4/9/2013

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SANDHYA SHARMA SANKALP LALVANI SHALINI TRIPATHY SHIVIDH TIWARI SHINU CHANDRAN SHALINI KESHOTE SHAIVY SHARMA SHATABDA DHAR GUPTA SHASHANK GUPTA 12BSPHH010902 12BSPHH010907 12BSPHH010939 12BSPHH010978 12BSPHH010966 12BSPHH010936 12BSPHH010935 12BSPHH010956 12BSPHH010947

Introduction
Company Introduction: History of Vodafone Group:
In 1982 this company got the first mobile license in UK. Vodafone was formed in 1984 as subsidiary of Racal Electronics as a public company. In 1984 it was also incorporated as Racal Strategic Radio Limited. In 1988 Racal floated 20% of its share in London Stock Exchange as Racal Telecommunication PLC. In 1991 it became an independent company and also changed its name to Vodafone group. In between it merged with Air touch communication and changed its name to Vodafone Air touch Plc. It also formed Verizon Wireless merging with Bell Atlantic with 45% stake for Vodafone. Later on it again reverted back to Vodafone Group. Vodafone, based in the UK, was the world's largest mobile communications company by revenue. It operated under the brand name 'Vodafone'. The name VODAFONE comes from VOICE DATAFONE, reflecting the company's wish to provide voice and data services on the mobile phones. In 2000 Vodafone acquired Mannesmann AG which helped them to acquire business in Germany and Italy. This in turn increased their SFR. In 2006 Vodafone acquired Telsim, a Turkish company, for $2.6 billion. Vodafone India Limited and its telecom subsidiaries (Vodafone India Group or VI Group), headquartered in Mumbai is the second largest mobile network operator serving over 150 million customers in India with a presence in all 23 telecommunications circles. Vodafone has faced a string of problems since entering the Indian market in 2007, including a 2.3bn write-down - 25% of the business's value - due to rising spectrum costs, and a disputed $2.5bn tax bill from the Indian authorities. Vodafone has the second largest market share with 19.7% market structure. Total subscriber base is 153.71 million.

Figure 0-1: Market Structure of Vodafone PLC

Vodafone Enters India:

The motto of Vodafone to make a move in the Indian market was that the India is believed to be a good investment despite political uncertainty, bureaucratic hassles, shortages of power and infrastructural deficiencies. India represents a huge potential for overseas investment and is vigorously encouraging the entrance of foreign players into the market. No company, of any size, aspiring to be a global player can, for long ignores this country which is expected to become one of the top three emerging economies. Success in India depends on the correct estimation of the country's current potential, underestimation of its difficulty or overestimation of its possibilities can lead to failure. The consideration was given to the factor of the inherent difficulties and uncertainties of functioning in the Indian system. Entering India's marketplace requires a welldesigned plan backed by serious thought and careful research. India seems to be a great opportunity for long-term growth and fifth largest economy in the world, third largest in terms of GDP in the entire continent of Asia. It is the second largest among emerging nations. After completing the acquisition of Hutchison Essar in May 2007 and the company was formally renamed Vodafone Essar in July 2007, Vodafone was granted for good in Indias market place. Vodafone is a leading telecommunication company in India, by making customers uses their mobile communications and making their life more fulfilled; and by making mobile communications the primary means of personal communications. Vodafone aimed to help people find unlimited information, entertainment or assistance wherever they are.

Figure 0-2: Vodafone Financial Review

Over the past few years, they have worked hard to build a company which was capable of delivering innovative and compelling mobile services to all customers throughout the world.

Right now, they are introducing new mobile services that will make Vodafone an even more important part of customers' lives. On March 2011, Essar exercised a put option to sell its share in the company and exit the company for 5 billion dollar. This option helped Vodafone to boosts its position in the alliance. Vodafone would now own 75% of the total stake in the alliance. Currently Vodafone India has a revenue of $6.53 billion. Vodafone Indias (blended) ARPU (Average revenue per user) is currently Rs 196 from Rs 187 previous year. There has been a change in the definition of ARPU starting April 1, 2013 and the company notes that ARPU is now calculated by dividing mobile in-bundle customer revenue, mobile out-of-bundle customer revenue and mobile incoming revenue by the average number of customers. Postpaid ARPU was at Rs 786 while Prepaid ARPU increased to Rs 161.

PEST Analysis of Vodafone

PEST analysis is a strategic tool used to analyze external factors affecting the business and stands for political, economic social and technological factors.

