VODAFONE

VODAFONE STRATEGY

11

A REPORT ON VODAFONE STRATEGY

SUBMITTED TO
Prof. Hemali Tanna

MARWADI EDUCATION FOUNDATION GROUP OF INSTITUTIONS

PREPARED BY
Jignesh shingala Jayesh sherasiya Bhavin Vadhadiya (PGDM)

ACADEMIC YEAR
2010-2012

Table of Contents

Introduction & History of Vodafone ...................................................................................................................................... 5 Introduction .................................................................................................................................................................... 6 History ............................................................................................................................................................................ 7 Board of Director12 Product Portfolio and Marketing Strategy .......................................................................................................................... 13 Product & Service ......................................................................................................................................................... 14 Value Added Service .................................................................................................................................................... 20 Price.21 Place......22 Promotion23 People26 Processes.27 Physical Evidence27 Chapter vice Strategy of Vodafone28 Strategic Management & Competitiveness of Vodafone.29 Vision & Mission.30 Vodafone Business Model31 Competitive Advantage.32 Porter Five Force..34 Generic Strategy36 Brand Equity Evaluation of Vodafone.37 The External Environment of Vodafone38 Stakeholder..39 Business Level Strategy of Vodafone..40 Corporate Level Strategy of Vodafone42

Acquisition & Restructuring Strategies of Vodafone..45 Collaborative Strategies Alliances and Partnership.46 Potential Benefit of Customer........47 International Strategy of Vodafone.48 Supplementing the Chosen Strategy of Vodafone50 Blue Ocean Strategy..51 Corporate Governance of Vodafone52 SWOT Analysis.55

Introduction

Vodafone Group Plc is a global telecommunications company headquartered in London, Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers (behind China Mobile), with around 341 million proportionate subscribers as of November 2010. It operates networks in over 30 countries and has partner networks in over 40 additional countries. It owns 45% of Verizon Wireless, the largest mobile telecommunications company in the United States measured by subscribers. The name Vodafone comes from voice data fone, chosen by the company to "reflect the provision of voice and data services over mobile phones". Vodafone has its primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalization of approximately 93 billion as of 9 March 2011, making it the fourth-largest company on the London Stock Exchange. As of 2006 Vodafone had an estimated 260 million customers in 25 markets across 5 continents. On this measure, it is the second largest mobile telecom group in the world behind China Mobile.

History
In 1982 Racal Electronics plc's subsidiary Racal Strategic Radio Ltd. won one of two UK cellular telephone network licenses. The network, known as Racal Vodafone was 80% owned by Racal, with Millicom and the Hambros Technology Trust owning 15% and 5% respectively. Vodafone was launched on 1 January 1985. Racal Strategic Radio was renamed Racal Telecommunications Group Limited in 1985. On 29 December 1986 Racal Electronics bought out the minority shareholders of Vodafone for GB110 million. In September 1988 the company was again renamed Racal Telecom and on 26 October 1988 Racal Electronics floated 20% of the company. The flotation valued Racal Telecom at GB1.7 billion On 16 September 1991 Racal Telecom was demerged from Racal Electronics as Vodafone Group. In July 1996 Vodafone acquired the two thirds of Talkland it did not already own for 30.6 million. On 19 November 1996, in a defensive move, Vodafone purchased Peoples Phone for 77 million, a 181 store chain whose customers were overwhelmingly using Vodafone's network. In a similar move the company acquired the 80% of Astec Communications that it did not own, a service provider with 21 stores. In 1997 Vodafone introduced its Speech mark logo, as it is a quotation mark in a circle; the O's in the Vodafone logotype are opening and closing quotation marks, suggesting conversation. On 29 June 1999 Vodafone completed its purchase of Air Touch Communications, Inc. and changed its name to Vodafone Air touch plc. Trading of the new company commenced on 30 June 1999. To approve the merger, Vodafone sold its 17.2% stake in E-Plus Mobil funk. The acquisition gave Vodafone a 35% share of Mannesmann, owner of the largest German mobile network.

Vodafones original logo used until the introduction of the speech mark logo in 1998.

On 21 September 1999 Vodafone agreed to merge its U.S. wireless assets with those of Bell Atlantic Corp to form Verizon Wireless. The merger was completed on 4 April 2000.

