Vodafone Group Plc
Introduction
It is vital for developing suitable strategy for expanding operations of the organization and adopts competitive position in the market. The study provides an in-depth analysis of development of appropriate strategy developed by Vodafone Group Plc. for establishing subsidiary in a new country like China. It helps in formulating proper evaluation of strategies for choosing China and provides systematic methods of entry within the country. There is utilization of various external frameworks for evaluating existing conditions within China for expanding operations and develop competitive advantage. The study is useful in depicting challenges faced while operating in new country and provides solutions for overcoming barriers in conducting operations. It is vital for representing judicious decisions and strategies for targeting China and develops a subsidiary for more growth for Vodafone Group Plc.
Overview of the company
Vodafone Group Plc is a multinational telecommunications organization and was incorporated on 16 September 1991 in the market. The company operates in more than 25 countries and headquarter is located in London, United Kingdom. Vodafone Group Plc provides telecommunication services to customers by managing joint venture with other networks in further 47 countries. The organization provides telecommunication, mobile, broadband internet television services for the customers in global market. The total number of employees working for the company is 98,997 and is ranked as fourth largest mobile networks in the whole world. Vodafone Group Plc has operating revenue of $44.666 billion and net income of $ 7.45 billion in the market. The company has a total market share of more than 34% in global market mobile industry.
Figure 1: Logo of Vodafone Group Plc
Discussion
Analysis for expansion of the company
Vodafone Group plc is a multinational company and looks forward for developing suitable expansion strategy for penetrating new market in China. It is vital for adopting suitable expansion strategy for entering into the new market and improves growth in the market (Kumar, 2019). The organization can adopt a expansion through diversification method by providing existing telecommunication services for the new population in China. There is extensive focus given on managing operations in China due to presence of the population. Most of the population in the country prefers to adapt to latest services in telecommunication services and helps in increasing current market share in global market.
Vodafone Group Plc focuses on developing unique strategy for adopting diversification strategy and establish subsidiary in China. There is presence of large amount of opportunities within the country for increasing profits and evolves existing position in the international market. In addition, there is an need for the organization to expand its services in the Asian market and develop a competitive edge in accordance with other competitors. The utilization of conglomerate diversification strategy helps in expanding operations for the company into new products and provides competitive edge (Ang, 2016).
Strategic Choice available for organization
It is essential for developing a suitable strategy for managing operations in the new environment for the organization. The utilization of systematic strategy provides a competitive advantage and maintains a highly advantage position in the market. In case of Vodafone Group Plc, there has been implementation of transnational strategy for expanding existing market in China and expand existing operations in the Asian market. The development of transnational strategy provides adequate opportunities for the company to promote products and services in a personalized approach to the targeted customers (Sekhar, 2016). It helps in using the brand name of the organization and provides telecommunication services to the people in China. The implementation of transnational strategy provides adequate opportunities for Vodafone Group to provide mobile and telecommunication services by promoting existing brand image.
The implementation of transnational strategy by the organization provide a satisfaction among the younger population of China and increase overall profit in new market. It creates an combination of winning procedures for developing suitable strategies for managing preferences of the people in China and improve benchmark in operations. There is an extensive range of development in the foreign country by assessing specific demands for using telecommunication services in the market (Howell and Potgieter, 2019). It provides an efficient platform for making the established firm more popular in China and improves position in global market. Vodafone Group Plc. implements transnational strategy for efficient management of resources and improve position in the telecommunications industry in global scenario.
Evaluation of Chosen location for subsidiary
Vodafone Group Plc has chosen China for expanding operations and improves position in telecommunication industry in the Asian market. It is essential for evaluating existing market for the country for improving business operations. There has been macro- environmental analysis of environmental conditions present within China for improving expanding operations.
PESTLE Analysis
The utilization of PESTLE framework provides a suitable analysis for depicting existing present conditions within China. It is an effective tool developed for used for identifying external forces that provide direct effect on the operations of the firm (Munjal, 2019). The implementation of external framework is useful for evaluating potential in operations for the new market and increase managing activities. It helps in providing depiction of systematic analysis for identifying conditions present within China and makes it easier for Vodafone for managing operations in the market.
Political Factors
There is presence of strong interference among the government within China that provides direct effect on the operations of the company. It provides direct affect on the internal operations and reduces systematic operations. However, high stability in political conditions and presence of improved infrastructure develops an attractive site for the organizations. This adds to development of suitable political presence within the country and attracts lot of firms for operating in the country.
Economic Factors
China is regarded as the second largest economy in the whole world and GDP rate will become one of the highest in the future. There is increase in purchasing power of consumers and development of numerous economic reforms provides additional advantage for China. The development of trade politics is also an vital factor that provides direct effect on the operations within the economy in country (Yip and McKern, 2016). Most of the large branded organizations are unable to enter the Chinese market due to presence of an increase in trade politics reforms.