Political: In India Foreign Direct Investment plays a major role affecting the foreign companies to retain full power in control. Currently FDI in telecom is 74%. Secondly there is a lack of transparency in spectrum allocation, one of the reasons for the huge 2G spectrum corruption to take place. Currently policies on Mobile Number Portability affect Vodafone by increasing the competition among the telecom players to retain its customer. Economic: Economic factors affecting Vodafone are mainly the growth of GDP and the level of inflation within markets where the company operates. Furthermore, global economic issues like the global financial crisis of 2007-2010 and any other external economic changes can be considered as an external economic factor. There is an increase in the per capita income among the people, people have more disposable income which the company can target to acquire. With falling mobile handset prices, more and more people can afford a mobile phone. This will give an opportunity to Vodafone to tap the growing mobile phone market. Social: Changing work patterns including work from home and relying on communication technologies, In addition to other issues such as people going green and ageing population in developed countries comprises a range of social factors affecting Vodafone. In India more and more youth population demand VAS & broadband technology on their fingertips. Even more and more towns getting converted to cities. This rapid urbanization provides a growth factor to Vodafone. Technological: The impact of technological factors on Vodafone is without any doubt due to the nature of the telecommunications industry. Specifically, a technological innovation in communications and emergence of alternative means of communication would force them either to form strategic alliances with companies or to commit to considerable amount of research and development in order to introduce innovative products and services to the market. Various technological advancement like 3G technology from 2G are fulfilling the growing needs of the internet service for the people. 3G also brings new value added service to customers like video calling. Though advancement of technology is pacing it is still not advanced as other countries like United States where they have introduced 4G technology which is still not available in India fully.

Micro Analysis

Market Introduction:
Financial year 2012 saw the continuance of healthy customer growth for the Indian telecom market which witnessed a 12.4% increase in its customer base during the 12-month period. The total telecom customer base in India stood at 951.3 Million, second only to China, with a teledensity of 78.7% as at end of March 2012. While wireline customers continue to de grow, the growth of the telecom sector was driven by the wireless segment. The wireless customer base crossed the 900 Mn mark with 919 Mn customers as at end of March 2012. This segment grew by 13% during the year, contributing to nearly 97% of the total telecom customer base. The telecom rural penetration at 39.2% at end of March 2012 offers huge growth potential in terms of both customers and usage. The uptake of broadband services has been abysmally low with nearly 13.8 Mn broadband customers as at end of March 2012 representing a broadband penetration of just over 1% offering a huge growth potential. The country is witnessing growing demand for data products & services, with the increasing penetration of edge enabled and 3G devices. The rollout of the wireless broadband using TD-LTE coupled with the expansion of 3G services is likely to provide an impetus to the broadband penetration, which is being increasingly seen as an integral driver of improved socioeconomic performance. This will trigger the next phase of growth of the telecom industry. New innovative applications, enhanced user experience and decreasing price of 3G & LTE enabled handsets would be the key drivers of the adoption of data services in India. Given the huge growth potential offered by the telecom industry through increased coverage and newer products & services, competition will remain intense with both existing and new players attempting to maximize their share of the growing telecom pie. Development in Regulation Telecom sector is one of the highly regulated sectors in India. Besides Department of Telecom (DoT), Telecom Regulatory Authority of India (TRAI) is the nodal authority, which regulates telecom services in India. During the previous year, the key regulatory developments were as follows: Recommendations on Telecom Infrastructure Policy TRAI submitted its recommendation on Telecom Infrastructure on April 13, 2011, as per which Telecom infrastructure should be treated as an essential infrastructure and DoT should bring the IP-1 under Unified License. Licence Amendment for Network Security On May 31, 2011, DoT made the License amendment and issued the network security guidelines wherein the telecom operators would be responsible for security of their network. Under the amendment, the service providers will be required to create facilities for monitoring intrusions/attacks/frauds within 12 months and report the same to licensor. Procedure for Activation of VAS Services