In November 1999 Vodafone made an unsolicited bid for Mannesmann, which was rejected. Vodafone's interest in Mannesmann had been increased by the latter's purchase of Orange, the UK mobile operator. Chris Gent would later say Mannesmann's move into the UK broke a "gentleman's agreement" not to compete in each other's home territory. The hostile takeover provoked strong protest in Germany and a "titanic struggle" which saw Mannesmann resists Vodafone's efforts. However, on 3 February 2000 the Mannesmann board agreed to an increased offer of 112bn, then the largest corporate merger ever. The EU approved the merger in April 2000. The conglomerate was subsequently broken up and all manufacturing related operations sold off. On 28 July 2000 the Company reverted to its former name, Vodafone Group Plc. In April 2001 the first 3G voice call was made on Vodafone United Kingdom's 3G network. In 2001 the Company took over Eircell, then part of eircom in Ireland, and rebranded it as Vodafone Ireland. It then went on to acquire Japan's third-largest mobile operator J-Phone, which had introduced camera phones first in Japan. On 17 December 2001 Vodafone introduced the concept of "Partner Networks" by signing TDC Mobil of Denmark. The new concept involved the introduction of Vodafone international services to the local market, without the need of investment by Vodafone. The concept would be used to extend the Vodafone brand and services into markets where it does not have stakes in local operators. Vodafone services would be marketed under the dual-brand scheme, where the Vodafone brand is added at the end of the local brand. (i.e., TDC Mobil-Vodafone etc.) In February 2002 Finland was added into the mobile community, as Radiolinja is signed as a Partner Network. Radiolinja later changed its named to Elisa. Later that year the Company rebranded Japan's J-sky mobile internet service as Vodafone live! and on 3 December 2002 the Vodafone brand was introduced in the Estonian market with signing of a Partner Network Agreement with Radiolinja (Eesti). Radiolinja (Eesti) later changed its name to Elisa. On 7 January 2003 the Company signed a group-wide Partner agreement with mobilkom Austria. As a result, Austria, Croatia, and Slovenia were added to the community. In April 2003 Og Vodafone was introduced in the Icelandic market and in May 2003 Vodafone Italy (Omnitel Pronto-Italia) was rebranded Vodafone Italy. On 21 July 2003 Lithuania was added to the community, with the signing of a Partner Network agreement with Bit. In February 2004 Vodafone signed a Partner Network Agreement with Luxembourg's LuxGSM and a Partner Network Agreement with Cyta of Cyprus. Cyta agreed to rename its mobile phone operations to CytamobileVodafone. In April 2004 the Company purchased Singlepoint airtime provider from John Caudwell (Caudwell Group) and approx 1.5million customers onto its base for 405million, adding sites in Stoke on Trent (England)

to existing sites in Newbury (HQ), Birmingham, Warrington and Banbury. In November 2004 Vodafone introduced 3G services into Europe. In June 2005 the Company increased its participation in Romania's Connex to 99% and also bought the Czech mobile operator Oskar. On 1 July 2005 Oskar of the Czech Republic was rebranded as Oskar-Vodafone. Later that year on 17 October 2005 Vodafone Portugal launched a revised logo, using new text designed by Dalton Maag, and a 3D version of the Speech mark logo, but still retaining a red background and white writing (or vice versa). Also, various operating companies started to drop the use of the SIM card pattern in the company logo. (The rebranding of Oskar-Vodafone and Connex-Vodafone also does not use the SIM card pattern.) A custom typeface by Dalton Maag (based on their font family Interface) formed part of the new identity. On 28 October 2005 Connex in Romania was rebranded as Connex-Vodafone and on 31 October 2005 the Company reached an agreement to sell Vodafone Sweden to Telenor for approximately 1 billion. After the sale, Vodafone Sweden became a Partner Network. In December 2005 Vodafone won an auction to buy Turkey's second-largest mobile phone company, Telsim, for $4.5 billion. In December 2005 Vodafone Spain became the second member of the group to adopt the revised logo: it was phased in over the following six months in other countries. In 2006 the Company rebranded its Stoke-on-Trent site as Stoke Premier Centre, a centre of expertise for the company dealing with Customer Care for its higher value customers, technical support, sales and credit control. All cancellations and upgrades started to be dealt with by this call centre. On 5 January 2006 Vodafone announced the completion of the sale of Vodafone Sweden to Telenor. On February 2006 the Company closed its Birmingham Call Centre. In 1 February 2006 Oskar Vodafone became Vodafone Czech Republic, adopting the revised logo and on 22 February 2006 the Company announced that it was extending its footprint to Bulgaria with the signing of Partner Network Agreement with Mobiltel, which is part of mobilkom Austria group. On 12 March 2006 former chief, Sir Christopher Gent, who was appointed the honorary post Chairman for Life in 2003, quits following rumours of boardroom rifts. In April 2006 the Company announced that it has signed an extension to its Partner Network Agreement with BITE Group, enabling its Latvian subsidiary "BITE Latvija" to become the latest member of Vodafone's global partner community. Also in April 2006 Vodafone Sweden changed its name to Telenor Sverige AB and Connex-Vodafone became Vodafone Romania, also adopting the new logo. On 30 May 2006 Vodafone announced the biggest loss in British corporate history (14.9 billion) and plans to cut 400 jobs; it reported one-off costs of 23.5 billion due to the revaluation of its Mannesmann subsidiary. On 24 July 2006 the respected head of Vodafone Europe, Bill Morrow, quit
9

