Vodafone Telecom Company Case Study

Question 1: Key Problems of Vodafone

Under the leadership of first and second CEOs, Gerald Whent and Christopher Gent, Vodafone became the largest international provider of mobile telecommunications. However, the company did not generate profit commensurate with its international expansion; in addition, the expansion was more sprawling rather than organized. Hence, the third CEO Arun Sarin tried to unify the company through his “One Vodafone” strategy. Whereas the company was able to transform more standardized structure and to provide integrated services, Vodafone still needed to increase its profitability. Therefore, the biggest issue for Vodafone, at the time of the current CEO Vittorio Colao, has been how to utilize its position as the largest wireless communication service provider in the world to make the Vodafone be more profitable and to have sustainable competitive advantages.

Necessity to of the International Spread

Providing wireless communication services among many different countries is not easy; that been said, it could be strong competitive advantages for Vodafone. For example, the company could have more voices and influences to other competitors in the industry or increase more revenues from emerging Markets. In addition, unified and seamless services are demanding under globalization, which people are often moving from one country to another.

Obstacles

There are several obstacles that prevent Vodafone from gaining a competitive advantage from its broad international scope.

Value-Adding Application

To become a leader in providing mobile broadband connectivity, Vodafone was heavily investing to mobile broadband connectivity. However, the value-adding application has shifted from wireless communication providers to mobile phone platform developers, such as Google and Apple. Now, consumers hardly see differences among wireless service carriers, and choose carriers based on whether the carrier has their preferred phones. Since Vodafone has a large size with deep international scope, the company could take an initiative to weaken the influence of the phone manufactures and operation system developers.

Fast Moving Technologies

Wireless communication bands are controlled by government and they are extremely expensive. However, communication technologies are moving fast and replacement in a short cycle could have negative financial impact to the company. The company paid 30 billion euros to 3G licenses which forced Vodafone reported net loss of 45 billion euros due to impairment for over three years. Today, the world is moving to 4G LTE; it will force the company