On July 4, 2011, TRAI released direction on procedure for activation of VAS services mandating telecom operators to obtain third Consent through SMS within 24 hrs from customer before charging the VAS otherwise the VAS has to be deactivated. Telecom Consumer Complaint Redressal & Consumer Protection On January 5, 2012, TRAI released The Telecom Consumers Complaint Redressal Regulations, 2012 by repealing the earlier The Telecom Consumers Protection and Redressal of Grievances Regulations, 2007. On January 6, 2012, TRAI released The Telecom Consumers Protection Regulations, 2012 as per which the vouchers offered by the telecom service providers have been simplified and standardized into 3 categories - Plan Voucher, Top-Up Voucher and Special Tariff Voucher (STV). It also mandates the telecom service provider to inform the prepaid consumer through SMS or USSD, about the deduction from his account after every call made or after every data usage session. Green Telecom DoT in January 2012 has accepted some recommendations of TRAI on Green Telecom dated April 12, 2011. These recommendations specify targets for minimum percentage of rural and urban towers to be powered by hybrid power (Renewable Energy Technologies (RET) + Grid power) by year 2015 and 2020. It also includes self declaration of the carbon footprint by the service providers of their network operations along with carbon emission reduction targets. These recommendations also require service providers to formulate a Carbon Credit Policy in line with carbon credit norms. Spectrum Management & Licensing Framework On February 15, 2012, DoT announced the Spectrum Management & Licensing Framework, as per which, all future licenses will be Unified Licenses and allocation of spectrum will be delinked from the license. Uniform license fees @ 8% for all telecom licenses and service areas will be made applicable in two yearly steps starting from 2012-13. It also allows for merger up to 35% market share of the resultant entity with requirement of TRAI recommendations for mergers beyond 35% market share, without breaching of 25% cap on GSM spectrum/10 MHz for CDMA spectrum holding. Recommendations on Unified Licensing On April 16, 2012, TRAI released its recommendations on guidelines to Unified license suggesting a onetime non-refundable Entry Fee for Unified Licence. It also suggests including IP-1 under Unified Licence. Recommendations on Auction of Spectrum On April 23, 2012, TRAI submitted its recommendation on auction of spectrum specifying the reserve price for various spectrum bands along with suggestion on the auction process, spectrum re-farming and spectrum usage charge amongst others. The Company along with other telecom players have made various representations to the Ministry and the DoT highlighting the adverse impact of these recommendations, particularly with reference to spectrum re-farming and the reserve prices, on the consumers, telecom industry and the nation as a whole. These recommendations, if accepted, will have a direct bearing of the profitability of the Indian Telecom industry by way of increased opex and capex.

PORTERS INDUSTRY ANALYSIS (5 forces)

1) THREAT OF NEW ENTRANTS: The threat of entry depends upon the presence of entry barriers. In telecom industry entry barriers is high due to following reasons: Capital intensive: Telecom Industry is a capital intensive industry, thus entry into this industry means that the firms needed access to huge amount of capital so as to cover the fixed costs to lay and maintain a physical network (exchanges, fiber optic cables etc) to the premises of customers. Regulatory policy: The Indian Telecom industry is broadly governed by the Department of Telecommunication (DoT) which administers the task of policy making, licensing, spectrum pricing and allocation. The recommendatory as well as regulatory functions are performed by the Telecom Regulatory Authority of India (TRAI). After the 2000 amendment, an adjudicatory body was setup by DoT, for the effective settlement of disputes arising in the Telecom industry. It is called as the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) Firms needed to get regulatory approval/licenses from the Telecom Regulatory Authority of India (TRAI), DoT. This is generally seen as costly and cumbersome process. Licence fee is high and has a high gestation period as approvals need to be taken from both TRAI and DoT. Product differentiation: Telecomm industry is basically ruled by some giants like Airtel, Vodafone, and Reliance Communication etc. Thus, handshaking with the angel investors and put their savings to start this business is risky. Moreover, providing superior products and that to at a lower cost is difficult. Skills requirement: Due to rapid change in technology, enhanced operating skills are required to handle the telecomm operations. More high managerial skills are need to have good operational efficiency. Thus due to high operating and managerial skills, entry in the telecomm industry low. Economies of scale that create intense competition is also barrier to entry keeping out the new entrants who cannot make the large investments or who cannot sustain for long period without earning profit. 2) THREAT OF SUBSTITUTES There are not many substitutes for the products developed by telecom companies. Mobile services are considered a strong substitute to wire-line services. Today Wire-line service market is considered to be diminishing market. Today, mobile network equipment forms a major part of telecom vendors portfolio. But, VOIP (Skype, Gtalk , Yahoo Messenger) is posing a threat to these companies.