unexpectedly and on 25 August 2006 the Company announced the sale of its 25% stake in Belgium's Proximus for 2 billion. After the deal, Proximus was still part of the community as a Partner Network. On 5 October 2006 Vodafone announced the first single brand partnership with Og Vodafone which would operate under the name Vodafone Iceland and on 19 December 2006 the Company announced the sale of its 25% stake in Switzerland's Swisscom for CHF4.25 billion (1.8 billion). After the deal, Swisscom would still be part of the community as a Partner Network. Finally in December 2006 the Company completed the acquisition of Aspective, an enterprise applications systems integrator in the UK, signaling Vodafone's intent to grow a significant presence and revenues in the ICT marketplace. Early in January 2007 Telsim in Turkey adopted Vodafone dual branding as Telsim Vodafone and on 1 April 2007 Telsim Vodafone Turkey dropped its original brand and became Vodafone Turkey. On 1 May 2007 Vodafone added Jersey and Guernsey to the community, as Airtel was signed as Partner Network in both crown dependencies. In June 2007 the Vodafone live! Mobile Internet portal in the UK was relaunched. Front page was now charged for and previously "bundled" data allowance was removed from existing contract terms. All users were given access to the "full" web rather than a Walled Garden and Vodafone became the first mobile network to focus an entire media campaign on its newly launched mobile Internet portal in the UK. On 1 August 2007 Vodafone Portugal launched Vodafone Messenger, a service with Windows Live Messenger and Yahoo! Messenger. On 17 April 2008 Vodafone extended its footprint to Serbia as VIP mobile was added to the community as a Partner Network and on 20 May 2008 the Company added VIP Operator as a Partner Network thereby extending the global footprint to Macedonia. In May 2008 Kall of the Faroe Islands rebranded as Vodafone Faroe Islands. On 30 October 2008, the company announced a strategic, non-equity partnership with MTS group of Russia. The agreement adds Russia, Armenia, Turkmenistan, Ukraine, and Uzbekistan to the group footprint.

10

VODAFONE
Today, in India, becomes Vodafone. Now, the pink color logo of Hutch is replaced by Vodafone Essars corporate red colored one.

In 2005-06, the Orange brand in Mumbai was phased out to introduce (now Vodafone). The company also changed the colors of its logo from orange to pink and then red.

After acquiring 67 per cent of stake (around Rs. 250 crores) in ison Essar from Hong Kong-based ison Whampoa, Vodafone Essar is expecting to touch over 35 million customers across 400,000 shops and thousands of s own employees along with employees of its business associates. Vice chairman, Ravi Ruia, Vodafone Essar, said Weve had a good innings as in India and today marks a new beginning for us, not as a departure from the fundamentals that created , but an acceleration into the future with Vodafones global expertise.

Vodafone CEO, Marten Pieters of the Vodafone Essar will be landing in India for the meeting that would discuss branding exercise, expansion plans, spectrum requirements for its expanding subscriber base and future plans.

Vodafone offers a host of premier value added services (VAS) including national and international roaming in over 70 countries in over 160 networks, Wireless Application Protocol (WAP), short message service, voice mail service, auto roam, fax and data, cricket updates, M-banking, general information, tarot line, etc. The company launched WAP in Delhi in October 2000, much before its rival Bharti. It has 5000 WAP customers, as in December 2000. The company has been a prime mover in introducing these value-added services in the Delhi circle.

11

Board of directors

Chairman
Sir John Bond

Executive directors

Chief Executive Vittorio Colao

Financial Officer Andy Halford

Executive Officer

Michel Combes Michel Combes

Technology Officer Stephen Pusey

Deputy Chairman John Buchanan

Non-executive directors

Alan Jebson

Samuel Jonah

Nick Land

Anne Lauvergeon

Simon Murray

12

13

PRODUCT & SERVICE

1. PRODUCTS AND SERVICES

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. VOICE SERVICES Pre Paid services Post Paid services World calling cards Vodafone PCO Vodafone Handyphone

Various Prepaid services offered are:

1. Talktime offers

It includes: Full Talktime Recharge(For those who look for value for money) Bonus Cards with talk time benefits(for those who change the talk plans frequently) Chhota recharge(For low end user, mainly rural)

14

2. Validity Offers

Validity offers are: Life long prepaid

3. Bonus Cards

They are: SMS pack(For those who love texting) Mobile internet pack(Connect to internet anywhere) Conversations @ 1p/second(For small talks) Call anyone anywhere @ 50p/minute(For people who call a lot to other circles) Talk all night @ 10p/minute to Vodafone(For lovers) SMS @ 10p(For those who text often) Night Minutes(For those who talk freely at night)

15

4. Tariff offers

Tariff offers are: Vodafone Campus pack(For Students) Vodafone Gappagoshti(For elder people who like to chat) Vodafone friends circle(For young people who love to be in touch with friends)

Various Postpaid services are:

1. Talkplans for everyone

2. Bill in your Inbox

16

3. My Vodafone

Vodafone Business Services

Some services are specially designed for high end business customers which help them keep track of their businesses in a much better and easier way. Some Business Services are: 1. Vodafone Mail(For businessmen who travel a lot)

2. Vodafone Mobile Connect 3G(Anytime Easy high-speed internet connectivity)

3. Essential Downloads(Basic Application Softwares for utilising all the services)

17

Vodafone world Calling Cards

World Calling Card from Vodafone is a Prepaid long distance calling card that can be used with Vodafone Prepaid and Postpaid mobile phones to make ISD & STD calls

Vodafone PCO

A Vodafone PCO can be Installed in house or shop with fixed cellular terminals to earn money. Its easy to install, maintain and use and provides uninterrupted service.

