U.K. Their brand value worth more than 39.7 billion U.S. dollars. Through implementing innovative strategies and turning their customers into their fans Vodafone has been able to become the leading brand globally as well. Vodafone earns a revenue of 13% from U.K. however, the less population growth in U.K. and the high capital investment makes the company face growth challenges (Singh 2014.).

The targeted customers of Vodafone include individual, business enterprises, corporates, business professionals and MNCs. 86% of the population in UK uses internet daily with an average of spending six hours on internet. The customers have high brand loyalty however, their expectations are also high. The people of UK take price as the most deciding factor for buying any plans therefore Vodafone had to lower their price to be competition with their peers. The customers have a high brand loyalty therefore Vodafone should focus on their service quality to retain their customers for long time purpose (Mollah and Sharif 2014.).

Political/Legal

In U.K. telecom market Vodafone faces rivalry from O2, EE limited, Talktalk Electra and BT. The major resources of Vodafone include efficient human resource and technological development infrastructure which provides the company a competitive advantage. They have also introduced a low pricing strategy to stay ahead from their competition. To gain a sustainable competitive advantage Vodafone should implement strategy for product development and market development. The recent telecom market of U.K. is facing threat from substitutes as the youth prefer instant messaging apps or free calling apps which are provided by the substitutes (Al-Atiqi and Mumen 2014).

Forbes has ranked Vodafone 395^th in the world’s best 2000 brands. The company has a wide distribution network. Vodafone mainly uses their distribution channel for marketing, promotion, advertising of their products and services. They invest quite a lot amount of money for promotion to keep the mass engaged and entertained.

The supply chain management team of Vodafone manages the risk and value procurement activities of Vodafone in the marketing section. They manage the risk by handling the stakeholders of the company and developing strategy according to the market conditions and challenges (Kerr and Moloney 2019)..

A marketing audit refers to the systematic examination, evaluation and interpretation of the marketing factors prevailing in the business environment. Through this audit the strategies and objectives are formulated which helps to avoid the approaching threats and enhance the market performance by using the opportunities and key resources. The components of a marketing audit include task environment, marketing strategy, marketing organization, marketing system, marketing productivity, marketing function and macro-environment audit (Al Fahad, et al. 2015). A marketing audit for Vodafone UK has been carried out below. In this audit the marketing strategies, marketing productivity and marketing functions are discussed in respect to Vodafone. The framework of marketing audit is shown in Appendix 4.

The corporate objective of Vodafone is to include their name among the world’s top five brands. Therefore, the company is expanding their global presence through extensive marketing strategies, acquiring new customers and using advanced technology. Vodafone’s marketing strategies involve customer engagement, they have started a programme called customer experience excellence (CXX) to offer a different experience to their customers which will increase their position in the market. Vodafone uses digital technology for their marketing purposes, they are also planning to invest in digital apps like cloud to acquire more customers (Alim and Ozuem 2014).

The profitability analysis of Vodafone shows that the company has a score of 4.00 which is much higher than its competitors therefore Vodafone has a high profit than its competitors. The introduction of 5g has brought in revenues for the company, they have acquired 3400 MHz spectrum in UK to support the 5g. Vodafone uses big data analytics, robotics and artificial intelligence to increase their customer base and reduce their operational cost. The use of digital technologies also helps to reduce the cost of their distribution channel by sustaining from paying any commission (Kerr and Moloney 2019).

• ProductàVodafone offers a diversified range of products from call facility, internet access, gaming facility, to SMS and e-mail facilities.
• PlaceàVodafone UK have a wide network access reaching over 354 stores among the country. By having a physical presence it provides a shopping experience to the customer as they get the product knowledge from the sales team. Vodafone is also present in different social media platforms (Holmes, Byrne and Rowley 2014).
• PriceàVodafone has different pricing policy for different products. It includes tariffs plans for different services like data and voice calls. In U.K Vodafone offers NECTAR points to reward the money spent over its network.
• PromotionàVodafone implements effective promotion strategies like the Zoozoos advertisement, sponsorships and charities and several community initiatives. Also offers promotions on call and data to sustain customers.

A TOWS matrix is the derivation of SWOT analysis. TOWS stands for Threat, Opportunity, Weakness and Strength designed by professor Heinz Weirich. The Tows matrix is used to identify the opportunities and threats prevailing in the external business environment and formulate for the same (Gürel and Tat 2017.). The TOWS matrix from the external analysis of Vodafone is carried out below:

• SO: Vodafone is one of the biggest organization and by expanding their 4g services and high speed internet to more people they will achieve growth.
• OW: Vodafone is charging higher prices than their competitors, they should utilize their organizational resources and reduce their service price.
• TS: As the youth wants more internet facilities is lesser amount of price the company should charge less to increase their customer base (VAVROVA and KLINGER).
• WT: By conducting a market audit Vodafone can set up a pricing strategy and reduce their operating cost accordingly to decrease the network cost.

Conclusion

Hence concluding from the above report, currently Vodafone is the market leader in the telecom industry. However to sustain this position the company should implement new innovative strategies to overcome their challenges. From the external and internal analysis of Vodafone few recommendations are developed for the future. The main potential of Vodafone is their in depth market knowledge, resources and global access. In terms of marketing Vodafone only does advertising which seems a very strategy, the company should indulge more in celebrity endorsement. To enhance their brand image they should collaborate with research and development team of cancer research and some other local concerns for making more safer handsets.

References

Al Fahad, A., Al Mahmud, A.R., Miah, R. and Islam, U.H., 2015. Marketing audit: A systematic and comprehensive marketing examination. International journal of scientific & Technology research, pp.215-221.

Al-Atiqi, A. and Mumen, F., 2014. The Strategic Alternatives of Vodafone UK in 2009.

Alim, S. and Ozuem, W., 2014. The influences of e-CRM on customer satisfaction and loyalty in the UK mobile industry. Journal of Applied Business and Finance Researches, 3(2), pp.47-54.

Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International Social Research, 10(51).

Holmes, A., Byrne, A. and Rowley, J., 2014. Mobile shopping behaviour: insights into attitudes, shopping process involvement and location. International Journal of Retail & Distribution Management.

Kerr, W.R. and Moloney, E., 2019. Vodafone: Managing Advanced Technologies and Artificial Intelligence.

Klauer, T., 2014. Valuation of Vodafone Group, 20 May 2014.

Klauer, T., 2015. Valuation of Vodafone Group.

Kotlyk, A.V. and Jamal, Y., 2018. Methodical approach to analysis of volatility, uncertainty, complexity and ambiguity of the external environment. Актуальные проблемы инновационной экономики, (4), pp.65-69.

Mollah, A.S. and Sharif, A., 2014. The impact of relationship marketing on customer loyalty at Tesco Plc, UK. European Journal of Business and Management, 6(3), pp.21-55.

Singh, P.N., 2014. Verizon acquired Vodafone: Analysis of market reaction. Industrija, 42(3), pp.163-182. Vavrova, m. And Klinger, t., Marketing Plan Of.