3) RIVALRY AMONG EXISTING FIRMS Industry rivalry has become extremely intense with the emergence of new competing firms leading to price cuts across the industry. Rivals are now roughly equal in size and power and they cater to roughly the same customer base. They also produce nearly identical products. Thus best way to attract customers is by cutting prices. According to porter intense rivalry is related to the presence of various factors: Number of competitors: Competitors in telecom industry is very high. There are limited but major players competing against each other via spending on R&D and new product launches. Major player in the market are Reliance Communication Ltd. , Bharti Airtel Ltd. , BSNL, MTNL, Vodafone, TATA Communications , etc. Rate of industry growth: The Telecom industry of India has registered manifold growth in the recent years. The number of telephone subscriptions increased from 846.32 million to 951.34 million, registering a growth of 12.41 %. The wireless subscriber base increased by 107.58 million and the wire line subscriber base recorded a decline of 2.56 million. The wireless segment continued to dominate with a total base of 919.17 million connections. The overall telecom density in the country increased to 78.66 from 70.89. Both Public Players and Private Players are enhancing their technologies and taking the telecom industry to a much higher growth state. Not only service providers but also handset manufacturers are contributing significantly to the industry and economy of India. 4) BARGAINING POWER OF BUYERS With the increasing choice of several technologies and means of communication available and entrance of several new firms buyer power has been constantly increasing. The consumer now has access to several means of communication like email, instant messaging which are diminishing the importance voice services. These companies now buy in large volumes and equipment costs form a significant part of their expenditure (except the governments). Hence they involve in negotiating good bargains. Due to different product launches of similar nature by
different service providers , buyers has got buying power to switch from one product to another as the switching cost is also low.

5) BARGAINING POWER OF SUPPLIERS The analysis of supplier power typically focuses first on the relative size and on the concentration of suppliers relative to industry participants and second on the degree of differentiation in the inputs supplied. The ability to charge customers different prices in line with the differences in the value created for each of those buyers usually indicates that the market is characterized by high supplier power and at the same time by low buyer power. Due to limited number of suppliers as BSNL is one of the major supplier in Indian Telecom sector as it provides link to the company. Also the shared tower infrastructure also helped to lower the infrastructure cost. The cost of switching from hardware to hardware is also medium.

Opportunities:
Following are the opportunities for Vodafone: 1. Growth of mobile advertising 2. Increasing 3G penetration 3. Focus on M2M solutions 4. Mobile money transfer services market 5. Growth in the Buying Power of People 6. Reduction in Mobile Handset prices 7. Growing demand of the youth population in India for Broadband and VAS.

Growth of mobile advertising The mobile advertising market is forecast to record strong growth in coming years. With mobile phone becoming the center of the digital convergence, advertising on mobiles will be a major growth area of growth for telecom players. According to the industry sources, the global mobile advertising market is expected to grow at a compounded annual growth rate (CAGR) of about 40% until 2014. The growth is primarily due to the increasing mobile phone users and evolving mobile platforms. Vodafone has been focusing on mobile advertising in recent times. In 2009, the group completes roll out of mobile advertising services to its 18 operating markets. In the previous year, Vodafone Marketing Solutions had run over 2000 campaigns across its global footprint for hundreds of global brands. Growth of mobile advertising will increase the groups revenue in coming years. Increasing 3G penetration The demand for third generation (3G) services is expected to increase with the growing need for advanced data and video services. The 3G technology allows services providers to provide a host of services including high speed mobile broadband, mobile TV, and mobile VoD, among others. As the traditional voice revenues of mobile operators are being hit by changing tariffs, increasing competition and alternative technology, among other factors, operators are migrating to 3G services to facilitate stable or increasing average revenue per user (ARPU). The 3G penetration in Asia-Pacific is expected to reach 40% 2014. In India there has been a growth in 3G customers from 3.3 million to 3.7 million almost an increase of 12.1%. Vodafone secured 2x5 MHz of 3G spectrum in nine circles in the Indian auction for a total price of 1.74 billion ($2.8 billion) in May 2010. Increasing adoption of 3G will contribute to the group's revenue growth in coming years. Focus on M2M solutions Using M2M technology to develop solutions that enable machines to connect with each other, and to integrate several functions and operations for one seamless system, we help organisations in dramatically improving efficiency, significantly reduce operation and maintenance cost, better asset management, increased service speed and create new revenue streams. Our location tracker solution, which uses M2M technology, is helping one of the beverage leaders to track assets online and to monitor the deliveries, resulting in enhanced business efficiency. Utilised by many Vodafone customers, Smart Metering, is another innovative solution that allows energy and utilities companies to efficiently collect meter data and provide two-way communication for their

