THE STRATEGIC MANAGEMENT PRACTICES OF VODAFONE AND ITS SIGNIFICANT IMPACT TO THEIR BUSINESS PROGRESS

THE STRATEGIC MANAGEMENT PRACTICES OF VODAFONE AND ITS SIGNIFICANT IMPACT TO THEIR BUSINESS PROGRESS

 

 

Vodafone Group Plc, the self-proclaimed world’s leading mobile telecommunications company, is a public limited company incorporated in England with a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States (2007). Expansion has always been one of the strategies of the firm, enabling it to have 93 million subscribers in 29 countries (2003). Although not necessarily number one, it ranks among the top ten global companies in market capitalization. Its main products and services include network business, distribution business, retail shops, data-services business, short message service (SMS), multi-media portal, third-generation licences, cellular operations and satellite services (2003). Aside from expansion, another known strategy of Vodafone is acquisition. Some of its key acquisitions include AirTouch in the USA, Mannesmann in Germany and Omnitel Pronto Italia. Being innovative and agile is also one of Vodafone’s main strategies. It was the first mover in bringing new technologies and buying 3G licenses in the UK (2003). Vodafone was always on the watch for the latest trends in the mobile telecom industry and have made successful accurate forecasts to which the company has taken advantage of greatly. The internet was one of the tools for its success and continues to use it for further growth (2003). However, although the company continues to be successful, it faces greater challenges ahead with increasing competitions in North America and Japan.

RESEARCH PROBLEM

            This study will investigate the significant impact of strategic management of Vodafone to the operations and growth of the company. Vodafone has been known for tactics such as expansion, merger and acquisition, innovation and being agile but the changing conditions of the industry might have changed them or added some strategies to their list. The current study will investigate their current strategic management practices and determine how it affects their growth. But first we must define strategic management. What is it anyway? Strategic management is basically the “art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives” ( 2003). It is the formal process, or set of processes, used to determine the strategies (actions) for the organization (2004). It focuses on many areas, including the integration of: management; marketing; finance/accounting; production/operations; research and development; and computer information systems (2003). Its main objective is to help the organization achieve success through the formulation of different strategies, their implementation, and evaluation ( 2003). It is also synonymous with the term “Strategic Planning” (2003).  (2003) stated that there are a total of 11 types of strategies that a firm can use to gain advantage over competitors. These are: forward integration (gaining ownership or increased control over distributors or retailers); backward integration (seeking ownership or increased control of a firm’s supplier); horizontal integration (seeking ownership or increased control over competitors); market penetration (seeking increased market share through greater marketing efforts); market development (introducing present product’s or services in new geographic areas); product development (improving present products or services or developing new ones); concentric diversification (adding new but related products or services); horizontal diversification (adding new but related products or services for present customers); retrenchment (regrouping through cost and asset reduction to reverse declining sales and profit); divestiture (selling a division or part of the organization); and liquidation (selling all of the company’s assets, in parts, for their tangible worth).

The following questions will be answered:

Ø Which strategies among the list David provided that Vodafone currently use?

Ø How do the strategies impact the internal and external operations of the company?

METHODS

            The study will take the strategy of Case Study to explore the strategic management of Vodafone. Permission for research will be requested on one of Vodafone’s branches. Interview routines will be conducted with managers and employees. Observations on internal operations will be conducted as well. The data will be analyzed qualitatively or inductively, with interpretations on how the strategies of Vodafone affect their business growth. The study will take place for six months and funding will be needed to ensure that Vodafone will agree with the research to take place.

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