Vodafone case summary
As an international company, Vodafone has unique ways of meeting consumer demands in all social-economical settlings where it has hugely invested in. Some of the distinctive properties that Vodafone has over other competing companies include the customer admiration gained over its business services. Secondly is the customer’s trust it has achieved due to the special responsibilities meant to enhance its reputation and lastly is by building customers’ loyalty. Vodafone sustainable way of doing business has enabled them to gain long-term commercial remunerations by linking business strategies with corporate responsibilities.
Vodafone has provided product expansions among its dealers by incorporating new or advanced features and services especially in already advanced countries such as the UK, USA, and Europe where sophistication meets a market that is already saturated with sophisticated users or competitors. (The Times Newspaper Ltd, 1)
Issues discussed in the case study
The study case discusses issues regarding technology where the Third generation (3G) technology has improved data and voice transfer via internet due to efficient transfer speeds. It also has other extended services such as mobile downloads, mobile television, e-mail messaging and video conferencing.
Vodafone has experienced rapid expansion as it search for emerging market opportunities especially in developing countries. It has also incorporated other services such as the e-banking which is evident in some developing countries like Kenya where “safaricom”, a partner of Vodafone provides the “M-pesa” services which literally means “mobile money”.
According to the Times Newspaper report, (2) this is a trend which indicates that Vodafone is committed to finding emerging market opportunities especially in the developing countries. It is devoted to the new markets where they provide new technologies to keep them in touch with the latest trends in the market. This is a great boost to social-economic development especially in developing countries. For the developed countries, Vodafone relies on the variety of innovations so as to be distinctive in the market and meet the already sophisticated clientele.
Recommendations applicable to Qatar social-economic markets
In relation to Ali and Partners, the creation of the “Gulf Cooperation Council (GCC)”, among six Gulf States namely “Kuwait, Bahrain, Qatar, Oman, Yumen and Saudi Arabia” has promoted drastic changes in support of the installation of the digital systems by overseeing the installation of the fibre-optic network cables to link them. The most challenging task involves the laws. Telecommunication industries especially the international companies are not able to venture into such countries due to the tough control measures the governments had subjected to the sector.
Ali and Fagan indicate that the biggest challenge facing Kuwait is the monopolization that has been granted by the government. Every public telecommunication company is under tight supervision by the Ministry of Communication and this is a gag to the industrial development. Privatization of the companies would open up chances for free competition and thus lower cost for the consumer as well as encourage the much required investment in the area.
According to Fagan (2), Qatar has been a country in the Middle East without any rule or regulation to govern the use of the voice over internet protocol. The telecommunications regulatory authorities of Qatar also need to enhance competition by promoting the investments by various international companies such as Vodafone. This would improve and meet the countries need for transfer of information.
Information is the key to understanding or discussing matters to solve conflicts. Good communication can only be enhanced if the government is in position of controlling the frequency spectrum in accordance with the regulations or internationally recommended practices. The harmonized spectrum allocates international service providers such as mobile service renders with the frequency bands. These bands need to be in line with the international approvals so as to speed up the industrial growth consistently.
These are some of the policies that would enable countries in the Middle East to meet similar markets oriented to focus on customer services and customer’s demands regardless of the innovations and social differences involved just like many other countries all over the world.
Fagan recommends the telecommunication sector reforms which entails attracting the investors and also having administration practices which promote commitment to already competitive markets aligned with the international practices.
The service Vodafone provides would meet the urgent consumer demands such as the voice over data coverage, provision of hardware and software which meet various special needs and social status of the customers. These are places that need new innovations in technology for instance sharing of videos, music, or images through mobile phones. The mobile banking has already advanced and Vodafone is updating such services to some Middle East countries. (Porter, 3)
How Vodafone can apply Michael Porter five forces analysis
According to Porter, (3) the Porte’s five forces “model of pure competition”, less risky rate of return ought to be constant across firms and industries. Numerous researches have indicated this as impossible because of the differences in the levels of profitability. In line with the porter’s model (3), “the industry is governed by five forces namely the supplier power, barrier’s to entry, threat of substitutes, buyers’ power and the degree of rivalry”. Vodafone is a firm among other business rivals and needs to utilize this model to develop a competitive edge over them. This enables it to understand their operational grounds in terms of industrial context.
On the aspect of suppler power they need to focus on the impact their products have to the consumer especially in terms of cost, availability and customer’s ability to differentiate them. The suppliers have influence over the manufacturing industries especially for the costs of raw materials if the are powerful enough. The focus should also be on the presence of substitute inputs, threats on their expansions especially to Middle East countries where substitute inputs may not be available.
The threat of entry analyzes the inputs, government policies, economy of scale, the required capital, identification of brands and accessibility. These are all aspects that influence the probability of firms entering the industry. If new rivals enter the market then the profit levels reduce.
The other competitors may be producing comparable merchandise and this will be the threat of alternative products. They include switching cost or price performance among others. Threats exist when prices of substitute products change and more substitutes’ translates to more elastic demands since the consumer has more alternatives to choose from.
The power of the buyer depends on the number of suppliers for instance if this communication industry have many service providers, then the consumer’s cost would be low due to competition. The firm checks on the purchases volume, brand identity, price sensitivity, differences in products, buyers’ concentration and incentives.
Lastly, the degree of rivalry indicates that the competition among rival firms reduces profit margins because the firms strive for competitive advantages over the rivals. Firms need to checks on the existing barriers, concentration in the industry, growth or differences in products, switching costs, brand identification, diversity of the rivals and corporate stakes.
Works cited
Ali and Partners. Bridging business cultures, 2004. Web.
Fagan, William Outlook and Regulatory Challenges in Qatar’s wireless Broadband Sector, IctQatar journal 2008: Web.
Porter, Michael. E. On Competition: Porter’s Five Forces. Boston MA. Harvard Business Press, 2008
The Times Newspaper Ltd. Using technology to improve economies. CMBA Pushers Ltd. 2009. Web.