Social Factors
Cultural values provide a direct effect on the operations of company in the Chinese market. There is presence of large market within the country for managing consumer products and increase in spending patterns within the people. The development of urbanization has provided direct effect on social patterns and behavior of the population within country (Lasserre, 2017). It helps in developing wide range of cultural and social values within people of China. China has a high literacy rate and huge part of the population prefers to adopt internet for buying of products.
Technological Factors
China has presence of wide range of advanced technology for providing advanced products to the customers. Most of the people prefer to use latest technological innovations like internet for buying products and create a innovation in the market. The rapid growth in technological pattern creates extensive opportunities for the country to be one of global power in the market (Lott and Sinha, 2019). There is emphasis provided on developing China into an innovation based one from labor based intensive country.
Legal Factors
There is presence of large amount of legal regulations operating in China for managing operations of the organization (Rahman, 2017). Most of the legal regulations are based on formation of e- commerce sections and other legal entities like tax policies, consumer rights and intellectual property rights. The development of large amount of legal regulations creates direct effect on operations and enhances legal position for the country.
Environmental Factors
The rapid development of economic activities has provided direct effect on the environment within China. The increase in air and water pollution, deforestation, climatic change, loss in biodiversity is some of the illustrations of challenges faced by the country in maintaining environment. The government has focused on implementing initiatives for improving environmental condition within the country. [Refer to Appendix 1]
POTER’S Diamond Model
It is a useful framework developed for evaluating competitive advantage present within China for managing operations and analyzes telecommunication industry. The utilization of model provides an depiction of appropriate conditions developed for managing operations by the organization in the market (Song et al. 2017). There is a systematic relation developed between implementation of appropriate strategies and the institutional frameworks.
Factor conditions
There is presence of large amount of skilled labor forces, infrastructure and capital resources available in the telecommunication industry. The abundance availability of factor conditions provides an additional advantage for managing operations within industry. It helps in attracting large amount of organization for investing more resources for operating in the telecommunications industry for the country (Fang et al. 2018). There is an increase in overall efficiency of operations for managing operations related to the industry. It provides extra opportunities for Vodafone Group Plc to invest huge amount of resources and expand in the Chinese market.
Demand Conditions
In China, there is presence of large market that attracts large amount of customers to invest resources in the foreign market. It helps in increasing demand among the local people for innovating, improving and growing telecommunication industry in the country. The presence of higher demand in the market creates ample opportunities for the firm to enter into the new market and create sustainable competitive advantage (Holtbrügge and Friedmann, 2016).
Firm structure, strategy and rivalry
The telecommunications industry is highly competitive in china and provides direct impact on the market share between various firms in the market. It can be emphasized that there is adoption of liberal structure within the industry for maintaining adequate advantage within the operations in China (Hong et al. 2017). Most of the forms are keen for innovating existing operations and develop appropriate strategy for reducing domestic rivalry among the competitive rivalry in the market.
Related and supporting Industries
The development of innovation in manufacturing of cellular industry provides additional advantage for supporting operations related to telecommunications in China. It helps in providing appropriate innovation in the formulation of advanced equipments for creating additional value for the local customers (Jaligot et al. 2016). The development of adequate support from the related and supporting industries provides an additional advantage for improving existing operations in the country. [Refer to Appendix 2]
Implementation of Porter’s Value Chain Analysis Framework
The value chain analysis is a suitable framework developed for evaluating specific activities developed by which organizations can gain extra value and competitive advantage. It provides a depiction of positive attributes related to the operations of the firm in the environment (Bhargava et al. 2018). The value chain analysis framework for Vodafone Group Plc is as follows:
Inbound logistics
The inbound logistics of Vodafone refers to the presence of total number of employees present within the organization for conducting operations. Most of the telecommunication services and other products are developed by innovating existing technology and providing appropriate services for the people.
Operations
Vodafone operates in more than 72 countries by joint venture or by directly entering in the new market. It helps in providing wide range of telecommunication and internet services for the people in the various markets.
Outbound Logistics
There is presence of little intermediates in providing direct services for the people. Most of the services are provided by the company to the customers by offering in various retail stores in several locations (Lakshana, 2019).
Marketing and Sales
Vodafone Group Plc. invests more in providing quality services for the customers by innovating existing technology used for managing communication. There is launch of specific products by targeting specific customers in the market.
Service
The company looks to provide superior and quality services by developing brand image and loyalty among the customers (Azab et al. 2016). It helps in managing customer satisfactions and provides unique experience for using the service of the firm by the people.
Firm Infrastructure
The development of an innovation in infrastructure for Vodafone group Plc provides additional advantage for conducting operations in the market. There is availability of various specialists in every department for managing operation in the environment for the firm.
Human Resources
There is presence of an committed and strong workforce for managing operations for Vodafone group Plc in the market. The employees are provided with various benefits and opportunities for managing operations and indicate strong human resource management. The development of systematic training techniques provides high motivation for workers to create suitable working culture within the organization.
