SWOT ANALYSIS of Telecom Companies

8/2/2019 SWOT ANALYSIS of Telecom Companies

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multi-national-telecommunication-company.html

VODAFONE: An Analysis of a Multi National Telecommunication Company

Abstract

A Multi-National Company named Vodafone is one the leading

companies in Telecommunication Industry. To determine the factor that became

their key to success is a good implication that all the company can be as

successful as Vodafone, although they engaged in different kind of industry. The

study also includes the companys brief history, vision, and different challenges

that leads the company in making formulas to trap the success on their side.

History

Vodafone was formed in 1984 as a subsidiary of Racal Electronics Plc.

Then known as Racal Telecom Limited, approximately 20% of the company's

capital was offered to the public in October 1988. It was fully demerged from

Racal Electronics Plc and became an independent company in September 1991,

at which time it changed its name to Vodafone Group Plc. It also merged with

AirTouch Communications, Inc. (AirTouch), the company changed its name to

Vodafone AirTouch Plc, following the approval by the shareholders in General

Meeting, reverted to its former name, Vodafone Group Plc.
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Vision

Our vision is to lead the industry in responding to public concerns

regarding mobile phones, masts and health by demonstrating leading edge

practices and encouraging others to follow.

Company Strategy Review

In May 2006, the company formulated a five point strategy which served

well for more than two years. And broadly maintained or improved share against

our largest or reference competitors in most of our markets and delivered on our

key cost targets. They increased the share in revenue successfully increased the

exposure to higher growth markets.

However, a number of challenges have evolved. Elasticity on core voice

and messaging services remains below one, competitive and regulatory

pressures continue to be strong, and meeting the expectations in some market is

hardly attainable. Those factors which affects the continuous growth of the

company, undergone into on-going company strategy review.

PEST Analysis

Political political factors involved the tax policy, labor law, environmental law,

trade restrictions, tariff, and political stability.

Due to the customer relationships that the company value most,

Vodafone is willing to shift their approach away from unit pricing and unit based


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tariffs to propositions that deliver much more value to customers in return for

greater commitment, incremental penetration of the account or more balanced

commercial costs. This will require a more disciplined approach to commercial

costs to ensure our investment is focused on those customers with higher lifetime

value. In essence, we are confident that by targeting our offers, we can deliver

more value to our customers and have a better financial outcome for Vodafone.

Economic economic factors includes the economic growth, interest rates,

exchange rates and the inflation rate. The pricing factors the company usually do

is giving the consumers a right and justly cost so that, everybody can avail or

purchase their product in a broad sense.

Social social factors include the cultural aspects and include health

consciousness, population growth rate, age distribution, career attitudes and

emphasis on safety. The need for an equipment that can be a good device for

every age range is available, since everybody are fully oriented in the use of the

mobile technologies.

Technological technological factors includes ecological and environmental

aspects, like R&D (Research and Development) activity, automation, technology

incentives and the rate of technological change. The technology is the thing that

Vodafone is very proud of. The technological advancement enables the company

to make a customer relationships stronger because of their customers trust that

built over the years.


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The PEST factors have major impacts on how businesses operate and

make decisions. With the help of PEST analysis, the business can penetrate to

the market with readiness. The determination of its four keys, the business will

answer the common questions that revolve around the business society. These

basic questions are what to produce, how to produce, when to produce and for

whom to produce. No matter how many times a business answer these

questions, the needs from the market will remain constant and unchanged.

It is an advantage of the company to know the scope and limitation of their

business. It is done so that the company is prepared enough to face a future and

ready to give solutions as possible when the demand for the products are

satiated or already diminished.

SWOT Analysis

Strengths The Companys strengths can be the reputation of the business in

the local market because of the product in long run. The companys strengths are

the strong bond of the company towards the customer and valuing them most as

they craft another product. Another strength that can be depicted is the

technology that is their greatest asset above the competitors.

Weaknesses The result of the weaknesses can be shortage of materials

needed or more expensive purchase of materials in the target country. Meeting

the customers demand is sometimes hard to cope. Every company must admit


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that reaching the customers taste and preferences are really hard to achieve.