Vodafone Handy Phones

The landline thats loaded with all the features of a cell phone including low call rates

18

Product:

19

(1)

VALUE ADDED

SERVICES

20

(2)
Vodafone wants to make its services accessible to as many people as possible: from the young, high powered business executives, to the more mature users. It offers various pricing structures to suit different customer groups. Monthly Price Plans Pay As You Do Plans Call Charges While Going Abroad Pay Monthly Call Charges Business Call Charges Monthly Price Plans Are Available As well as prepay options. Phone users can top up their phone on line. A number of schemes are being introduced from time to time to match the customer needs, like unlimited free messages card, 1paisa per second call rates. The top ups are available from Rs. 10. Its pricing strategies varies accordingly by offering features like Filmy recharges and SMS value packs targeted at the youth segment to features like bonus cards and longer validity schemes at a similar pricing but targeted at the lower income segment. Magic hand boxes: Magic Hand boxes are products by which Vodafone can attract customers from a variety of income groups and other demographic characteristics. In order to make it available to a very wide section of the audience Magic hand boxes are made available from prices as low as Rs.999 to Rs.9999. Vodafone PCO: Vodafone PCO can be bought at Rs3750, and a Starter Kit worth Rs750 can be got with it. Vodafone Handyphone: Vodafone handyphones are available at the rate of Rs.1999

PRICE

21

(3) PLACE

DIRECT DISTRIBUTION Vodafone directly owns and manages over 1,150 stores. These stores sell services to new customers, renew or upgrade services for existing customers, and in many cases also provide customer support. The internet is a key channel to promote and sell Vodafones products and services and to provide customers with an easy, user friendly and accessible way to manage their Vodafone services and access support. INDIRECT DISTRIBUTION The extent of indirect distribution varies between markets but may include using third party service providers, independent dealers, distributors and retailers.(Intensive Distribution)

22

(4)
PROMOTIONS

Unlike the other telecom majors which rely heavily on Film stars and cricketers to promote their brands, Vodafone has focused on advertising campaigns like the Pug and Zoo Zoos to have connect with the people. ABOVE THE LINE: 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. BELOW THE LINE: Stores have special offers and point of sale posters to attract those inside the stores to buy.

ADVERTISING ON TV:
Each ad was used for promoting a particular Value Added Service of Vodafone e.g. Easy recharge, callertunes, internet, roaming, bill payment, SMS packs, music, unwanted calls blocker, etc. The ads were a hit among the

23

Indian people, especially the youth. This trend can be observed from the huge fan following on social networking sites, Facebook, Orkut and Twitter.

24

VODAFONE BILLBOARDS

MAGAZINE ADS

OD

DFSD VSGSDGD

GSGSG

25

SOCIAL NETWORKING SITES Vodafones zoozoo ads to promote the brand was a hit among the Indian people, especially the youth. This trend can be observed from the huge fan following on social networking sites, Facebook, Orkut and Twitter.

(5) PEOPLE
Vodafone Essar India has an employee database of around 10,115 in the financial year 2010 which is considered as a dedicated and passionate workforce and one of the best customer service support teams. Fun is incorporated in the work life of employees of Vodafone. Empowerment and career development go simultaneously with all opportunities in Vodafone. It provides a dynamic environment and challenging opportunities to its employees. Vodafone Essar Limited has received many awards over the years such as the Best Mobile Service in India, Most Effective and Most Creative Advertiser of the Year, and Most Respected Telecom Company. Moreover it aims to reach the maximum number of people.

26

(6)
PROCESSES

Vodafone Essar India provides a wide variety of services in mobile communication and other value added services by adopting an easy-to-use customer friendly approach. All information about its basic and other valued services and various promotional offers can be availed through a unique customer care number 111 which can be dialed from anywhere in India.

(7) PHYSICAL EVIDENCE

Physical Evidence is the element which allows the consumer again to make judgments on the organization. The most important physical evidence of for the Vodafone is its existing customer base. The Vodafone Essar subscriber bases in the cities of India are: City Kolkata Mumbai Delhi Chennai No. of customers 1,632,875 2989970 3002442 981996

27

 Existence of the customer care centers across the country, Vodafone mini stores that are small in size but big in service, Vodafone stores; Vodafone outlets are all a part of the physical evidence that facilitate the customer judge the service.

28

29

Vision and mission

Vision:
To be the world's mobile communication leader enriching our customers' lives through the unique power of

mobile communications

Mission:
1. FOR CUSTOMERS: In anticipation of their customers trust Vodafone understands their needs & delights them with its services.

2. FOR OUR PEOPLE: Outstanding people working together make Vodafone exceptionally successful.

3. FOR RESULTS: Vodafone believes in being action oriented & is driven by a desire to be the BEST.

30

4. FOR THE WORLD AROUND US: Vodafone believes helping people of the world to have fuller lives through their services & its impacts.

Vodafone business model

Vodafone India has been quite on a rise for some time. Ever since hutch rebranded to Vodafone, it has shifted a lot. Infact, currently, in terms of growth, Vodafone is the most growing network(in terms of number of customers, not in the percentage aspect). And this has been quite some story. The new Vodafone management has changed things in quite some ways. It decided to get seamless connectivity for its consumer base, and get billings straight

Vodafone decided to play by its strengths, and somehow manage to hide its weaknesses. They're playing on their strengths but weaknesses are something that cannot be hidden for a long time. Poor resolution is their issue. For the last three and a half years, Ive been on Vodafone, and the resolution hasn't been consistent.

