Ｓｔｒａｔｅｇｙ　ｏｆ　Ｖｏｄａｆｏｎｅ　ｉｎ　Ｎｅｗ　Ｓｅｒｖｉｃｅ

王　暉

Abstract:This paper is a comprehensive and incisive analysis of Vodafones strategy in new service in order to make clear of its next action and a deep insight of Vodafones external environment which has influenced the past of the business and will also work on the future strategy. Although Vodafone is a global company, the paper mainly focuses on the Europe market.

Key words:strategy macro environment five forces

1 Introduction

Vodafone, one of the largest telecommunication operators, has expanded its business among more than 26 countries all over the world and provided network service for 31 countries cooperating with its fellows. It is a successful example of expanding glob ally; however, recently its profits are decreasing including the Europe market and Japan market which in the meantime reflects some intrinsic problems. So after Vodafone strategy of expanding, what next action should be taken in order to move on successfully?

2 External analysis

2.1 Macro environment

2.1.1 Political aspect

As one of the most successful telecom service provider,Vodafone is seasoned with local politics about telecom of each country in Europe perfectly. The polities relevant to the telecommunication industry are favorable for companies to develop. Meanwhile, the environment in each country is similar to each other while there are little differences in politics, which makes the policy that unifies the service standard of Vodafone available and profitable. According to all these facts, the political environment in most countries of Europe is fine to Vodafone.

2.1.2 Economic aspect

Economy of Europe rises steadily in present years and it will continue rising in the next two years. According to the financial report of Europe, the household disposable income will grow to a high level. It is certainly good news to Vodafone that it doesn ' t need to worry about the financial burden ability of customers in Europe if only there ' s no abrupt economic crisis. So the only thing Vodafone need to do is to make every effort to let customers choose their service and products. Finally, our conclusion is that the macro environment in the coming two years will be fine and optimistic to Vodafone ' s Accomplishment.

2.1.3 Social and cultural & demographic aspect

The harmony of social and cultural environment is another advantage of Vodafone in Europe. Europeans rely on mobile telecom seriously, the current numbers of mobile phone users is very high and the dependence will even be more serious in the next few years with the coming of information society. Moreover, as a certain result of information society, there will be more demand on 3G and other high-Tec services. These characters provide a vast and stable market.

2.1.4 Technological aspect

With the new principle of combining mobile service with the Internet through 3G, Vodafone is looking for cooperators and now has some important headway . The net of Vodafone that spread all over Europe provides a good foundation to establish 3G service and the present technique of wireless telecom will be of great help to this plan. This plan will promote smoothly and will be competitive in the technology aspect in Europe.

2.1.5 Ecological aspect

Vodafone mostly focuses on power saving, minimizing production of waste and recycling. Thanks to the remarkable contribution of itself,Vodafone has a good report on environment protection. This is of course another strong point of Vodafone.

2.2 Micro environment

2.2.1 Suppliers

Vodafone chose Ericsson to manage the supply and distribution of mobile network spare part in its main branches because of Ericsson ' s leading position in this area. Ericsson was also chosen to be the only supplier of the kernel IP IMS in Portugal and Germany and it offered their excellent service so as to support Vodafone to keep advance in the all-IP network. Their cooperation was so good and steady that they both got considerable profits in the past several months and conclude that Vodafone and Ericsson would go on cooperating in the next two years.

2.2.2 Customers

Now Vodafone has customers more than 200 million all over the world. The amount of customers is very large both in Germany and also in Britain. Most of the company ' s customers are young people. Vodafone supply special services to people at home and hope that more and more customers use mobile phones instead of fixed phones. Also, they provide more services for business men or people at work to make it convenient for people to do all things they want to do on computers.

2.2.3 Competitors

In Germany, Vodafone and T-Mobile were the most two competitive companies in the battle of the only dealership of iPhone mobile phones form Apple. Surprisingly, Apple finally chose T-Mobile rather than Vodafone in July, 2007. Actually, early in 2004, T- Mobile had done the operation of 3G in order to beat Vodafone. Even though Vodafone was beaten by T-Mobile, there is no doubt that Vodafone is still a strong competitor in Germany. In England, Vodafone always did well. Conclude that Vodafone will be the biggest wireless company in England all the same and it will also hold the first place in the future 2 years in Britain. On the other hand, a federation called FreeMove, consists of T-Mobile, Telefonica, Telecom Italy and Orange was founded in 2003 to stand against Vodafone. Despite FreeMore ' s amount of customer s is larger, Vodafone could do new operations in markets much easier because of its leadership in the area.

2.2.4 Buyers

After analyzing,conclusion is that even if Vodafone was beaten by some competitors in recent years, Vodafone has its own characteristics which could hardly be exceeded and there is little possibility that other companies would substitute it in the mobile world in the next two years. Since the PESTEL tool is similar with the external analysis, Five forces tool will be used to take the next analysis.

