Business Environment Analysis

Executive Summary

This paper performs a SWOT analysis of Vodafone which identify the issues that require change. Additionally, it gives a critical and theoretical approach to a change plan for and in the organization structure.

Introduction

Vodafone Group plc refers to a multinational telecommunications organization. The company headquarter is located in London, England. However, the company operates on many continents including Africa, Asia, Oceania, and Europe. As per a recent report, based on market capitalization numbers, it is ranked 3rd after Vodafone Idea and Bharti Airtel. As of 2019, the company had 625 million customers worldwide. The company has operations in 25 countries and also has a partnership with other telecommunication in 47 countries. Moreover, the company regardless of being a telecommunication service also provides information technology to corporate clients in 150 states (Kerr & Moloney, 2019). The company’s main customers include the manufacturing sector, the automotive, banking sector as well as financial services and healthcare (Ang, 2016). This paper performs a SWOT analysis of Vodafone while identifying the issues that require change such as management, staff and leadership issues. The essay also aims to reveal Vodafone declining revenue and subscribers. Lastly, the paper will give a critical and theoretical approach to a change plan for and in the organization structure-change process.

SWOT Analysis

SWOT refers to a framework which involves; strengths, weaknesses, opportunities, and threats. It is utilized to evaluate an organization’s competitive position and as well as develop strategic planning.

Strength

First, Vodafone Group plc has huge market coverage. Globally, the company is ranked 395th among the global best 2000 brands as per Forbes. Moreover, it has widely invested in-network coverage which gives it more advantages compared to its competitors. As stated, the company has an operation in more than 25 countries globally. Besides, it has a high revenue generation. Yearly, the company generates billions of dollars of revenue. As per its report in 2016, the company generated a revenue of more than 87.3 billion dollars (Wei, 2019). This naturally boosts its rankings and ability to generate capital to beat its competitors when it comes to matters of investing in advertisement and market segmentation. Globally, it is ranked 104 in its sales statistics. Looking at company marketing, the company is a legendary (Russell et al., 2018). Vodafone has an excellent marketing campaign which makes its product users diehard fans of Vodafone. Its marketing strategy also enables Vodafone to launch its marketing strategies at the right time which is a competitive advantage in the market. From its strategic marketing strategy, the company has a huge subscriber base. It has also a successful track record of integrating complimentary organizations via acquisition and mergers. The company is known to have a strong organizational culture that enables its staff and management to offer a high customer satisfaction level. This has enabled the company to achieve a high level of customer satisfaction and royalty among present customers as well as excellent brand equity among the potential clients which gives the company an added advantage in its markets and new markets.

Weakness

Of late, the company is dropping the subscriber base. For the last four years, the company subscribers are unstable and, in some years, dropping. This is a key concern for Vodafone looking at the global market scenario. Therefore, the company has to change its marketing strategy to enhance its values and strategically acquire more loyal clients. With other companies such as Verizon Communications and Comcast Corporation, since its launch in 2015 in the USA, it is facing strong competition (Kumar, 2019). Therefore generally, with local competition, the company is fast losing market share in the United States to competitor companies. This means that company management should change and come up with more competent leaders. Due to economic, political and other challenges, the company is making poor performance in Europe due to issues such as Brexit. The company has failed to integrate various organizational culture from its mergers. Due to this failure, the company organizational culture needs to change too to integrate most of its mergers’ culture as possible (Kumar, 2019). Vodafone’s structure and technology need to change. Studies indicate that the current company structure is only compatible with its current business model. This means that this company's ability to expand is limited (Gujarathi & Comerford, 2017).

Opportunities

The rural market is an opportunity for the company. This means that penetration to the rural market is very easy and should be the priority for the telecom operator. However, the company is only revealed to operate in urban markets which are in contrast to its competitor’s priority. Therefore, its priority on subscribers require to change, otherwise, it risks the loss of future rural market subscriber loss. Additionally, emerging markets are an opportunity for the company. Emerging markets like those in Africa are a potential for Vodafone (Gujarathi & Comerford, 2017). Vodafone should, therefore, concentrate on emerging markets globally. The 4G and emerging 5G is an opportunity for the company. Though these networks have created some disruptions, though many people look at the telecom company which provides the best services. Nonetheless, the 5G spectrum can result in higher revenues though the organization is faced with key challenges of its network coverage. This is possible because of a large number of subscribers. Lastly, another opportunity is new consumer behaviour (Howell & Potgieter, 2019).

Threat

Currently, the company is facing stiff competition. Whenever the company expands its network, it faced a new threat from the local market. As stated earlier, in the US, the company is facing competition from Verizon Wireless as well as AT&T. In China, it is facing a challenge from China mobile. This cut-throat competition in this industry is strongly affecting the company's brand and the company should change its marketing strategy and keep its pricing strategy as for low as possible (Howell & Potgieter, 2019). Furthermore, the company is facing a mobile number portability. Competitor introducing a cheap plan such as free internet can force consumers switching to these brands. New environment policies under the Paris agreement (2016) is a threat to certain existing brands (Rogelj et al., 2016).