residential, commercial and industrial customers. Smart Metering also provides a way to offer increasingly personalised services and reduce pollution and carbon emissions. Using M2M communication, one of the state municipal corporations is monitoring and controlling water levels in reservoirs and tanks, which help in reducing water pilferage, wastage and leakages with timely preventive actions. Another Vodafone customer is using M2M technology for remotely controlling street lights which helps in energy consumption and reducing operation costs. At Vodafone, we are committed to identifying and developing solutions that enable the companies to deliver better to its customers needs. Mobile money transfer services market Vodafone India, along with ICICI Bank, Wednesday launched its mobile money transfer and payment service 'M-Pesa' here. It plans to roll out this service in Mumbai and Lucknow in the next couple of days. This service helps the unbanked and under-banked sections of the population gain access to financial services through the mobile phone. Today, less than 5 percent of villages in India have a banking outlet. Financial inclusion is a national priority and we believe that with M-Pesa, we now have the ideal offering to facilitate the same across the country in compliance with all applicable regulations, Suresh Sethi, Business Head - M-Pesa, Vodafone India said. This service will now be available through 1,400 specially trained authorized agents and across 130 Vodafone exclusive retail stores in Delhi and NCR region. The service enables customers to transfer money to any mobile phone, remit money to a bank account, make payments for utility bills and deposit and withdraw cash from designated outlets by registering themselves for the service. (IANS)

Threats:
Following are the Threats to Vodafone: 1. Intense competition 2. Regulatory environment 3. Declining PAT margins 4. Mature Market

Intense competition The group operates in the highly competitive and rapidly changing technology-based telecommunications industry. The focus of competition in many of its markets continues to shift from customer acquisition to customer retention as the market for mobile telecommunications has become increasingly penetrated. Regulatory environment Vodafone being a global company, must comply with an extensive range of laws and regulations. These requirements regulate and supervise the licensing, construction and operation of the groups telecommunications networks and services. In particular, there are agencies which

regulate and supervise the allocation of frequency spectrum and which monitor and enforce regulation and competition laws, which apply to the mobile telecommunications industry. Decisions by regulators regarding the granting, amendment or renewal of licenses, may adversely affect the groups future operations in these geographic areas. In addition, decisions by regulators and new legislation, such as those relating to international roaming charges and call termination rates, will affect the pricing for the services Vodafone offers. Further, industry regulators continue to impose lower mobile termination rates and lower roaming prices. Termination fees and roaming charges accounted for 17% of the groups revenue in FY2010. Changes in the regulatory environment may adversely affect the groups business prospects or results of operations. Declining PAT margins: PAT margins of Vodafone have declined from 17% in FY2007 to 0.01% in FY 2011. In the year 2010 it even became negative. One of the main reasons for declining PAT margins is rise in inflation which increases the cost burden among the customers. Rise in network expense for Vodafone has increased from 12% in FY2007 to 24% in FY2011. There has also been an increase in license fees and spectrum fees from 6 to 10 % and 3 to 8% respectively. Deterioration of operating parameters due to hyper-competition and interest payments associated with high levels of indebtedness have severely impacted the net profit margins of Vodafone. Another major contributing factor to declining PAT (Profit after Tax) margins is the high cost of debt. Interest rates are high in India and have been trending up over the recent past. Since telecom has not been granted the status of an infrastructure industry, operators cannot avail themselves to debt at favorable rates of interest available to other infrastructure players such as roads and ports. Matured market The high penetrations in the market indicate saturation of the markets eliminating any chance of significant growth in the future through new subscribers. The high penetration rates in these markets signify weak prospects for the group to report growth, making it dependent on differentiation and value added services for future growth. Mature markets may affect the groups revenue growth and profitability in coming years. Low values of RoCE and PAT margin coupled with high debt levels do not augur well for the industry. It is highly likely that Vodafone will curtail their expansion plans as they will not be confident about recovering their investments in light of the currently poor performance.

BCG MATRIX
Introduction
The growth-share matrix (aka the product portfolio, BCG-matrix, Boston matrix, Boston Consulting Group analysis, portfolio diagram) is a chart that had been created by Bruce D. Henderson for the Boston Consulting Group in 1970 to help corporations with analyzing their business units or product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis.

To use the chart, analysts plot a scatter graph to rank the business units (or products) on the basis of their relative market shares and growth rates.

Cash cows are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth. Dogs, more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the

business's market share. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company. They depress a profitable company's return on assets ratio, used by many investors to judge how well a company is being managed. Dogs, it is thought, should be sold off. Question marks (also known as problem children) are business operating in a high market growth, but having a low market share. They are a starting point for most businesses. Question marks have a potential to gain market share and become stars, and eventually cash cows when market growth slows. If question marks do not succeed in becoming a market leader, then after perhaps years of cash consumption, they will degenerate into dogs when market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share. Stars are units with a high market share in a fast-growing industry. They are successful question marks and become a market leader in a high growth sector. The hope is that stars become next cash cows. Stars require high funding to fight competitions and maintain a growth rate. When growth slows, if they have been able to maintain their category leadership stars become cash cows, else they become dogs due to low relative market share.

