Analyse stratégique, Vodafone, strategic analysis, global Telecommunications Industry, market penetration strategy, product development strategy, market development strategy, diversification strategy, COSt leadership strategy, differentiation strategy, focus strategy
Vodafone Group Plc provides a full range of mobile telecommunications services and is the world's largest mobile telecommunications company, in terms of the number of registered customers, with a significant presence in Europe, the United Kingdom, the United States and Asia through the Company's subsidiary undertakings, joint ventures, associated undertakings and investments.
The Company was formed in 1984 as a subsidiary of Racal Electronics Plc, but was fully demerged from Racal Electronics Plc in September 1991, to become an independent company, and then changed its name to Vodafone Group Plc.
Vodafone Group Plc has completed a number of major business operations over the past five years, the most significant of which were the merger with AirTouch on 30 June 1999 and the acquisition of Mannesmann AG on 12 April 2000.
The Group presently operates in 28 countries, with almost all the Group's mobile subsidiaries operating principally under the brand name Vodafone; at 31 March 2002, the Group had approximately 101.1 million registered customers, and more than 229.1 million registered venture customers...
[...] We will also see later in this study, that the facts that managing cash flows and high margins are essential tasks for Vodafone, have leaded the group to focus on its core business, mobile telephony, to specialise in high value-added services, and to target dynamic markets, in order to continue enjoying high margins. PART II In order to understand fully the corporate strategies of companies at a given moment, it is very interesting to use theoretical frameworks. In the case of Vodafone, two frameworks are useful to analyse the group's strategic directions: Ansoff Matrix, and Porter's Generic Strategies. [...]
[...] We will see that these frameworks need to be combined to understand what is happening exactly at Vodafone, and what will happen. Indeed, we will see that Vodafone focuses on mobile telephony, and that at the same time the group develops its products and its markets. Vodafone focuses on its core business: mobile telephony Vodafone withdraws from non-strategic activities in order to increase its financial means The different acquisitions that the group made through its strategy of external growth included many other activities more or less related to its core activity. [...]
[...] Convergence of Telecommunications Products A convergence can be analysed between four industries that were previously distinct: telephone, mass media (print, broadcast and cable), consumer electronics, and computing (the new multimedia). This convergence is responsible for the birth of products that mix four components: customer devices (telephones, Pcs, televisions), networks (carry information from one place to another), network devices (process and store information for customers), and content (the electronic information and software that customers use). Therefore, because the telecommunications industry is becoming part of the information and multimedia industry, the competition between the main actors of the telecommunications industry is now being based on the connectivity, geographical coverage, and functionality of their products (Chan-Olmsted & Jamison April 2000). [...]
[...] The acquisition of UMTS licences in most European countries With the help of the important transfers of companies realised since the merger of Vodafone with Mannesmann, Vodafone raised the funds necessary to purchase UMTS licences in most European countries where the group is present, in spite of purchasing costs sometimes very high, like in the countries where the assignment of licences occurred through auctions, like in the United States and Germany (Table 8). Furthermore, parallel to this European positioning, Vodafone also acquired third generation licences in Japan and in the Pacific Zone in Australia and New Zealand (Vodafone Australia and Vodafone New Zealand). Moreover, the group is still applying for licences in Irland and Greece (Eircell and Panafon). Table Vodafone UMTS licenses Source: Eurostaf. [...]
[...] In this case, it may be better to adopt a focus strategy. Focus strategy involves selecting a particular buyer group, segment of the product line or geographic market as the basis for competition rather than the whole industry, and exploiting “narrow target differences from the balance of the industry” (Lynch 2000 p. 568). Indeed, this strategy is built around serving a particular target very well in order to achieve better results: strategy results on the premise that the firm is able to serve its narrow strategic target more effectively and efficiently than competitors who are competing more broadly” (Porter 1980 P.38). [...]
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