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Vodafone Group Plc is one of the world's leading mobile telecommunications company. It has significantly running its business throughout in Europe, the Middle East, Africa, Asia Pacific and the United States. Company has subsidiary undertakings, joint ventures, associated undertaking and investment. At 31 December 2008, based on the registered customers of mobile telecommunications ventures in which it had ownership interests at that date, the Group had 289 million customers, excluding paging customers over the world, calculated on a proportionate basis in accordance with the Company's percentage interest in these ventures. The Company's ordinary shares are listed on the London Stock Exchange and the Company's American Depositary Shares ('ADSs') are listed on the New York Stock Exchange. The Company had a total market capitalization of approximately £74 billion at 31 December 2008. With this success in business vodaphone intend to expend their business to the developing country like Bangladesh. Vodaphone fiends a business opportunity for international venture in Bangladesh which involves of 20 million pounds of start up cost. Researching on the market opportunity Vodaphone found Bangladesh a massive growing market which involves about 45.7 million customers. The growth rates of the market are about 33% every year which is very encouraging for Vodaphone. Vodaphone got competitive advantage for its cheaper and skill labor which in fact would be an advantage for Vodaphone to provide their services with competitive market rate. Considering the environmental analysis, political, economical, social and technological factor are completely favorable for Vodaphone to pursue its business. But Vodaphone will still face some presser from environmental or natural factor which would be considered as a risk. In terms of competitor in the market there are some company might be threats for Vodaphone such as 3G, and T-Mobile because of their strategy and good reputation in the market. Vodaphone has got effective market strategy that will help her to compete her competitors efficiently.
With the changes of the global business environment, changes in operation and changes in workplace is more suddenly and frequently ever before. Mergers, acquisitions, new technology, restructuring and downsizing are all factors that contribute to a growing climate of uncertainty. Jobs, health, even marriages can be placed at risk, jeopardizing productivity and profitability. Considering the present situation, it can be seen that Globalization is the key elements of transforming business industries and forcing organizations to rethink the business models as well as corporate strategies that has help them to sustain for decades. Organization often involve with different development or improvement to cope with new business environment. In this regard, organizations share several key characteristics. Because of constant development and improvement process, organization often face different complex situation. People have deep attachments to their organizational, work group, and way of working. The ability to adapt to changing work conditions is key for individual and organizational survival. Change will be ever present and learning to manage and lead change includes not only understanding human factors but also skill to manage and lead change effectively. In the particular paper the researcher, constitute several of factor that are involve in changing management. The researcher has chosen Vodaphone to conduct his research. There are several of factor that has been taken in to consideration such as technological changes, marketing changes, operational changes. The researcher also discuss about the objectives that influence Vodaphone towards its changes. In the case of strategy it reflects the on the objectives or selected process and action that need to be taken in this regard. Structure is about authority and relationship between the executives and the individual contributors. Globalization and rise of Social Media is challenging the existing 'structure'. As far as the system is concern, these are Business Processes (how work is done) within the organization. Identifying core business processes is more relevant today as organizations can focus on it while outsourcing contextual business processes. (Lynch, 2005).
3. COMPANY OVERVIEW
Vodaphone has started its business on 1st January 1984. It has created a great mark in the mobile industries and transformed global communication. Vodaphone today is the worlds leading international mobile telecommunication group. It has been operating 27 countries across 5 continents with a customer of 186.8 million and 33 partner networks.
Vodafone offers different types of mobile communication services as well as some products. Main services include voice, messaging, data and fixed broadband services through multiple solutions and supporting technologies to deliver on its total communications strategy. The advancements in 3G networks and download speeds, handset capabilities and the mobilization of internet services, have contributed to an acceleration of data services usage growth. According to the recent 2008 data 75% of its services are voice, 12% are massaging, 7% data and 6% fixed line services.
Table 1 : Vodaphone Product and Services
3.1 Financial Information:
Management has assessed the effectiveness of the internal control over financial reporting at 31 March 2008, issued by the Committee of Sponsoring Organizations of the Tread way Commission ("COSO"). Management is somehow unable to assess the effectiveness of internal financial control at Vodacom due to the fact that it does not have the ability to dictate or modify its controls and does not have the ability, in practice, to assess those controls (Vodaphone Annual Report 2008).
