Technical Changes in Vodafone

Introduction

Vodafone group is a mobile network operator based in England and has its headquarters in Berkshire. It is one of the companies in the world that has the largest market turnover with a value of £84.7 billion by July, 2007 estimates. In addition to this, it has 200 million proportionate customers throughout the world. It is the third mobile operator in the world after China Mobile and O2Telefonica. The improvements that this company has had in the past can be attributed change in technology and other advancements related to technology

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In the telecommunications industry, technology has moved faster than in any other sector because of its dependence on ICT. Vodafone for example, has since adopted technologies that have come to improve the provision of services especially in the third world countries. Its subsidiaries in Africa have employed the use of technologies such as the GPRS to effectively improve communication for its customers. The company including Vodafone South Africa has adopted technologies including those that allow its users to send and receive money in specified outlets, email mobile. This paper will therefore discuss the SWOT analysis with regard to technology changes within Vodafone. It will also look into effectiveness of changes in technology with reference to the organization’s responses. As a matter of clarity, it will also analyze how technology change has influenced policy and decision making processes within this organization. Finally, it will, as a way of recommendations identifies areas for improvement in response to Vodafone as an organization (Fukunari, 2008).

SWOT Analysis

Most companies, organizations and institutions today are using SWOT analysis as a strategic method/tool for evaluating their strengths, Weaknesses, Opportunities and Threats with reference to strategic planning. This method was first developed by Albert Humphrey who sampled data from Fortune 500 companies and studied their performance in a research in Stanford University. SWOT analysis identifies the internal and external factors that determine the achievements a company has specified in its goals and objectives.

SWOT analysis aims to identify the main external and internal factors that are important to the company. In case company such the Vodafone, the SWOT analysis will be in a position to help it groups the factors into two. First, it specifies the internal factors i.e. strengths and weaknesses of Vodafone as a telecommunication company. Secondly, it categorizes the external factors that have been identified to boost or hinder the achievements of the company especially I terms of growth and expansion. These external factors are the opportunities and threats.

Strengths

The company has developed in business since 1991 and its technology has been changing since that time. Vodafone has been getting into international markets and acquiring subsidiaries from other companies especially in Europe, Asia and Africa to build its technological base. Going by the financial status of the company, its sales and profits has also grown tremendously to a value of 84.7 Billion Euros as per 2007 financial statistics. Vodafone also has an excellent reputation of quality products and services which have helped it meet its market target.

Vodafone’s global portfolio of services coupled with high quality brands has been giving it a competitive advantage over the others in the telecommunications field. Technology change in provision of voice and data services for the company has been hi-tech and this has been boosted by the fact that the telecommunications industry has really benefited greatly with internet and ICT for the past two decades

Vodafone is currently a powerful player in the mobile network operator in the world. It has a good reputation for value for money going by the quality of products and services it offers such as clarity in communication, wider product base, larger coverage etc. The company has grown substantially in the recent years going inline with technological changes in the sector from fixed line to wireless communication technologies which include GPRS and GSM (Fukunari, 2008).

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The company has experienced global expansion as its ability to adapt to technological (computer based) strategies has been appreciated both domestically and internationally. Vodafone has a core competence involving use of ICT to meet the needs of its customers. It also developed new technological approaches and strategies to support its international logistic systems i.e. to see how the subsidiaries in other countries are performing in other parts of the world. The company also trains people in its human resource development strategy to meet with the technology changes that need people to have hands on experience on the way services and products are provided to the consumers. The company’s assets make it one of the richest companies in the world. Most of these assets which are part of the company’s unique technology which has given it a huge market share compared to the others in the sector Change from GPRS to other modern technologies have helped the company provide quality financial reserves that provide likely returns.

Good leadership

Leadership is very important when it comes to assessing technology change. Leadership within Vodafone has helped it create and maintain a healthy organizational culture within it. The social responsibilities in which the company has undertaken especially in the sporting activities have increased its popularity not only in UK but also in other parts of the world. Its employees are appreciating the company’s efforts to meet challenges of technological change offered by its leadership structure (Ravi and Marcia, 2009).

Vodafone has also been active in its corporate responsibility especially within UK and the U.S. The company has sponsored teams such as Manchester United in the Barclays’ Premier League in the past and it has continued to support many more such in golf and rugby. The technological changes that have taken over the marketing techniques such as internet marketing, the company has assisted many other industries to meet their marketing requirements since it has the best coverage in the world on network coverage, internet solutions etc.

Weaknesses

Losses

Since the year 2002, Vodafone has shown large statutory losses and this has resulted in goodwill ‘being written off’ by the UK GAAP. The company has reported to be having huge losses that is why it requires the ‘goodwill’ as it plans to accommodate technology change in its sectors. The losses have been attributed to the heavy investments applied on technology in the sector such as the GSM technology. Despite this reality, Vodafone is a highly profitable company and it is only having challenges in terms of providing high quality services and products that go in line with today’s technology. The company in 2006 announced a loss before tax of £ 14.9 billion which was the biggest in UK’s corporate history since 1992. The main cause of the loss was impairment charges pushed to the company through acquisition of Mannesmann.