3 Five forces model

3.1 Customers

In the telecommunication industry, customers doesn ' t know clear about what the structure of cost which will decreases the ability of bargaining. And since the market is very dispersive and wide not concentrates on a few buyers, that will be beneficial to us. However, our customers are relatively sensitive about the price of those unnecessary services, which means if the price is out of their acceptance, they will just refuse them.

3.2 Suppliers

Since Vodafone is a famous global company with good brand name, most suppliers should depend on it, and as for those first- class suppliers, both of two sides are pursuing a stable cooperation relationship,which will bring benefits to each other. New entrants Telecommunication industry naturally possesses higher entrant barriers in various aspects. However, within the industry, many relevant companies such as the fixed service operator, the mobile service operator and the wireless service operator can all expand their services line to other areas. Then form new competition.

3.3 Competitors

According to the analysis above, in the mature markets, Vodafone still has many competitors, mainly because they all can provide almost the same service which provides more choices for users. So under such circumstances, set more nice markets and put forward more services with difference will be a better way to abate the competition.

3.4 Substitution

A company running integrated services including the fixed, mobile and TV services has the trend to take place of the company with single service and become dominant. Another threat is the virtual service operator with farless cost and much easier operation and Management. Opportunity Environment trend: Now the world is developing in a high speed. They need a faster download speed. The new service can give the highest speed of moving network download. 3G has been a hotspot in the world. Now there has no been company do some thing in this domain in the world. A market plan is made to ensure the success of new service in market through marketing mix.

3.5 Product (service)

The core product: Users can surf on Internet using PC conveniently even at the high speed of 60miles per hour and enjoy the high speed including download speed and upload speed mostly the same with ADSL speed which is the preposition and guarantee for popularization of "mobile Internet at high speed" service.

The actual product: This service will firstly be provided among the Western Europe and Japan which have already developed advanced 3G, HSDPA, and even Wimax and at the same time have the high using rate of PC.

Augmented product: Guarantee the services of high quality. For instance, if there is a case of no service in some area, make the compensation for customers.

4 Price

4.1 Pricing objectives

Getting market share: Firstly since for the communication service, customers' loyalty to the service provider is relatively higher than those consuming products, then getting market share will be necessary. And secondly scale economic effect resulting from the high market share will definitely contribute to reducing the cost of network service. Finally it will also broaden the Vodafone 's brand name and propagate the culture and idea of enterprise.

Getting profits: Since recently Vodafone's VPRN and profits rate are both decreasing and the total loss has been ranked first in Europe, then the profits objective should be also taken into consideration.

4.2 Factors affecting the price

The cost and profits objectives: calculate the service cost, the tax rate and the profits in order to set a reference price.

Customers' perceptions: If the price is out of the customers' acceptance, they will think that it is not worthy, then they maybe turn to ADSL at home or office.

Competitors' price level: KT' s service in Korea and T-mobile's service in Europe can both be considered to make the proper price.

4.3 Price strategy

After analyzing the objectives and the factors above, the skimming pricing could be an appropriate strategy. That will increase the profits and indicate our service of high quality. In addition to that, Internet on move and IPTV service even the tradition al services such as voice service can be saled together which lets the users enjoy more discounts. Then high number of consumers are attractted and obtain a large of market share at launch in another way but not low price.

5 Promotion

5.1 Advertising

on TV, a student on train is watching movies on line, a business man is handling the e-commerce on the car. There several scenes show that mobile Internet at high speed is a good helper in your future life. And the motto is " Vodafone, your versatile mobile helper " and on other media like newspaper, magazines, networks, public broaders, propagate the idea of "Internet,move everywhere " which is a new way of life in this information society .

5.2 Public relations

Patronize some famous sports events and some influential TV programs. And make some contribution to the education field is another good way. Vodafone can also help those areas with poor communication conditions to build some advanced equipments.

5.3 Sales promotion

Adopt this strategy: If users pay the service fee in advance of 6 months or 1 year and so on, then they will have corresponding discounts in order to attract more clients and have more cash current. And another strategy: If one organization, enterprise or government buy the service as a whole, the fee will also be reduced at some degree in order to attract the potential client groups .

Bibliography:

[1]HUAWEI got the global supplier awards from Vodafone in 2007 Outstanding-Performance Award. Retrieved June 18, 2007, from China PCB Technology Network.

[2]The total number of customers of Vodafone breakthrough 200 million , but the number of 3G customers is only 13.6 million . Retrieved February 2, 2007.

[3]Soft B an bought 97.68% stock of Japan Vodafone by 15.5 billion dollars . Retrieved March 18,2007, from Sina Technology Web site.