4. Important Changes of Vodaphone for last 5 Years:
In this period of their successful business its 3G live customer reaches up to 10 million as well as it has launched 3G live system in Europe and 12 other countries trough 3G/GPRS system. In this particular period Vofdaphone review the roaming price plan which allows customer new easy to use voice and text system. In 2003 Orange, T-Mobile, Telephonica Mobiles and Vodaphone has join a club and introduces the interoperable mobile payments system. In 2002 Vodaphone group foundation has launched and took a subsidies plan to contribute 20 million to the community programme which is guided by the groups social investment policies. Between 2000 and 2001 the group has gone for the acquisition of Mannesmann AG almost doubles the size of the Vodafone Group making it the largest mobile telecommunications company and one of the top ten companies, by market capitalization, in the world. This is the period Vizzavi is launched, a 50/50 joint venture between Vodafone Air Touch and Vivendi Net to deliver a multi-access branded Internet portal for Europe. Vodafone acquires the largest available 3G license in the UK. In parallel with the development of 3G, Vodafone announces its intention to offer GPRS (General Packet Radio Service) to UK corporate customers. The Globalstar satellite communications service is launched in the UK.
Management has assessed the effectiveness of the internal control over financial reporting at 31 March 2008, issued by the Committee of Sponsoring Organizations of the Tread way Commission ("COSO"). Management is somehow unable to assess the effectiveness of internal financial control at Vodacom due to the fact that it does not have the ability to dictate or modify its controls and does not have the ability, in practice, to assess those controls (Vodaphone Annual Report 2008). Management is not required to evaluate the internal controls of entities accounted for under the equity method. Accordingly, the internal controls of these entities, which contributed a net profit of £2,876 million (2007: £2,728 million) to the profit (2007: loss) for the financial year, have not been assessed, except relating to controls over the recording of amounts relating to the investments that are recorded in the Group's Consolidated Financial Statements (Vodaphone Annual report 2008).
4.1 The core Factor that drive Vodaphone changes ( Vodaphone Annual Report 2008):
Vodafone's expectations the change, with this changes they are as to launch and roll out dates for products, services or technologies offered by Vodafone;
Vodaphone are expectations regarding the operating environment and market conditions. In this regard they will take imitative to operate with the changing environment in World mobile communication market.
Vodaphone has the intentions regarding the development of products, services and initiatives introduced by Vodafone. Vodafone is also in conjunction with third parties any where in the world.
Vodaphone are very concern about the operation strategy that will increase the market growth and reasonable rate of return.
Vodaphone quickly cope with the development and impact of new mobile technology including the development of 4G technologies and the launch of faster data speeds.
Anticipated benefits to the Group from cost efficiency programmers' including outsourcing of IT functions and network sharing agreements.
Growth in customers and usage.
5. Objectives towards the change:
The main objectives of my research are to answer the question in terms of my chosen organization. The goals or objectives of my research are as follows:
Relate the changing management and operation program directly to the needs determined by the assessment process outline by the chosen organization.
To find out and state in what capacity the behavior or performance of employees will be changed as a result of changes which in fact should relate to the mission and strategic plan set up by the chosen organization (Marchington M & Wilkinson A 2008).
To demonstrate the process of training and development which include milestone to help take the employee from where he or she is today to where the firm wants them to see in the future (Nilson C 2002).
Mobile phone is no longer a luxury product as a result here is a competition in the mobile phone market ( Donald A B, Wendell H Jr, Paul L, Geringer J M and Minor M; 2004). There are about 50 million people have a mobile phone in the UK. Appropriate objectives set up for the changing environment is very important for every organization because it work as the measurer of competitive advantage for the company. Generally one the company has decided upon its positioning strategy, it is ready to begin its planning the details of the marketing mix (Ray K 2004). The marketing mix is one of the major concepts in modern marketing with the changing business environment.
