Vodafone - Business Strategy Analysis

Business Strategy Analysis

Vodafone identifies the evolving challenges in the macro economic environment. Within that environment, there is a competitive pressure that continues to be strong and contribute to the price declines. Also, the consumers have an increasing choice of service providers because of the close competition and new entrants. In addition, the mobile services are also regulated that contributes to the lower mobile terminations rates and roaming prices. Through the expected challenges, Vodafone increased their approach on the value enhancement and cost reduction.

Vodafone applied their creation of the business strategy that is composed of five essential parts. The company is very focus on the revenue stimulation and cost reduction in Europe. The company’s focus is applied in delivering the strong growth in emerging markets. The third part of their strategy is to continue their efforts in innovation and delivering the needs of the customers in terms of total communications. Vodafone also actively manage their portfolio to maximize the returns. And lastly, is to align the capital structure and shareholder returns policy to strategy.

Telecommunications and technology is continuously growing and inseparable. With that factor, all of the technological advancement will contribute and create an enormous impact in innovation and changes in communication. If the company will base their performance growth, they will surely recognize the impact of the technology which suggests that there is a need for transformation. Usually, the basic defense mechanisms of the businesses plays between the two factors, one is to assume the changes and the other is to ride in the current changes. And Vodafone strategically chose the first option. The company values the importance of being the first provider than being the second in the race where the competition is extremely high.

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