Although they've somehgow managed to keep quality people in their man force, but still the technicalities hasn't let them work to their full strength. For example, whenever a customer goes to the Vodafone store, he has to wait for long. Reason : The staff is busy clearing up records, and taking down official notes after the customer has left.

Vodafone seems to have learnt from Bharti Airtel on how to work efficiently. Airtel had been a hit with companies, as their corporate connections were dead cheap. So is Vodafone nowadays.

There's no reason for not promoting so. Plus, Airtel on the other hand, hasn't expanded its postpaid drive after its initial success. It changed its focus from Indian telecom to DTH,IPTV and African telecom.

Once Airtel used to come up with really innovative services like Hell to Tunes(Caller Ring Back Tones),Sms 2.0(more customizable sms services), and recently web pc(a super cheap pc which works
31

from clouds as it has no local storage drives). Also, decreasing quality of service, and bad complaint redressal has made it worse.

Coming back to Vodafone, its recently launched 3G internet services are being aggressively promoted. In fact, just to get people using mobile internet, they have recently started a whole new campaign called Super weeks, where the give some internet based service for free for a week(for example, all social networking sites were free to browse between 16 and 22nd April). Such promotional schemes to promote value added services, which are already being promoted at attractive tariff plans is a good idea. It like supporting a service support process. Interesting concept at first sight.

Competitive advantage

COMPETITIVE ADVANTAGE

The competitive advantage of Vodafone Services was that, that it is equally strong as Mobil ink but at an affordable price. This service possesses some kind of uniqueness which the other brand does not possess.

Which differences to promote Not all brand differences are meaningful or worth-while not every difference makes good differences are meaningful or worth-while not every difference make a good differentiator. Each difference has the potential to create company costs as well as customer benefits .therefore; the company must carefully select the ways in which it will distinguish itself from competitors. A difference is worth establishing to the extents that it satisfies the following criteria.

Affordable: .

Our services are a unique in many aspects; one of them is the price. We have offered our communication services at low price than the other services. We are able to do this because of the new technology, equipments, and accessories. The modern techniques help us to minimize the cost in the tea 32 production

Important:

The difference delivers a highly valued benefit to target buyer

Superior The difference is superior to other ways that customers might obtain the same benefit.

. Communicable The difference is communicable and visible to buyers.

Preemptive

Competitors cannot easily copy the difference.

Profitable:

The product must provide a real benefit to consumer.

With a large market share in India's major cities and presence outside of the cities, they will be able to capitalize on India's cell phone expansion. Hutchison has said that it will not accept anything less than 14 billion and

33

many think that the offers are creeping closer to 20 billion. Vodafone is a major player in this acquisition, but they have some hurdles to overcome.

Vodafone has put forward a non-binding offer of 16.5 billion, but Essar has a chance to match this, and with the backing of Reliance Communications, the ante could come close to 20 billion. Essar Group's current 33% stake in the company gives them substantial power if Vodafone were to try to make changes to the company postacquisitio

Porters FIVE FORCE

Porter Five Forces Of Vodafone

Rivalry:
The threat of rivalry in this business is impacted by the low number of big firms in the market. There are a few numbers of large firms worldwide that competes for the market share; this lowers the threat of rivalry. The firms that are in the business however are very competitive and because of a relative slow market growth in this industry the firms fight over the market shares that are out there and that increase the threat. There is also a low level of switching costs to the consumer and a low level of product differentiation and this further brings the threat level of rivalry up. So in the mobile network industry the threat of rivalry is fairly high.

Substitutes:
The threat of substitutes for voice and data communication over the traditional network is moderate. People calling over long distances could instead of picking up a phone go to a computer and call through that. The low costs of computer calling could potentially take over most long distance calling. The more local calls and business calls would be more secure for the mobile market, although cell phones with the ability to use the internet to make calls are being made available and will soon take a considerable market share of calls made. The threat of substitutes can be reasonable high in this industry.

Buyers:
The threat of buyers in this industry can be considered fairly low. The individual buyer has no impact on the price of the products offered.

Suppliers:
Suppliers power in some aspects of this industry is high. In the cell phone part of the business the suppliers of the phones can have a big impact on the price of products and the condition of the deal they make with the
34

provider. One clear example of this is when apple launched their new I-phone. They made an exclusive contract with AT&T so they had the exclusive right to be the service provider to their phone in America. So the suppliers power in this industry is high.

New Entry:
The threat of entry is highly influenced by the economy of scale of the existing companies. The large well established companies that have a strong foothold in the market and a known brand name would make entry for a new company costly. Although there are some new arrivals the larger firms control the market and will put pressure on any new entries. The threat of new entries is fairly low for the bigger companies.

Vodafone and Linksys 3G/Wireless Router Opens New Market and Demonstrates Strategic Collaboration Launched in Spain in September 2005, the Vodafone and Linksys 3G/Wireless Router is now available in Australia, Austria, Germany, Greece, Ireland, Italy, the Netherlands, New Zealand, Portugal, Spain, South Africa, and the UK. It is the first solution of its kind to be widely available through established third-party distributors and resellers, supported by an extensive customer service infrastructure. The team believes it is at least 12 months ahead of competitors. Using Vodafones Mobile Connect 3G/UMTS (Universal Mobile Telecommunications System) data card in combination with the Linksys WRT54G3G Wireless-G Router, it is a plug-and-go solution that works wherever there is 3G/UMTS coverage (or the lower-bandwidth General Packet Radio Service [GPRS]) and a power supply.