BCG Matrix for VODAFONE

Recommendation:
Marketing Strategy:

From the studies, we can incur that Vodafone currently have a weak marketing strategy, mostly in terms of its advertising. Based on generational marketing theory and the demographics which Vodafone target as its main customers, the recommendation is that they invest in a celebrity endorsed campaign. This will fit in with Vodafone's motto 'Power to you!' which will be enhanced by a global persona advertising their services, in addition to making their own brand handsets better known. This however will counteract with their aim of remaining simple in their operations. Potential risks to this can be that financial resources can be wasted in an unsuccessful campaign, risks of celebrity scandals or choice of the wrong celebrity that does not fit in with the company's image. Health and Safety RJVs :

Research Joint Ventures with associations such as Cancer Research and other independent associations to join knowledge for R&D in safer handsets. Vodafone uses part of its resources for the Vodafone Foundation, therefore a proportion can be used in such RJVs as it enhances brand image, it fits in with the sociological factors of the external analysis and by doing so they would implement a global strategy which recognizes the significance of local concerns and cultural and legal requirements. This will further enhance the group's corporate social responsibility. Potential risks could be that it could be perceived as Vodafone admitting to the link of mobile phones and cancer and instead damage the brand image. BoP Strategy in emerging markets:

The recommendation is that Vodafone implement a Bottom of the Pyramid strategy by providing an internet-based phone service with advanced Wi-Fi technology so that rural areas in developing countries can be connected. This fits the vision of 'Keeping people better connected'. This way Vodafone can use their own-brand, low cost smart phones. This strategy could lower the investment required, lower operating costs and would increase the number of users. This strategy can be implemented by providing solar panels to provide the WiFi networks and offer a chance to make the mobile build out 'green', which also fits in with Vodafone's sustainability goals. Potential risks are large amounts spent in the network build-up with low revenue as a result. Also it is very safe to say that Vodafone are one of the more important players in the mobile telephony industry. However, there are still areas in which they can improve and strategies which they can implement to further increase their revenue; enhance their brand and public image and further launch and make their own-brand handsets a threat to their competition. It is clear from the analysis that even though Vodafone are technologically forward in terms of the services they provide, they however lack innovation in their handset manufacturing. By implementing the above recommendations there is potential for them to promote their hand-sets and become more competitive overall.

VODAFONES FUTURE STRATEGY

Future strategy for Vodafone' would be to get "efficient pipes", i.e. a broadband network that's cost effective in different channels like in the radio, transport, primary elements, "smart pipes" as retail/wholesale services, and top-level products for the consumer segment.

In-depth analysis of strategies of Vodafone

We provide an in-depth business; strategic analysis of Vodafone Group Plc, a comprehensive insight into the company, including strategy formulation, strategy planning, strategy evaluation and selection as well as strategy implementation. This will involve in investigating the organizations external environment, to identify Opportunities and threats it might face, and its strategic capacity, capabilities to isolate key strengths and weakness as well as indentify the significant of significant of the stakeholder analysis and environment and organizational audit Vodafone offers a wide range Products/Services, such as Voice Services Social Products Messaging Services Vodafone live Vodafone live! With 3G USB modems Vodafone Mobile Connect Data Cards Roaming Services Other Business Services

VODAFONES BUSINESS STRATEGY

Vodafone's present/future business strategy will be to grow through geographic expansion, acquisition of new customers, retention of existing customers and increasing usage through innovations in technology. This is proving a very successful strategy, as is evident from Vodafone's past success in India. Vodafone business strategy as well as sustainability strategy are inseparable. By meeting societys needs will definitly create a great opportunity to grow business. Vodafone strategy to identify and focus on the areas where they can address sustainability challenges in the most effective way and also offer an attractive commercial return for their shareholders.