Vodafone Group Plc. Declining Revenue and Subscribers

The company has been experiencing subscribers and revenue decline over the past four years. As of December 2018, the company recorded a 6.8% decline in revenue which is attributed to various factors including, the sale of its Qatari subsidiary, adoption of the IFRS15 reporting standard, foreign exchange headwinds (Wei, 2019). Other challenges include BREXIT, currency inflation in the UK and other factors. The company in the three months under review generated EUR10.996 billion down from EUR11.797 billion which was generated in the corresponding period of 2017 (Rodrigues, 2019. Moreover, in 2018, the company’s revenues from the European market were EUR8.145 billion, down from EUR8.631 billion in 2017 (Rodrigues, 2019). In the last quarter of 2018 Vodafone Group 275.216 million mobile subscribers. This was a decline from 276.863 million in 2017. This is attributed to low services offered by the company.

Lewin’s Change Management Model and Application of Process Change Strategy

Vodafone is a huge organization and with the increasing competition in the market, any change process which is unplanned my harm its subscribers and market share. Therefore, to implement smooth change, Lewin’s Change Management Model is required. This change occur via changing states of a block of ice (Shirey, 2013). The theory has three main stages which includes; unfreeze, change and refreeze. Phase incudes the preparation for the change, Change involves change taking place in the organization though, good leadership and reassurance are important. The last process is refreeze after change is implemented, this phase the staff and processes begin to refreeze, and things start going back to their normal.

Vodafone Group plc. is a company that has been failing in its network over a long time. Moreover, the company is still venturing in new markets especially in china rural, Africa, etc. The change management activities to improve the company's operating mechanisms in the long term and short-term objectives. It involves improving corporate processes and operating human resources policies (Hayes, 2018). Due to the challenges in the organization, this process is very critical to the leadership since it ensures effectiveness in operating activities and reduces losses which result from technology, fraud, malfunction, etc. This means that the department leadership should change existing processes to improve productivity and comply with regulatory guidelines (Hayes, 2018). Besides, change management includes tools that an organization can use to monitor, initiate and implement modifications. Furthermore, top executives make sure that change management procedures align with government regulations and corporate policies.

This change is aimed at implementing both reactive change which is aimed at addressing prior Vodafone failure and technological failures and planned change which are aimed at addressing future objectives of the organization.

Conclusion

Some of the strengths of Vodafone include; huge market coverage, high revenues generation, high global ranking, the company is legendary and the creation of brilliant and endearing campaign among others. However, the company has a weakness which includes declining subscribers, strong competition, political and other challenges, merging companies having different work cultures and less sophisticated technology. Regardless of this weakness, the company also has opportunities to improve. Some of the opportunities include; availability of rural market, emerging markets especially in Africa, the 4G and the emerging 5G, the possibility of network improvement and new consumer behaviour. Lastly, some of the company threat includes; stiff competition, mobile number portability, and new environmental policies which is a threat to certain existing product categories and increased geographical operation. To alleviate this problem, Lewin’s Change Management Model and the change management process is required due to its proven track of success.

Recommendations

Vodafone should

• Update its network- Vodafone has been having challenge with its network. Its users have reported problems in sending and receiving calls. It has also been reported as one of its weakness. Therefore, upgrading its network an increase profitability and subscribers (Tenorio et al., 2010).
• Adopt the 5G network. 5G is a developing network with promising profitability (Smail & Weijia, 2017). As it has been suggested to an opportunity, adoption of this network can be very crucial to profitability of the company.
• Advance its technology- today we are living in a world where, technology is advancing. Therefore, continuous advancement of the company’s technology is an opportunity to increase the company profitability.
• Venture in rural and emerging markets. As suggested in the company mostly ventures in the urban markets. Therefore venturing in rural market will increase its market share and profitability.

References

• Ang, R., 2016. Vodafone Global Telecommunications: Optimizing Operations. IUP Journal of Operations Management, 15(4), p.46.
• Gujarathi, M.R. and Comerford, D.R., 2017. Acquisition of Hutchison Essar (India) by Vodafone (UK): A Case in International Taxation of Indirect Transfer of Shares. Issues in Accounting Education, 32(2), pp.83-93.
• Hayes, J., 2018. The theory and practice of change management. Palgrave.
• Howell, B.E. and Potgieter, P.H., 2019. Bagging bundle benefits in broadband and media mergers: Lessons from Sky/Vodafone for antitrust analysis. Telecommunications Policy, 43(2), pp.128-139.
• Kerr, W.R. and Moloney, E., 2019. Vodafone: Managing Advanced Technologies and Artificial Intelligence.
• Kumar, B.R., 2019. Vodafone Acquisition of Mannesmann. In Wealth Creation in the World’s Largest Mergers and Acquisitions (pp. 17-29). Springer, Cham.
• Rodrigues, M., 2019. Vodafone group Plc-telecommunications (Doctoral dissertation).
• Tenorio, S., Exadaktylos, K., McWilliams, B. and Le Pézennec, Y., 2010, April. Mobile broadband field network performance with HSPA+. In 2010 European Wireless Conference (EW) (pp. 269-273). IEEE.
• Rogelj, J., Den Elzen, M., Höhne, N., Fransen, T., Fekete, H., Winkler, H., Schaeffer, R., Sha, F., Riahi, K. and Meinshausen, M., 2016. Paris Agreement climate proposals need a boost to keep warming well below 2 C. Nature, 534(7609), pp.631-639.