Opportunity Analysis for Vodafone US Inc Assignment Help1.0 Introduction and Company Background
The purpose of this assessment task is for you to reposition a current brand or industry in the marketplace. The brand and industry selected are ones which illustrate the need for repositioning i.e., a decline in sales, customer base, change in consumer tastes, rising costs etc.
Vodafone US Inc is the company selected for situational analysis and for in-depth Micro and Macro analysis of the company. Telecommunications industry is the most critical and expanding market at present on global arena and also Vodafone having global presence and high reputation for its brand value is a right company to select for a comprehensive study of its pros and cons. United States being a country with several telecommunication giants, offering stiff competition for Vodafone for establishing there. Its previous ventures with Verizon got closed and Vodafone need to take up innovative strategies to lead the telecommunication market in United States. Vodafone situational analysis can be a stimulating and challenging exercise to position a strong global company in a new market with several competitors. The current case is selected for the same reason
1.2 Company Background
Vodafone is the third largest telecom company in terms of the total number of subscribers and as well in terms of the total revenues for the company. The company has started journey full of ups and downs from the day it was incepted. As of now the group has presence in about 30 countries and also it has partnerships in more than 20 countries more(Ang,2016).
Vodafone is established on very low profile in Berkshire in United Kingdom. In 1984, the Racal Electronics Plc and Millicom Inc combined together to form Vodafone (Kumar, 2019). Subsequently in few years, the ownership structures and the names of the company have changed several times to make it as Vodafone Group Plc in the year 1991. In the next decade, the company acquired few companies and expanded its business in United Kingdom (Kumar, 2019) and by 1997, the company rebranded itself with speech logo which became its hallmark subsequently (Beale, 2017). There is increased mergers and expansion thereafter for the company to establish in several countries thereafter (Kumar.2019).
2.0 Situation Analysis
2.1 Market Analysis
United States of America with numerous states and with conglomerate of consumers from different regions, business interests and profiles makes up a great market for telecommunications. As it has become inevitable need for any stakeholder in the country, the market capability is enormous and every year millions of new customers are reaching out for telecommunications, mobile, data, voice and internet services. Inspite of the fact that all leading players of the country like AT&T, Verizon, Comcast having multi-million customers, new consumers are evolving on daily basis and the market has potential to generate new customers and they are evolving too. New emerging markets like rural regions offering good market for new customer generation all the time. As of 2017, the total revenues are about $317billion in the country. The compound annual rate of change (CARC) of the company is -0.7% between 2013 and 2017. Market consumption volume has increased by about 3% between 2013 to 2017. The total number of users is about 544 million by 2017. Prices are at present are in the lowering trend due to diminishing value trend and it is mainly due to the lowered production costs (Stone, 2015). The competition is too fierce and there are good prospects for any company to gain market in the country (Sapolsky et al., 2018).
2.2 Macro Environment Analysis/External factors/PESTLE
Political, Legal and Economic Analysis
? When compared with several other countries in the world like emerging African markets and Asian markets, United States of America offers a definite and stable political market. Further the market is quite friendlier to the FDIs and international brands. However still there is always risk for the foreign companies, as the changes in the political parties and the presidential ships can results in protectionistic policies and subsequent hikes in the taxations and the tariffs on the company. In any case, still United States is a potential market worth relying on.
? As such the legal obstructions are not there for the business much, Vodafone is always compliant with the legal obligations and it is always committed for fair business. However still the wireless business is vulnerable to anti-trust laws and legal complications like minimum wages and job regulations always there (Van De Kaa et al., 2017).
? Economic conditions of United States are favourable for business in wireless technologies and related business domains. There is economy growth being seen in all sectors of the country. Unemployment rate is declining and the consumer spending capabilities are growing in the recent years. All this paves way for Vodafone to take up innovative business offers and promotions which can lead to better revenues and business in future.
? In recent years, there is increased reliance on communications by almost all demographics of the people in general. There is wide spread usage of internet and related technologies. People from all walks of life are now using mobile phone and related technologies. This is a good sign and as new customers are increasing, Vodafone can work on to tap and explore new markets in the country.
? Changed lifestyles and the more mobile lifestyles and inevitable separation from the family members due to education and employment reasons is making people depend on the mobile technologies and people are using mobile services at an increased rate. All this contributing to the increase in the market growth rate of Vodafone.
? Technology has considerable impact on the Vodafone and similar wireless communication technology companies. Advances in technology need to be embraced by Vodafone from time to time before its competitors. If not tapped in right time, there is always chance to lose the competitive advantage. Hence it is mandatory for wireless communication technologies to be updated for business advantage for Vodafone.
2.3 Micro Environment Analysis/CCC factors
2.3.1 Company Analysis
Vodafone pros (Positive points):
? Good coverage and quality of communication is good
? There is decent number of good promotion schemes existing for the brand.
? Vodafone is good in updating its technology features and profile.
Vodafone Cons (Negative points)
? Pricing is not competitive in some of the regions in the country
? Competitor networks are increasing at alarming rate.
? Vodafone experiencing criticism for outsourcing some of its support services in United States.
Vodafone US Inc taken share of about 50% of the total Verizon communications of United State, later its share is sold for about 130 billion in 2013. Later in 2014, the company announced an agreement with T-mobile to launch a mobile virtual network operator (MNO) service using its own network.
2.3.2 Competitor Analysis
AT &T is another potential competitor for Verizon; It is the world's largest telecommunication services company and the second largest in mobile tele services. It is a subsidiary of Bell Telephony Company in 1880. The company is headquartered in New Jersey. The company has about 34% of the market share. It has about 120.6 million wireless subscribers. The network does cater to about 16.5 million broad band customers every year. AT&T has recorded about 13 billions of income and registered about 190 millions of customers at present (Coll, 2017).