Technology Development
The company is well- known for developing innovation in use of latest technology for providing un-interrupted telecommunication and other services for people. The development of superior technology provides an additional opportunity for managing interaction with the customers and improves existing position (Flux, 2019). There is increase in development of cellular components and other services for providing innovation services for the people.
Procurement
Vodafone Group Plc. maintains an flexible system for producing an suitable system for providing efficient services for the people. It helps in attracting more customers and provides a competitive advantage. [Refer to Appendix 3]
Strategic Method of Entry and Consequences
The development of a suitable mode of entry in the foreign market provides an additional advantage for conducting operations. It provides an systematic platform for conducting operation and reach to the targeted customers in the foreign market (Kraus and Strömsten, 2016). Vodafone Group Plc. needs to adopt suitable strategy for entering in the Chinese market and improve existing position in the telecommunications industry in the Asian region. The development of an joint- venture strategy provides adequate advantage for penetrating new market in China and gets an huge market. The organization can adopt joint venture strategy with the China Mobile company for penetrating into the new market.
Moreover, the utilization of joint venture strategy with local popular mobile company like China Mobile for attracting mass market. It helps in reducing extra risks associated with the firm for entering in a new market and provides adequate telecommunication services for the local customers. There is access to abundant skilled labor and other financial resources available for the company to manage overall operations (Kerr and Moloney, 2019). It is useful for increasing an brand awareness and reach to the targeted customers in an easy way. In addition, joint venture strategy provides an increase in total number of targeted people in the big market like China with the local telecommunication service provider like china telecom. It provides an additional advantage for increasing sustainability in the operations and shares risks and costs with the partner.
The utilization of joint venture strategy provides an established platform for Vodafone Group Plc to reduce risks in operations for carrying on operations in foreign environment. It allows large amount of people within China for getting familiar with the services and gain an increase in the telecommunication industry (Kumari, 2019). The enactment of joint venture strategy provides additional opportunities for the firm to operate in a flexible manner and gain better knowledge of firing market.
Evaluation of Potential organizational and Managerial problems for Operating in New Environment
It is essential for evaluating and identifying organizational and managerial problems for developing subsidiary in the internal environment of foreign country. There is a direct effect on the operations of the organization that developing strategy for targeting foreign market. In case of Vodafone Group Plc. there is depiction of various challenges while operating in the foreign environment like China.
Development of mis- understandings in adapting to local culture
It becomes an inevitable part for managing a suitable system for adapting to the local culture while operating in China. There is development of mis- communication among one another within management of Vodafone Group Plc for conducting operations. It creates a fluctuation in the management of the new firm for creating suitable strategy for adapting to the local culture and improves position (Bravo, 2019).
Fluctuation in changes and preferences of customers
In the recent trends, there has been an sizeable shift in preference of local customers in China for adapting to the services offered by the foreign company (Shrestha, 2017). The management of firm fails to develop suitable strategies for adapting to the preference of the customers and manage operations successfully in the environment. It provides direct effect on the operations and creates numerous problems in operations in China.
Maintenance of adequate human resources
There has been an considerable problem faced by the organization for providing trained and professional workers for managing supply within the Chinese market. It provides direct effect on the required staff available for managing operations for the company in the market (Reddy, 2016). The implementation of an appropriate staff is necessary for conducting operations and improves position in local market for the company.
Recommendations
There is presence of number of potential issues faced by the company in operating in the Chinese market. It is vital for developing suitable solutions for managing overall problems faced by Vodafone Group in operations. The development of recommendation is as follows:
Adapt to changes in preferences of customers
It is essential for evaluating and focusing on the changes in style preferences for the customers in Chinese market. There is strong preferences for depicting actual wants and needs of the people and provide adequate services.
Maintain an appropriate communication for adapting to local culture
The implementation of suitable communication with local people helps in managing problems in adapting to the local culture. It helps in creating good practices for improving use of local language and conduct operations for the firm in a systematical process.
Develops adequate training and interaction programmes
The formulation of suitable training and interaction program me provides adequate opportunities for the organization to maintain local workforce in China. It helps in managing long- term relations with the employees and match demand with the supply for conducting operations.
Conclusion
It can be stated from the above study that development of systematic strategies helps in expanding operations of the organization in foreign country. The study provides an in- depth analysis on evaluating appropriate strategies for developing operations of Vodafone Group Plc in China. It provides an implementation of various frameworks for evaluating external conditions in market of China and maintains competitive advantage.
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Appendix 1: PESTLE Analysis
Appendix 2: Porter’s Diamond Model
(Source: https://www.google.com/url?sa=i&url=https%3A%2F%2Fexpertprogrammanagement.com%2F2018%2F04%2Fporter-diamond-model%2F&psig=AOvVaw0iO-4WjNarFIli7T2Az85l&ust=1589458374337000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCJCo-4DosOkCFQAAAAAdAAAAABAD)
Appendix 3: Value Chain Analysis