Expanding business strategy in emerging countries like India is providing accessibility to communications and the socio-economic benefits. Stake Holder Analysis Stakeholder Analysis will help to identify the key people who have to be won over. To analyse key stakeholders, an assessment of their interests and find out ways in which these interests affect the project and its viability. Importance of Stakeholder Holder Analysis Stakeholder Holder Analysis is very important to any company. Importance of Stakeholder Holder Analysis of Vodafone PLC. 1. Vodafone PLC can leverage the opinions of its very powerful stakeholders to modify companies projects at an early stage. This makes more likely that they will support to organization, their input can also improve the quality of Vodafone future. 2. Gaining support from most powerful stakeholders can help Vodafone to gain more resources. This will benefit Vodafone to make projects more successful. 3. With early communicating with stakeholders, company can ensure that they know what company is doing and fully understand the benefits of companys project .this means they can support companies actively when necessary. 4 Vodafone PLC can anticipate what people's reaction to companies future project may be, and build into companies plan the actions that will win people's support 5. draws out the interests of stakeholders in relation to the problems which the Vodafones future plans which seeking to address. 6. Vodafone cans identifies conflicts of interest and potential conflict 7. Helps provide an overall picture 8. Helps identify relationships between different stakeholders - helps possible coalition.

STRATEGIC OPTIONS
Depending on the strengths and weaknesses, the following strategic options and the recommedations mentioned can be given.

Strengths:
Strong international presence and brand recognition. The kind of subscriber base it has in the Indian market. It has the 2nd highest market share in India. It has a 2nd highest subscriber base in India, first being Airtel. Its strong advertising strategies and impact on people. Its Indias 3rd biggest mobile carrier(source: Business standard) Excellent Network Coverage

Weakness:
Uncertainty in revenue growth in the HSDPA network based on historically slow consumer market take-up of 3G data services Very less R&D High customer churn (33.33%) Rural India unable to relate to the brand

OPTIONS FOR VODAFONE

Strategy Evaluation and Selection: Few of the options, we have come up is: Strategic Option A: Focusing for Diversification Vodafone entering into Electronic equipment Market This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience. Vodafone PLC can enter into electronic equipment market by using diversification strategy and produce Vodafone Television, Vodafone Microwaves, Vodafone Washing machine etc. Strategic Option B: Merger and Acquisition - Vodafone and HTC Mobile

Merger and Acquisition - Vodafone and Micromax

Evaluations of Selected Options:

Suitability

B
Yes

Does the strategy address the circumstances in which the organisation is Yes operating?

Is the strategy viable?

Yes

Yes

Does the strategy exploit core competences? Does the strategy address the external environment?

Yes

Yes

Yes Is the strategy viable and achievable given conditions within environment? Yes Does the strategy build upon or exploit the strategic capabilities of the Yes organisation? Does the strategy fit with the current corporate culture of the organisation? Yes Does the strategy create/maintain competitive advantage? Yes

Yes

Yes

Yes

Yes

Yes

Acceptability

SHAREHOLDERS

Does the strategy provide adequate financial returns?

Yes

Yes

Does the strategy lead to unacceptable risk?

No

Yes

Will there be issues at social responsibility?

No

Yes

MANAGEMENT

Will the Management support the strategy?

Yes

Yes

Will they leave they leave the organization?

No

Yes

STAFF Will there be strike or turnover due to implementing new strategy? No Will they support to the implementing the Strategy? Yes Does the strategy have impact over there salary? Yes Does the strategy have impact over job security? No CUSTOMERS Yes Yes Yes Yes

Will they use our new services? Yes Will it satisfy their needs? Yes Will it answer their complaints? Yes Yes Yes Yes

SUPPLIERS

Will the suppliers support to the strategy? Yes Will the change there product, Process and location To support our Yes strategy? Do we can make guarantee on financial security after implementing new Yes strategy? NATIONAL GOVERNMENT Yes

Yes

Yes

Will be misfit with the law? No Will these violating policy of the government? No Will government provide support for us? Yes PRESSURE GROUP Yes No No

Will it be damaging Outcry? Yes Does it go far enough to satisfy three complaints? No FEASIBILITY No Yes

Does the organisation have the resources and capabilities to deliver the Yes strategy Does Vodafone has previous experience in similar strategy? Yes

Yes

Yes

Strategic Decision and Recommendation

When evaluating the mentioned options, option A would be most favorable option over option B. Vodafone entering into Electronic equipment Market Vodafone PLC can enter into electronic equipment market by using diversification strategy. Vodafone can produce Vodafone Television, Vodafone Microwaves, Vodafone Washing machine etc. Diversification is the name given to the growth strategy where a business markets new products in new markets. This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience. Option A would fit to addresses the challenges of the external environment, is based upon or enhances the resources and capabilities of the organisation, builds or exploits synergies and is consistent with its corporate culture. This strategy complies with consideration of the anticipated rewards relative to the goals of the organisation. In addition, expectations of its key stakeholder groups. Anticipated rewards of option A will achieve possible returns relative to the risks incurred. Proposal for Vodafone Entering into Electronic Equipment Market This proposal is prepare to evaluate whether this strategy is success or not. After identify external and internal factors affecting, Vodafone PLC has to decide whether all the selected strategy is financially viable and ability of meeting the selected target as well as it within the budget and time frame. Target for Vodafone entering into Electronic equipment Market Introduce new product to existing customers and new customers by 10% within next six month. Improve frequency of purchase of Vodafone entering into Electronic equipment by 10% within each year. Re-position using the marketing mix. Increase Impulse segment by 25% within 12 month.