Despite its numerous strengths, Vodafone could leave it weak in some areas due to huge span control in terms of changes in the way services and products are developed. The company fails to meet the international challenge of penetrating new markets apart from what it has acquired so far because of the strict trade tariffs. Some countries are developing very faster in terms of technology and are now capable of rolling out their own mobile network operation abilities which will mean that Vodafone should improve further internally and prepare its technical team for better technology-related improvements (Solomon, 2007).

Low morale and motivational leadership

Critics in terms of leadership management suggest that the move by Vodafone to retrench majority of its employees in industry and services has lead to increased amount of poor provision of services within the company. Performance management control is seen as to be reinvigorated by transferring the dimension of disciplinary management among the employees themselves especially those working in various companies not within the UK.

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Employees mostly focus on themselves rather than the group work because they are not actively involved in the actual planning of the goals and objectives of the company and this has resulted in mistrust for the company. The leadership of this company should be in apposition to promote em0ployee participation, innovation and new product development. It is also very difficult for the employees to easily adopt the technological changes that are inline with the requirements of the company. The company ha been forced to retrench its employees to accommodate new individuals who are aware of the new technology the company is adopting year by year. Vodafone has also been forced to train its employees to make use of new computer software, hardware and methodologies for the new generation technology (Fukunari, 2008).

Opportunities

As technologies become more complex and accessible, the mobile infrastructure market will increasingly change with technology and this will negatively and positively affect Vodafone. Today, customers would like to have devices and services that match with the technology of the day. Introduction of mobile TV, General Packet Radio Service (GPRS), and Global System for Mobile Communications (GSM), Smart Phone, and Future Mobile Networks Etc poses a challenge and equally an opportunity for the Vodafone Company to critically use the already available financial advantage to beat their competitors. The growth and advancement of mobile networks will sway for the Vodafone depending on forces such as;

  • Market driven factors-some products are developed without a clear market demand or its need derived from the customers
  • Continued sophistication of services
  • Increased divergence in the use of the devices/ services such internet use, video recording, music playing and other multimedia features that are available in a computer

Vodafone in the past has taken over, formed strategic alliances and merged with other companies in the sector top form strong competitive companies and it still has opportunities to further these opportunities. The main opportunities lie greatly in Asia and South America where tremendous opportunities for future business especially in expanding consumer markets in countries such as India and China are located. New locations offer Vodafone huge chances for excellence as the different technologies apply to the different countries (Ravi and Marcia, 2009).

Threats

Since Vodafone is the biggest company in the world, it is subject to harsh competition as almost all companies will be trying to adopt and outweigh it financially, technology-wise etc. Being a global leader in this field, Vodafone is exposed to political problems and other issues such as those policies by GATT. As a mobile network provider and mobile technologies/ handsets are becoming environmental hazards, the company is facing huge challenges. Mobile manufacturers such as Nokia are intensifying their products to become environmentally disposable, this will mean that price deflation for services will occur leading to price competition for players in this industry as well (Cane, 2009).

The competitors for Vodafone are varied depending on the local partners in the country where the company has invested or has subsidiary with. Throughout the countries, the following are some of the competitors for this company; Telstra, Optus, China Unicom , China Mobile, PCCW , Bharat Sanchar Nigam Limited, Reliance Communications, Idea, Spice, Aircel, Telkomsel, Indosat, Maxis Communications, Telecom Samoa Digicel, SingTel, StarHub, Mobitel, Hutch, among others. Competitors for Vodafone keep on with new technology to improve their services. Some companies have shifted from old computer based technologies to newly agitated technologies making them more competitive.

Other form of threats that may hit the company’s performance at the moment is modernization in the telecommunication sector the effects of mobile network technologies for any company in this industry will be social, political and economical in nature. The social effects that have just been noticed are misuse of mobile email, messages and other things. This will in future become a source of contention for the service provisions in this field. When telephone lines will be phased out throughout the world especially in African countries where they still being used, Vodafone will be having problems with its old fashioned technology, as it will need to obtain new machines at higher costs (Solomon, 2007).

Policies and decision making

Policy making processes within Vodafone have been influenced greatly by changes in technology. The process has always been made in reference to the objectives and goals of the organization. Certain policies such as the human resource policies that have been developed by Vodafone have helped the company meet its current domestic and international markets. Good polices go inline with the current technology. It would be unprofessional and unethical to provide policies that will be detrimental to the company’s business development (Fukunari, 2008).