5.1 Factor that determine the changes:
5.1.1 Competitive Advantage:
Vodaphone enjoys a clear competitive advantage because of its technological development and marketing strategy. On the other hand Vodaphone has got the best mobile communication technology in World. As far as telecommunication is concern Vodaphone could establish the best infaracture in UK. (Donald A B, Wendell H Jr, Paul L, Geringer J M and Minor M; 2004). In terms of potential market, UK has got a huge market with millions of potential customer. In the latest research shows that by the end of June 2008, the number of UK mobile subscribers had risen to 43.664mn, up 53.3% on the previous year of 2007. Furthermore, according to the mobile telecommunication regulator, EU had 45.4mn mobile customers at the end of August 2008 (Wireless Asia 2006) This reflects the growth of 29% for the first eight months of 2008.It is been predicted that UK will gain nearly 13.2mn new mobile customers in 2008, and that penetration will rise to 34% by the end of the year. It is also to predict that by 2012 the subscriber will increase up to 147 million which is almost 99% growth (Wireless Asia 2006).
5.1.2 Five other Factors:
The porters five forces tools are a powerful tools to evaluate the situation of business organization. It refers to the company's current competitive position and the competitive position that the company move in to. It also refers to the strength of the company , reduce the weakness and avoid taking wrong steps. Conventionally, the porters 5 force tool is used to find out the opportunity towards new products, services or businesses have the potential to be profitable (Doyle, P. 2002). However it can be very illuminating when used to understand the balance of power in other situations too.
5.1.3 Supplier Power:
In this sector the company assess how easy for the suppliers to drive up prices. The companies supply chain is driven by the number of suppliers which has each key input, the uniqueness of their product or service.(Bruhn M 2002). The supplier strength and control over the companies, the cost of switching from one factor to another, and so on. The fewer the supplier choices the company have, and the more the company need suppliers' help, the more powerful companies suppliers are.
5.1.4 Buyer Power:
It refers to the situation where buyers drive the price down. Again, the number of buyers drives this. It also refers to the importance of each individual buyer to business organization and also the cost to them of switching from one companies products and services to another companies product and services, and so on. If company deal with few, powerful buyers, they are often able to dictate terms to the company (Jenks W, Morton K 2004).
5.1.5 Competitive Rivalry:
What is important here is the number and capability of your competitors - if you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation. If suppliers and buyers don't get a good deal from you, they'll go elsewhere.( Bruhn M 2002). On the other hand, if no-one else can do what you do, then you can often have tremendous strength.
5.1.6 Threat of Substitution:
This is affected by the ability of your customers to find a different way of doing what you do - for example, if you supply a unique software product that automates an important (Hawkins I, Roger D & Best J 1998). process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power.
5.1.7 Threat of New Entry:
Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.
6. Factor Influence the Implementation of Changes:
6.1 Operational Factor:
In this particular paper the researcher will only demonstrate the opportunity and threats for Vodaphone, because these are the two factors are macroenviornmental factor for mobile telecommunication market. Emerging markets offer Vodaphone to introduce their unique services to that market where the market has high rate of growth. They can become a market leader, as they are the biggest network provider in the world. By considering the political factor, getting license for Vodaphone is not a big deal, for the social factor mobile phone are used by all level of people. Competition is a bigger threat for the Vodaphone in UK market. There are different product and services offered by different companies. For example we can mention that i-phone is introduced by O2 has put a significant impact on the market. The effect on the rules and regulation by the Government are work as threats for Vodaphone.
Strengths are those positive aspects or distinctive attributes or competencies which provide a significant market advantage or upon which the organization can build for example, through the pursuit of diversification (Craig S, Fisher and Babette E ,2007). In terms of Vodaphone following are strengths; Massive Business in all over the world which includes the brand name and reputation. One of the best mobile telecommunication technologies which is one of the vital competitive advantage for Vodaphone, Experienced and well trained management, Huge turnover and Cheap and skill labor.