Conclusion & Recommendation

In a nut shell, the report examined Vodafone entering into Electronic Equipment Market. The report provided comprehensive insight into the company, including strategy formulation, strategy planning, strategy evaluation and selection as well as strategy implementation. This will involve in investigating the organizations external environment, to identify Opportunities and threats it

might face, and its strategic capacity, capabilities to isolate key strengths and weakness as well as indentify the significant of significant of the stakeholder analysis and environment and organizational audit Business strategy plan is based on various business analysis techniques including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats), PEST analysis (Political, Economic, Social, and Technological), Marketing plan is based on SOSTAC framework. All activities integrated to achieve pre-established strategic objectives. External and internal forces have been evaluated by using SWOT analysis and PEST analysis model. Vodafone PLC could use its strong brand position. As financial aspect concerns NPV is positive, therefore based on financial points this strategy for into Electronic Equipment Market. The strategy is viable. But we need to take into account of non financial factors as well. Vodafone has to develop strong Marketing strategy when into Electronic Equipment Market .finally all These performances must be in line with bonus scheme to motivate employee.

OTHER OPTIONS FOR VODAFONE VODAFONE Business Solutions, a specialist business unit within Vodafone has launched a unified communication portfolio aimed at increasing the productivity of businesses. The services of the new portfolio includes a Vodafone hosted Virtual PBX for business, hosted Audio and Visual Conferencing Solutions, Vodafone Broadband Telephony for Business enterprise, and an Information Technology (IT) managed security product. Hence it can take these services to India as well. According to the Head of Vodafone Business Solutions, the introduction of these services was facilitated by the feedback gained from clients with the surging use of data by businesses. He added that, as the use of data became robust, it offeredvarious new opportunities for businesses to get on and experience new services and products. Vodafone Business Solutions, he ellaborated, was thus committed to using new services to improve productivity and infrastructure for people who are dedicated to the business market and are relevant for the business future prospects. At the 3rd Information Technology, Managers Forum organised by Vodafone Business Solutions, the Chief Executive Officer of Vodafone ,who addressed the forum through the Video Conferencing Service said that the service offered a platform for people to communicate through different means globally.The video conference, he also stated, was to provide a straightforward medium for people to meet the numerous demands of their clients, who would be expected to have the broadband connectivity.

He said the quality of the service was excellent, and also pledged Vodafones commitment to continue investing in providing better services and products for their customers worldwide. Presenting an overview of the newly introduced services, the Head, Product and Propositions of Vodafone Business Solutions, stated that the feedback from clients which indicated that mobility was becoming more and more important from the productivity point of view. Hence, it facilitated the launch of the service. He said businesses were faced with various challenges in their operations which the service had come up to resolve, offering them a platform to increase productivity, collaboration, be cost efficient and offer a simplified user experience for businesses facing numerous challenges. Vodafone Business Solutions, he ellaborated was empowering people to be highly productive through the freedom to choose when, where and how they wanted to work. He ellaborated that Vodafone hosted Virtual PBX for Businesses, was a PBX based convergence communications service that allowed its users to combine fixed and mobile telephony into a single unified platform for managing and receiving calls. He said the services also allowed its subscribers to ensure that they never missed a call and benefitted from features such as a single auto attendant, extension dialing and the single web portal for managing all devices. He also mentioned that with the new Virtual PBX complete product, most companies would save between 40 and 80 per cent on monthly phone costs, while various consumers would be able to save money as there were no costs incurred for the PBX hardware or software, no hardware maintenance or support fees was charged and no hardware upgrade or enhancement costs among other benefits. Accordingly, the Audio and Video Conferencing Solution services allowed the dispersed teams, located anywhere globally, to work together and exchange information easily as if they were in the same place.The conferencing solutions would reduce the unnecessary travel and reduce unnecessary cost, conduct more training sessions frequently and reach a wider audience as well as improve the ability of businesses to foster partnerships. The Vodafone telephony gives businesses the ability and facility to connect existing analogue devices to the systems and host communication services that integrates all corporate communications globally.