35

Generic Strategy

36

BRAND EQUITY EVELUATION OF VODAFONE

37

38

The external environment of Vodafone

Ethics guide companies in reacting to changes in the environment. Managers can use a number of different tools to understand the environment. This understanding is important. It helps managers to make better decisions. SLEPT analysis is one of these tools and which looks at changes in five areas: Social Legal Economic Political Technological - trends in society - legal restrictions and considerations - the health of the economy, inflation, etc - government policy - developments in computing, etc.

The following sections provide some examples of each factor, which are relevant to Vodafone. Social factors Society is concerned about under 18s being at risk. Parents may have concerns about their children being contacted (using mobile phones) by paedophiles or other adults. Society is also concerned about adult content being available via mobile phones to under 18s. Adult content includes gambling, violent games, erotic material etc. Further issues related to 'social' include the rise of mobile phone theft. Legal factors Some laws regulate all businesses e.g. The Sale of Goods Act 1974 stating all products must be fit for the purpose they are intended. A mobile phone must therefore work. Certain laws are created to regulate particular industries. Examples include the ban on using holding a phone while driving introduced in 2003.

Vodafone goes beyond government regulation, working with its competitors in self-regulation. However to retain its leading position in the industry Vodafone believes it must exceed both legal regulations and industry self-regulation. Economic factors

39

The state of the economy, for example levels of growth can impact companies. Companies' activities also contribute to the overall economy. Companies should remain true to their ethical values. If they do not, customers may question the company's beliefs. Political factors Government policy indicates that it wants the mobile phone industry to create self-regulating controls in relation to content. The government also shares public concern about unwanted contact and content. Technological factors The mobile phone industry has seen a great deal of technological change and will continue to do so. Mobile phones were originally used for telephone conversations. Text messaging became available and usage has increased dramatically. However, most of the texts were between people who already knew each other and had swapped contact numbers. In other words the users were happy to communicate with each other.

Stakeholder

Stakeholder engagement' is jargon for something companies have done for decades: talking to people who are important to them. We want to understand the views of our stakeholders people who can affect our business or who are affected by it and explain our perspectives. The feedback we receive from external stakeholders informs our judgment about sustainability priorities for our business and feeds into our sustainability strategy as appropriate. Our aim is for both Vodafone and its stakeholders to benefit from the process. In cases where we do not agree or cannot respond to the feedback we have received, we aim to explain our position honestly and openly. Our stakeholders include investors, employees and suppliers, who are directly affected by our business performance, and consumers who relate to us as a service provider. Many more in communities see our network infrastructure and some have strong views about it. Non-governmental organizations and sustainability opinion formers are often concerned about specific issues. Governments and regulators can affect our business through new legislation and regulations.

40

We tailor our engagement processes to suit each different stakeholder group. Our local markets play an important role in forming relationships with local stakeholders.

41

Business LEVEL STRATEGY

1. Rivalry with Existing Competitors

Vodafone's position as cost leader, competitors has a hard time competing on basis of price because the competitors will fall on their face if any aspects of the logistics or operations are inferior.

2. Bargaining Power of Buyers

The buyers in the mobile telephony industry are strong. These powerful buyers can reduce the cost leaders prices, but not past the level of their closest competitor. This ensures Vodafone will continue to profit at above average returns compared to its closest competitor.

3. Bargaining Power of Suppliers

Suppliers of the mobile telephony industry are strong. Vodafone, by being a cost leader, operates with margins greater than its competitors, which, in turn, allows them to absorb price increases from its suppliers easier than its competitors. By being a large, focused player of the mobile telephony industry, Vodafone could hold suppliers costs down, and it could make a profit even if its competitors are making only average returns.

4. Potential Entrants
While the threat of new entrants is weak, Vodafone must continue to reduce costs below that of its competitors. By maintaining high levels of efficiency, Vodafone can help make the entrance into the mobile telephony industry unattractive to its potential competitors.

5. Product Substitutes
Vodafone faces a low threat of product substitutes. The focused cost leadership strategy that Vodafone operates under makes it difficult for a comparable substitute to be produced at a lower rate by their excellent use of economies of scale, their buying power, and their absorption of temporary price increases that come from suppliers that dont need to be passed on to the consumer.