6.2 External factor:
The environmental analysis is one of the key factors for companies marketing decision making process. Vodaphone in this case has gone through a research about environmental factor that could increase or decrease the opportunity to enhance marketing decision making process for past one decade. PESTEL analysis in fact the abbreviation of the elements which is combinely known as environment (Jenks W, Morton K 2004). The word PESTEL stands for Political, Economic, Social, Technical, Environment and Legislative. It is a strategic planning technique that provides a useful framework for analyzing the environmental pressures on a organization in every aspect .PESTEL analysis is also know as a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations (Kotler, 2002). It is now important for Vodaphone to analyse all those environmental factor that has been influencing for last one year and might influence in the future in terms of marketing decision making.
Mobile phones licence is tightly controlled and are very expensive. Some time measures are implemented by the government in order to decrease mobile phone use for the children because of health and safety issue. Sometime build up an infrastructure to support the network required permission from the Government. In the recent past UK Government are reduce the tax for handset which will encourage Vodaphone to invest more over here. It also create 50000 job opportunity .It is a clear intention for the Government to encourage foreign mobile company to invest in UK Market which indeed a positive opportunity for Vodaphone to go for the business. Reforming plan for telecommunication regulation will bring the foreign investor forward and set up business in UK( Nickels W, McHugh J, McHugh S 2001).
Economic factor are the most important for any organization towards its growth. These are including interest rates, taxation changes, economic growth, inflation and exchange rates. Same as the political decision, Government of UK has come up with the idea of lowering the tax for telecommunication services. But on the other hand recession has put impact on the over all expending of the customer (Boxall P 2007). In this regard there is competition of decreasing price to attract more customer. In the case of 3G technology, the new lenience for the technology were required , so there is a competition in accruing the new technology by expending more money in it. There are another economic factor that influence in decision making process which is the cost of labor.
Changes in social trends can impact on the demand for a firm's services and the availability and willingness of individuals to work. As far as social trends are concern UK people has got 100% positive attitude towards the mobile communication. It is become a part of fashion to have a mobile phone in you hand. As the European market is very big , different kind of mobile phone sold here and some of the technology are in monopoly position as they concurred most of the market. Regardless of socio-economic condition every one are keen to have a mobile phone in the UK. The numbers of mobile user are growing rapidly with change of social trends. People are getting educated which enhance the demand to sky high, is tremendous opportunity for Vodaphone t in UK market. On the other hand there is a demographic influence in the mobile phone market as the mobile phone trend to be used by the younger people most. In some country where population are ageing, which is the trend across the EU , the demographics may shift to a more aged population have less use for mobile phone.
New technologies create new services and new processes. As far as mobile telecommunication is concern technology is vital factor that could be a obstacle for investment in this particular field.. The customer enjoys a clear competitive advantage in its IT as well as telecommunication labor force. The leading universities in the country provide world class IT courses. Each year, various institutions produce about 2,000 IT graduates which in fact a productive labor force for telecommunication industries. Vodaphone would not be facing any massive technological difficulties apart from the ongoing problem with electricity. But this could be turning down point that Vodaphone has to take in to account. There another factor in the technological aspect is the introduction of the 3G technology helped Vodaphone to interact easier through their phone and they were able to offer services like the mobile internet otr famous social networking site like face book directly accessable from the phone. Technological development help Vodaphone to cope with the growing market and attract more customer.
Because of the environmental issues , Vodaphone established a recycling programme for phone in order to keep the environment safe. They offered money to cuatomer to hand over any unused phone and expend lot of money advertising it (Craig S, Fisher and Babette E ,2007).
Complaining for the mobile telecommunication services is play a vital role, in fact it can be considered the important of all. There are different legal factor that could change the firm behavior. In terms of legal requirements of Bangladesh, there is some regulation need to follow by Vodaphone. In this regard consumer law is important.
6.3 Impact on Marketing Decision Making:
Because of the changing business environment and improvement in economic crises Vodaphoen might have to change their marketing strategy and decision making process to more effective towards the customer level.
Environmental issue is another factor that might impact one their decision making process . In the future more environmental friendly mobile phone might introduce by the company.
As the rapid improvement of technology put impact on Vodaphoens future decision making process.