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Vodafone has since adopted very many polices in a bid to meet the challenges of competition. Its famous policy of 2003-Market Outreach Policy- gave it additional achievements as it ensured that the company reached oversees markets without any hindrances. The policy helped the company to acquire more companies and take part in joint ventures with other players and businesses in the industry which have better technology, machinery or human resources than Vodafone e.g. when the company for example got a stake of 15% in the Hambros Technology trust, it benefited from the company’s minority stakeholders and technology. This is an example of policy making processes that have helped Vodafone expand in its technology. These policies have acted as legal tools to be used by the organization. The organization can seek the services of other firms to ensure that these policies conform to what is required locally and internationally. These policies will also act as a guide to the company to successfully monitor the progress of the connectivity. Change in technology also influences the way decision making procedures are undertaken just like in policy making. Decision making in the company always conforms to the strategic planning of the company. When it comes to mobile network services, Vodafone bases most of its decision making process on the current and future technology needs that will be applicable. Decisions regarding the way the industry will behave in future should be predictive in nature and that is why it should be incorporated in the technology based issues (Cane, 2009).

The strategic and policy planning which has been adopted with reference to technological changes in the industry has incorporated the following issues; identification processes, responsibilities and products for new product development and other forms of mobile communication.The company’s policy on laws and regulations has also been severely affected by legal suits that has brought the company to a lower level. Some informative policies have not met the required strategic awareness to all the staff members and other employees in the industry. Other policies that touch on security concerns involve copyright intellectual property which will make sure that users are restricted and know their boundaries. To implement all these policies, several additional technological advances need to be put in place first with a view to meet the policy requirements of the company (Fukunari, 2008).

Effectiveness of the organization’s response

The technological changes that the company has adopted have helped it expand its operations and gain a better market share from its competitors. Compared to other companies that started to adopt the new technologies in recent years, Vodafone has gone far and that, it is having a better market potential in comparison to its competitors.

The table below shows how the company has faired on in international market

vodafone share proportion

Vodafone has strived to grow in its business as the worlds leading telecommunications and mobile network company. Its main goal states that it endeavours to maintain a strong but conservative financial position through the implementation of new marketing strategies. With careful management of its net-working capital, the company intends to strike a good financial objective in the near future and one of them is the new joint venture with the other companies.

Through research and development, this company has developed new innovations in the past making it a global prowess. Currently the company holds to its name a whooping 3,000 patents including numerous licensing agreements around the world making the most innovative company of the century. It was estimated by an annual world report that, the company in technology and innovation is ranked among the top ten companies in the world, the best in UK and second in Europe. This has put the company in one of the strategic positions to out-compete its competitors in the mobile network such as China Mobile Company.

Areas of improvements

New product development especially when it comes to adopting new technologies is one of the areas that need to be improved. The internet is one of the tools that are needed to be incorporated in its marketing technology. Today, the internet has become one of the necessities that a company must utilize very much in order to meet the global market. Vodafone can in the future provide ads that could be possible to make its customers access them through the internet. The consumers of the products and services that are provided by the company can be able to download very larger materials through the internet. This is because at the moment, it can only allow simple messaging and limited downloads making it a disadvantage (Cane, 2009).

The company can also improve on its leadership structure. It is now time to have manager and leaders to be technologically oriented with what is happening in the industry. The current leaders in this company are management oriented and thus the combination of the two approaches will ensure that the company propels further. The company’s strategy that is required to meet the core principles of the objectives is to fully exploit the mobile industry market through the potential technology it currently offers.

Market and customer operations have for a long time supported the various business groups available in the company. The other horizontal entity that has provided enough support for the business groups is the new technology platforms created to allow for the management and driving force for Vodafone products and services. These are some of the strategies that the company can implement to meet the technological challenges for the future. The company has in to develop business models, marketing strategies and new innovations in the telecommunication and network operation sector serve its consumers to the fullest and satisfactorily.

In order to implement new technologies, the company needs to extensively do internal and external research to see if the technology will be possible. GSM technology for example, was difficult to implement as it required both customer and company approval. Vodafone had formed a task force to look into the issues raised by the proponents of the technology. The task force took looked into other policy and strategy issues which arose before and during the implementation process. The most urgent task was to see if the company’s budget allow for its implementation (Cane, 2009).

Conclusion

In move that is seen as a strategy to develop in business volume, Vodafone has since its inception adopted technological changes in its departments including; new product development, better service provision, marketing and strategic planning. One main factor that has been usefully adopted as a method of evaluation is the SWOT analysis. The main issues in this analysis are; Strength, which is the profitability levels and the international branches the company has built abroad. The Weakness the company has experienced is poor leadership, loses and low employee motivation. The opportunities that are available for this company are the advances in technology use such as internet which is now being used by almost all people in the world. Finally, the threats for Vodafone are competition and politics.

Reference list

Cane A. (2009): Companies and Finance: Vodafone acquires Talkland in Pounds 60m deal”, UK, Financial Times.

Fukunari K (2008): The Formation of International Production and Distribution Networks in East Asia, Working Paper- Keio University, Department of Economics and Keio University.

Ravi K and Marcia R (2009) E-business Roadmap for Success, second edition, UK, Oxford.

Solomon R, (2007): Flat–the minimalist price, in Internet Economics, L. W. McKnight and J. P. Bailey, editions., MIT Press.

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