But this weaknesses will serve as a challenge in the company and they must

prepare actions in answering this needs.

Opportunities The opportunities can be a well established position when the

business successfully landed in the foreign market. On growth opportunities, the

three target areas are Mobile data, Enterprise and Broadband

Threats The threats can be large competitors that are waiting for the business

that were undiscovered before conducting the study. This possibility is not that

new. The Vodafone is not the only company that serving a kind of delicacy.

Some companies might surpass their achievement, and therefore, they must

maintain their company culture in dealing with their customers and being ahead

in the products and services. The threats will not mean bankruptcy, but it can be

a contributing factor in the bankruptcy of the company.

The SWOT analysis is a tool that assesses the company in its position in

the market, or commercial viability. The method of sales distribution with the

accordance to brand or product, business idea, strategic option, such as entering

a new market or launching a new product, opportunity to make an acquisition,

potential partnership, changing a supplier, outsourcing a service, activity or

resource, and investment opportunity, in short, SWOT measures a business unit,

a proposition or idea.

Key to Success


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The foundation of every company to reach the success is how effective

the research made and the continuous development in it. The further innovation

is another great factor. The service of Vodafone towards its customers can

generate a strong cash flow, based on the high-demand on their communication

products. A greater range of data devices and portable computers, at

increasingly lower costs, are enlarging the addressable market. On the cash cost

side, only about a third of operating costs are fixed, and about a quarter depend

on growth in voice minutes and data traffic.

Vodafone has three key attributes which strongly differentiate from the

competitors: firstly, the scale in technology with which we continue to drive

network and IT savings through consolidation and centralization of core activities;

secondly, the strong presence in the enterprise market, in large corporate as well

as in small and medium sized businesses; and finally, the brand, especially in

consumer pull markets. The Vodafones strategy is focused on four key

objectives: drive operational performance, pursue growth opportunities in total

communications, execute in emerging markets and strengthen capital discipline.

Conclusion

The fast growth of the company doesnt depend on its strong cash flow but alsoaffected by the assurance of the companys customers loyalty. The exposure ofthe products in the market eye is a great help in earning the customers trust. Theproper use and taking the chance of innovation considers a fifty-percent risky andthe other half is fifty-percent successful. But in doing a business, the companymust keep into their mind that it is better to lose a little in the income in trying tomake a difference than to lose all because of doing nothing.


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SWOT Analysis of AIRTEL

Weaknesses to Choose: Damaged reputation Low quality products/services Higher coststhan competitors Low R&D Inexperienced personnel Old & outdated technologies Lack

of an effective marketing strategy Over pricing Lack of business alliances Poor financial

position Lack of innovation in business Poor relationship with employees Lack of

international operations Stock problems Lack of online presence Underdevelopeddistribution chain Lack of original products/services Unprofitable location Lack of

Patents/Proprietary technology Weak Brand Limited customer base Weak market

position Limited product line Weak supplier relationships Low market share

Opportunities to Choose:
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Available Governmental support Export to new markets Available technological

innovations Gain online/e-commerce presence Change in consumer lifestyles Good

financial position Decrease in taxation Growth of the industry of operations Entering newmarkets Improvement in economic climate Entering niche markets Market

Diversification Expand customer base (Geographically or through new products) Merger

or takeover Expand product/service lines Reduction in interest rates Expand to othermarkets Strategic alliances & joint ventures Expertise of the existing workforce

Structural changes in the industry

Threats to Choose: Change in consumer lifestyles Increase in taxation Changes in

demographics Increasing interest rates Changes in regulations Innovative

products/services of competitors Changing consumer patterns Low-cost importsChanging technology Market slow growth or decline Competition from foreign markets

New competitors entering the market Competitor's actions Price war between competitors

Financial slowdown Products entering decline stage Foreign exchange rate changes

affecting imports/exports Rising costs of business Growing power of customers to set theprice Structural changes in the industry Growing power of suppliers to set the price

Substitute products

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SWOT ANALYSIS of Telecom Companies