6.4 Human Resource Factor:
6.3.1 Employee needs and motivation:
Employee needs and motivation for the training must also be part of the selection criteria. The human resource staff tries to determine the extent to which the training relates to real job and career needs experienced by the candidate and the extent to which the employee is motivated to work hard in training session. Although needs and motivation can be difficult to determine accurately, previous performance evaluations, as well as interviews with individual employees and their supervisors, can sometimes be quite helpful (Marchington M,2005, p. 322) The nature of the employee interview and many of the specific questions asked are similar to the procedures and questions in interviews for hiring purposes. These training interviews are particularly important when the training can significantly upgrade the employee's skill level and job prospects.
There are many organization have recently moved in the direction of training employees to have multiple skills, called multiskilling. In particular, multiskilling is relevant where semiautonomous or self-managed teams are utilized. In this process everyone are encouraged to learn all the jobs of the team, and employees are usually paid according to the number of skills that they have developed (Redman T & Wilkinson A, 2005, p. 331).
6.3.3 Skills Obsolescence:
Rapidly escalating technological change is required that all segments of companies give higher priority to employees retraining. This also means individual workers themselves must seek out training opportunities to avoid having their skills become obsolete.
7. Success of Vodaphone in terms of Managing Changes:
Vodafone UK operates over 300 of its own stores. It also sells through independent retailers e.g. Carphone Warehouse. Customers are able to see and handle products they are considering buying. People are on hand to ensure customers' needs are matched with the right product and to explain the different options available. A product with many different features provides customers with opportunities to chat, play games, send and receive pictures, change ring tones, receive information about travel and sporting events, obtain billing information - and soon view video clips and send video messages. Vodafone live! Provides on-the-move information services. Vodafone wants to make its services accessible to as many people as possible: from the young, through apprentice and high powered business executives, to the more mature users. It offers various pricing structures to suit different customer groups. Monthly price plans are available as well as prepay options. Phone users can top up their phone on line. Vodafone UK gives NECTAR rewards points for every £1 spent on calls, text messages, picture messages and ring tones. Vodafone works with icons such as David Beckham to communicate its brand values. Advertising on TV, on billboards, in magazines and in other media outlets reaches large audiences and spreads the brand image and the message very effectively. This is known as above the line promotion. Stores have special offers, promotions and point of sale posters to attract those inside the stores to buy. Vodafone's stores, its products and its staff all project the brand image. Vodafone actively develops good public relations by sending press release to national newspapers and magazines to explain new products and ideas.
Vodaphone, a largest mobile communication companies in the World has great deal of interest and opportunity to invest and build up its changing business enviornment as a new venture. Considering all elements and analysis all possible factors I, this business plan is a positive report for Vodaphone to extend their business in one of the largest and growing market in all around in the Globe.
9. Reference Cited:
Lynch, R. (2005) "Corporate Strategy" (4th edition), Prentice Hall, UK
Craig S, Fisher and Babette E (,2007); Business and Competitive analysis; Published by Financial Times.
Kotlar P(2002); Marketing Management; Muze Inc
Jenks W, Morton K (2004); Strategic Management and Business Analysis; Jordan Hill
Donald A B, Wendell H Jr, Paul L, Geringer J M and Minor M; (2004); International Business: The challenge of Global Competition; Published by McGraw Hill
Nickels W, McHugh J, McHugh S ( 2001); Understanding Business ; 5th Edition ; Published by McGraw Hill.
Ray K(2004) ; Globalization and Colonilazation: Vedems Book Ltd
Jenks W, Morton K (2004); Strategic Management and Business Analysis; Jordan Hill
Boxall P (2007); Strategy and Human Resource Management; 2nd revision Edition; Palgrave and McMillan.
Nilson C (2002); Training and Development Yearbook; 2nd Edition; Prentice Hall; London, UK
Marchington M & Wilkinson A (2008); Human Resource Management at Work: People Management and Development; 4th Edition; Chartered Institute of Personal and Development; London, UK
Redman T & Wilkinson A (2005); Contemporary Human Resource Management: Text and Cases; 4th Edition; Prentice Hall; London, UK
Marchington M (2005); Human Resource Management at Work; 3rd Edition; Chartered Institute of Personal and Development; London, UK