42

43

CORPORATE LEVEL STRATEGY

Vodafone was heavily focused on acquisitions, including Mannesmann, to open cost advantages through economies of scale. Vodafone wanted technological leadership in the mobile telephony industry. Vodafone wanted to strengthen its standing in continental Europe, a geographically significant area where they had low market share. Vodafone wanted to acquire Mannesmann because they held a considerable portion of the market share in their industry. By acquiring Mannesmann Vodafone would be able to gain cost advantages as well as gain market share and market power in Europe. By buying a competitor off the market Vodafone could gain their entire market share and eliminate the risks associated with rivalry that had been present between the two companies. This acquisition would also be a diversification for Vodafone if they chose to take advantage of the fixed line capabilities of Mannesmann. It would also help Vodafone reduce the barriers to a greater share of the European market since Mannesmann already had a strong market share. Vodafone merged with Airtouch to become Vodafone Air Touch, the largest mobile phone operator in the world. It gave Vodafone an easy way to expand to North America with low barriers to entry since Air Touch was already the leader in that market. This was a major step forward in our strategy to expand the penetration of mobile phone services to the largest possible number of customers and the largest possible markets said Chris Gent, Vodafone CEO, on the merger with Air Touch. Vodafone formed a strategic alliance in the United States with Bell Atlantic that would use the same digital technology as Vodafone Air Touch and it would be the largest mobile telecommunications company in the US. They owned 45 percent of the company giving them a high potential for profits. Since Bell would be managing the company, Vodafone would not have to worry about understanding the competitive conditions, legal and social norms, and cultural idiosyncrasies of the US market, which would help Vodafone manufacture and market a competitive product.

What type of diversification best represents Vodafones mix of businesses (i.e., single business, dominant business, related constrained, or related linked)?
44

Vodafone had recently expanded internationally through an alliance with Bell Atlantic, a merger with Air Touch, and several acquisitions. These value creating strategies of diversification exhibit high operational relatedness between businesses and somewhat low corporate relatedness because Vodafone did not maintain managerial control in all of its new ventures. These related diversifications would increase Vodafone's economies of scope by sharing activities and transferring core competencies. Vodafone's market power would be increased by being able to block competitors through multipoint competition.

What is the international corporate-level strategy being followed by Vodafone?

Vodafone pursued a global international corporate-level strategy. Their low market share in continental Europe could be considered an artifact of their global strategy. The basis for their mobile telephony network remained unchanged throughout their diverse markets, these standardized products point to a global strategy. While their global strategy produces lower risk, they may not grow as fast as their competitors who have a multi-domestic strategy. As a result, recent diversifications, like the strategic alliance with Bell Atlantic seem to point towards a more multidomestic strategy to take advantage of their specialized corporate core competencies by delegating the management tasks. Vodafone's global international corporate-level strategy is succeeding. The technology, GSM, that enables their mobile telephony networks is built to global standards, and has led to significant economies of scale in producing and operating these networks.

What was the choice-of-entry mode used by Vodafone in its expansion into international markets?
Vodafone entered into international markets initially through merger, and later through acquisitions and alliances. Vodafone's choice to use a cooperative strategy led to alliances with its competitors in Europe, including Mannesmann, Belgacom, BT, Cegetel, TDK and TIW. Vodafone was trying to get a larger market share in Germany so they bought 35% of D2 from Mannesmann, who is Vodafones top competitor in Europe. Vodafone partnered again with Mannesmann to buy 21% of Omnitel (an Italian company). Vodafone had alliances with Government organizations in Greece, Holland, Portugal and Sweden. By partnering with competitors in Europe, Vodafone increased its market shares.

45

46

Collaborative Strategies Alliances and Partnerships

Vodafone and Conexus Mobile Alliance Form Strategic Partnership 20 September 2011

Significantly expands Vodafones presence in Asia and provides Conexus with greater access to Vodafones global footprint Advances both Vodafones and participating Conexus members ability to deliver communications services to multinational businesses both in and out of the region Enhances the roaming experience for a combined global mobile customer base of over 600 million Vodafone Group (Vodafone) and the Conexus Mobile Alliance (Conexus or the Alliance) today jointly announce that they have agreed to form a strategic partnership which will significantly expand Vodafones partner market presence in Asia and provide Conexus member customers with greater support in Vodafones global footprint. Vodafone intends to work with as many of the Conexus members as possible*, complementing Vodafones own regional operations in India, Australia, Fiji and New Zealand and its existing partners in Malaysia (Celcom) and Sri Lanka.Over time, Vodafones agreement with Conexus will include partnerships with:

- FarEasTone (Taiwan); - Hutchison Telecom (Hong Kong); - NTT DOCOMO (Japan); - SMART (the Philippines); - StarHub (Singapore); and - TrueMove (Thailand). Conexus members will be able to use the Vodafone brand, enjoy access to Vodafones devices and services in their home markets and become the preferred partner of Vodafone in respect of the agreed
47

areas of cooperation. Together, Vodafone and Conexus will provide customers with enhanced network coverage, harmonized roaming rates across multiple countries and greater cost efficiencies.

Potential benefit of customer

Vodafones multinational customers will benefit by being able to add the Conexus countries to their existing contracts for international managed services, while continuing to be serviced via a single point of contact. Conexus members will similarly benefit from Vodafones footprint. In addition, Vodafone and Conexus plan to support multinational corporations by providing communications expenditure tracking and procurement services while introducing innovative mobile price plans across the two organizations shared area of The unprecedented partnership between Conexus and Vodafone is a realization of Conexus growth strategy. We believe that it has marked the worlds first collaboration between one of Asias largest mobile alliances and one of the worlds largest mobile communities. The partnership is of strong strategic value to the Alliance. It will not only enable us to further extend our global reach but also increase our overall competitiveness especially in coping with diverse global customer requirements. The partnership showcases our common vision to provide our combined global mobile customer base of over 600 million customers with preferential roaming services and unique value propositions for corporate customers. It also offers a good opportunity for Conexus members to extend their business relationships to more than 40 existing partners of Vodafone, Mr. Kwok added.

