Vodafone Case Study


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Case study for MBA coursework.

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Vodafone Case Study

  1. 1. VODAFONE Case Study Lauren & Florian
  2. 2. Index• History and Growth• SWOT Analysis• Challenges• Five Forces Analysis• Financial Analysis• Corporate Level Strategy• Business Level Strategy• Recommendations
  3. 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. 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 3GVodafone 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 keyAfrican countries, and other markets European markets Still lags behind major competitors in theMost of business generated soley in USEurope Monetize mobile data growth
  5. 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. 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. 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. 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. 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. 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
  11. 11. Thank You! & The End