2. Index
• History and Growth
• SWOT Analysis
• Challenges
• Five Forces Analysis
• Financial Analysis
• Corporate Level Strategy
• Business Level Strategy
• Recommendations
3. History and Growth
• The company was formed as “Racal Telecom Limited” in 1984
• Vodafone grew enormously in short time through strategic
acquisitions and the subsequent integration of the acquired units
• Whilst the company had some setbacks in 1999 and 2001,
Vodafone was still the world’s largest cell phone provider by
revenue in 2006
• As of 2006 the empire spanned 26 countries controlled cell phone
operations in 16 countries, while holding minority stakes in 10
others
4. SWOT Analysis
Strengths Opportunities
Diversified geographical portfolio Conquer growing emerging Markets
Network infrastructure Research and development of new
Integration of subsidiaries under the mobile technologies, e.g. increasing 3G
Vodafone umbrella and 4G Coverage
High brand awareness Learn from “China Mobile”
Superior customer service
Weaknesses Threats
Weak US Presence Highly competitive market
No presence in Latin America, many Extremely high penetration rates in key
African countries, and other markets European markets
Still lags behind major competitors in the
Most of business generated soley in
US
Europe
Monetize mobile data growth
5. Challenges
• Room to grow in emerging markets
• New technology—3G, Wi-Fi
• High sunk and fixed costs
• Constantly looking for new sources of revenue
– High costs to acquire new customers
– High churn rates
– Low-value customers—breaking even takes time
• Integration
– Underperformance of stock because of difficulty assessing value
created
– Cultural alignment
– Technology alignment
6. Five Forces Analysis
• Threat of new entrants: LOW
– High costs and licence fees, high competition
• Bargaining power of suppliers: LOW
– Give and take, suppliers depend on mobile providers
• Bargaining power of buyers: HIGH
– Cutthroat competition, easy number portability
• Threat of substitute products: Moderate
– Email, Skype, Social Network Messengers
• Rivalry among competing firms: HIGH
– Highly competitive industry
7. Financial Analysis
£40,000.00
£30,000.00
£20,000.00
Turnover (in £m)
£10,000.00 Profi (Loss) aT (in £m)
Profit (Loss) (in £m)
Net Chash Inflow (in £m)
Net Cash Inflow (in £m)
£0.00
-£10,000.00
5
9
1
6
9
1
7
9
1
8
9
1
9
1
0
2
1
0
2
0
2
3
0
2
4
0
2
-£20,000.00
8. Corporate-Level Strategy
• Low levels of diversification—the firm provides cell
phone services
• Simultaneous operational and corporate
relatedness—Vodafone Group shares activities and
transfers core competencies
• Has economies of scale and size through horizontal
acquisitions and partner network agreements
9. Business-Level Strategy
• Differentiation strategy
• Combines broad target and uniqueness
• Combines broad target and uniqueness
– Global, through acquisitions
– Value-added services such as roaming and data
• Balances coordination and synergies with local
initiatives
10. Recommendations
Continue to perform gradual acquisitions, careful
not to cause stock underperformance
Focus on emerging technology through
acquisitions, buying rights and/or patents, or
developing technology themselves
Conquer the growing emerging country markets
Gain greater market share in the US and in
France
Learning from China Mobil operating methods