Verizon is fierce competitor for Vodafone in United States markets. The company has exceptional brand value and service recognition and most of the corporate clients do rely on the Verizon communication company services. Verizon has data, mobile telephony and fibre networks. Verizon is head quartered in Texas. Recently Verizon recorded about 13 billions of income and about 130 millions of customers (Kumar, 2019).
Comcast is another important company in United States with about 9 billions of income and with about 20 billions of revenues every year (Bourgeois et al., 2017). The company has about 60 millions of customers in the market. Charter communications recorded about 4 billion of revenue in recent years and with customer data base of about 26 millions. T-Mobile has about 1.5 billion income and recorded about 72 million customers in the recent years. Each of these companies does have potential capabilities to curb the growth of Vodafone in the country.
The competition from these competitors is from several decades to few years like in the case of frontier communications. In any case, the duration of the stay in the market is not a big deal, rather the aggressive marketing and promotional schemes being taken up by the company and the market shares they are grabbing are more serious concerns for Vodafone in United States. The competition from the big players like AT&T, Verizon, Comcast is really fierce. It is moderate and intense from other companies in the regions where they are strong. For example Frontier communications is a key player in rural set-ups in the country.
Other miscellaneous players are many. Century link is the third largest in United States and operating as exchange carrier as well as internet provider in the country. It is also a internet fibre optics based TV broadcasting company in the country. The company has good network in more than 35 states and also has considerable presence both in corporate as well as in rural areas. Consolidated communications is head quartered in Illinois and is one of the major competitors in wireless communication business in the country. The company is providing services in data, communication, internet, voice etc and has presence at present in more than 23 states in the country. Frontier communications is another key competitor in telecommunication services in the country. It is mainly a key player in the rural regions of the country. As of now in more than 29 states the company is operational. Though the company stamped its mark in rural and village regions in the starting times, it has now established its presence in several big metros in the country. The competition is not intense in this industry sectors and is both from the established as well as new entrants into the industry. Disruption by promotional schemes and product diversity makes up the key element of competition for Vodafone. Vodafone lacks the necessary infrastructure like other companies and its venture with Verizon communications is turned off in 2013. However still the company has all the necessary competitive advantage in terms of capabilities and potential expertise gained by its international operations and presence in several countries in its legacy of progression in the last few years.
Other miscellaneous competitors include Century link, consolidated communications and Frontier communications Etc.
2.3.3 Consumer Analysis
Vodafone US Inc has all categories of customers in the country. It has normal house hold customers, corporate customers. There is no differentiation in market based on age, gender, socio-economic status, ethnicities etc. All citizens of the nations are equally motivated to take up the market. However the key difference exists in the form of unawareness of the product. In the regions where there is no much awareness of the brand, the overall brand sales and consumers are less. In the regions where there is sufficient advertisement and outreach existing, the brand sales are reasonably good.
• Describe the most pertinent segmentation dimensions for your market (e.g., demographics, behaviours, geographic regions, purchase habits, resistance to change, adopter categories (i.e., innovators, early adopters etc.), familiarity with access to technology etc.
2.3.4 SWOT Analysis
- Vodafone is the most popular cellular service across the world.
- Vodafone has about 100,000+ Employees in total
- Company already established in diverse range of services including land phone, mobile phony as well as digital TV services.
- High brand image and brand visibility.
- Brand recall for Vodafone is also quite good.
- Vodafone advertisements are quite successful in outreaching the audience.
- More than 470 million customer data base is enviable achievement for Vodafone.
- Vodafone presence is spanned to about 150+ countries at present.
- Customer friendly services like online apps, payment options make the service very convenient.
- There are several services like music, entertainment through Vodafone apps available to its customers
- Websites of Vodafone are well designed and efficient and they render services like easy online recharge, payment etc in less time.
- Since Vodafone is a global brand and is operating across the borders in several countries, always there is serious threat for the company to compel with range of regulations and norms imposed by regulatory authorities from time to time.
- Competition in this market is quite high and always Vodafone requires to face intense price wars to compete with the competitors in the market.
- Mobile number portability is a big advantage for the company to tap the competitor customers into its own markets.
- Vodafone has large potential to spread into the rural markets of the world.
- Low cost technology of Vodafone can be a big plus for the company to gain enormous market shares across the world.
- New entrants entering into the market with low price margins are seriously affecting Vodafone current customer data base.
- As the saturation point for new customer entry into the company is getting reached out, the competitive advantage can be gained only by service differentiation, which can be a tough task.
- MNP is being offered by competitors as well, which can reduce the subscriber data base of Vodafone substantially.
3.1 Marketing Objectives
? SMART Objectives.
- Brand awareness improving in the new market segments, more particularly in the emerging markets of unexplored rural areas of the nation. Working out to improve brand awareness by about 50%. Mostly it is required to be in the form of advertisements and door to door marketing.
- To improve the sales of the products drastically. To work on to improve the sales of the current product sales by about 50% from the current total sales figures. This is expected to happen in all of its products like mobiles, landlines, DTH services etc.
Brand awareness is directly related to the brand sales and hence they are interlinked. If brand promotion is achieved, naturally it will impact the overall sales of the brand. Considering the current competitive scenario as well considering the emerging new markets from the rural and unexplored regions of the world, any attempt to improve the brand awareness will work on to improve market share in these regions. Further new promotional policies and the brand promotion in the existing markets can work on to improve the overall market share in the existing markets by about 5%. This is also inevitable to sustain the current competitive edge and position in the market. Hence Vodafone US Inc needs to focus on these aspects.
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