48

49

International Level of Vodafone

No deployment of any standard template in integrating its international acquisitions. Economics of scale by entering new market and spreading fixed cost. Gain market share by differentiation through value adding content, network quality and customer care.

Benefits of International scope

Gain market share Economics of scale Product differentiation Acquire technology Utilization of surplus and fund

50

51

Blue ocean STRATEGY

Blue ocean strategy is generating unchallenged new market space by creating the differentiation and low cost. The main objective of blue ocean strategy is stealing customer from the competitors and also confine of existing

52

company within the competitive market. The blue ocean defines as powerful, deep regarding the market profit, infinite and level growth. The blue ocean and red ocean strategies are both different from it selves. The products, services and deliveries are included in innovation of the company. The porters five forces are implemented on Vodafone such as buyer power so Because of the mobile industries buyers are being strong so that powerful buyers have reducing the value of the cost leadership but also decrease the level of competitors within the market place such as Vodafones buyers have the bargaining power to buy and to grow the competitive market in Europe and the other areas. These outcomes are shown that Vodafone has great value of profit margin above the average returns by comparing the other competitors such as Orange, 3g, O2 in Europe and BSNL, Idea, Airtel in India. After talking about the buyer power supplier power has also strength to compete the market. the high supplier power always help to the company such as Vodafone has strong supplier power for being the cost leader and operate or maintain the margin within the market competition. Thus, supplier power allows Vodafone to increase their products price and covering the all aspects of the products. Supply and buyer power are vice versa and implemented same situation in the market. maintaining the level of large and being a large player of the telecommunication industry, competitors could have get less profit because of Vodafone by holding the supplier cost this time and made profit to its competitors and competitors have get only average return on its supply. Potential entrants always been to low at the first time but the time spending in the market they have gone to further. Vodafones new entrants must have to reduce its price to save and to continue its product sale and increasing the buying power of the Vodafone. Now maintaining the entrants values and stability in the market Vodafone has to attractive and make down its competitors. If products have failed to stable or dont get to much response from the buyers so Vodafone has to decrease the threats and establish the substitute products at the market place within the competition period as per economic scale, buying power of Vodafone and its satisfied price which come from supplier. And last but not the list Vodafone has facing high rivalry from its competitors because Vodafone made a first call in the UK at 1 st January 1985 and it was the only network around the UK. Thus, the competitors rivalry affecting on Vodafone high but Vodafone also have provided all facilities and schemes to the customers.

53

CORPORATE GOVERNANCE

54

We are committed to high standards of corporate governance which are critical to our business integrity and to maintaining investors' trust in us. We expect all our directors, employees and suppliers to act with honesty, integrity and fairness. Business principles Our business principles set out the standards we set ourselves to ensure we operate lawfully, with integrity and with respect for the culture of every country in which we do business Board organization and structure The role of the Board The Board is responsible for the overall conduct of the Groups business and has the powers, authorities and duties vested in it by and pursuant to the relevant laws of England and Wales and the articles of association of the Company. The Board:

has final responsibility for the management, direction and performance of our businesses; is required to exercise objective judgment on all corporate matters independent from executive management;

is accountable to shareholders for the proper conduct of the business; and is responsible for ensuring the effectiveness of and reporting on our system of corporate governance.

The Board has a formal schedule of matters reserved to it for its decision and these include:

Group strategy and long-term plans; major capital projects, acquisitions or divestments; annual budget and operating plan; Group financial structure, including tax and treasury; annual and half-year financial results and shareholder communications; system of internal control and risk management; and Senior management structure, responsibilities and succession plans.

The schedule is reviewed annually. It was last formally reviewed in March 2011 at which time, it was determined that no amendments were required.

55

Independent advice

The Board recognizes that there may be occasions when one or more of the directors feels it is necessary to take independent legal and/or financial advice at the Companys expense. There is an agreed procedure to enable them to do so.

56

57

SWOT ANALYSIS STRENGTHS

Leading presence in emerging markets. The brand name it has in the Indian market. The kind of subscriber it has in the Indian market. It has the 2nd highest market share in India. It has a 2nd highest subscriber base in India. Its strong advertising strategies and impact on people. Its Indias 3rd biggest mobile carrier.

WEAKNESSES
Negative return on assets (ROA) underperform key competitors like AT&T, BT Group, Deutsche Telecom US business not nearly as strong as European/rest of the world operations 80% of its business is generating in Europe. Low R&D. High customer churns (33.33%). Rural India unable to relate to the brand. Poor network coverage.

OPPORTUNITIES
Focus on cost reductions improving returns Research and development of new mobile technologies Emerging markets and expansion abroad Innovation Product and services expansion Growing data business and 3G auctioning VAS as a means to increase ARPU (big boss, Zoo Z00) Growing Enterprise solution market (10.2% in 2009 anticipated). Large capital can be raised by listing Vodafone on Indian Stock Exchange (IPO).
58

Tower sharing business with Indus Towers.

THREATS
Highly competitive market. Still lags behind major competitors in the US. Extremely high penetration rates in key European markets.

59