SWOT analysis is a strategic tool that Vodafone can use to understand its internal and external environment. It provides a clear view of the strengths, weaknesses, opportunities, and threats that the business faces from its environment ( Sammut ‐ Bonnici and Galea 2015 ). The SWOT analysis of Vodafone can help it make an informed decision to maintain its position in the telecom industry.
Strengths
Vodafone has strong brand recognition and awareness, not only in the UK but globally. Through extensive marketing strategies and quality services, the company has become a brand amongst many of its customers. It increases the sales revenue, which then positively impact the functional finance area of the company. The other strength of the company is its diverse service offerings. Vodafone provides a wide range of services to its customers. Unlike the telecommunication services, Vodafone has launched many other brands that offer a portfolio of services ( Al-Atiqi and Mumen 2014 ). The wide range of services provides more sales and a positive impact on the company's finance function. Besides, a wide range of services has a positive impact on the marketing department. It successfully ensures that the company utilizes the 4Ps of the marketing mix to deliver value to the customers.
Delegate your assignment to our experts and they will do the rest.
Vodafone has a global presence with its operations in more than 30 countries. It has operations in Europe, Africa, the Middle East, and Asia. In these regions, Europe is the leading revenue generation at 67% ( Ang 2016 ). The wide global presence is a strength because it increases revenue generation, thus positively impacting the finance. Besides, it has a positive impact on the marketing unit. Vodafone also enjoys a large subscriber base and a strong advertising background. Vodafone is in the fourth position, with over 300 million subscribers ( Lopes 2014). A large number of subscribers generate more revenue for customers and, thus, higher financial and marketing performance. The strong advertising background has also increased brand awareness. It helps promotes sales and marketing, which then leads to better financial performance.
Weaknesses
One of the weaknesses of Vodafone is its limited success outside the core business area. Compared with most of its competitors, this company has been unable to emerge successful in other service areas outside the core mobile business service area ( Lott and Sinha 2019 ). Despite the efforts to offer a broad portfolio of services, its growth entirely relies on the core business area. This weakness negatively affects the company's financial performance because it cannot compete favorably in other core areas like in the case of its rivals. This weakness also adversely affects the functional marketing unit of the company. Vodafone has a high rate of attrition for its workforce. The attrition rate means that the company incurs high turnover costs as it seeks to train and develop new workers. Unlike its competitors, such as Airtel, which has been able to maintain quality talents, Vodafone has failed in this area. High turnover rates increase costs and negatively affect the financial performance of the company ( Caron 2020 ). With a poor record of employee retention, this weakness also affects the firm's reputation; thus, the marketing function of the company. Vodafone also has a limited presence in rural areas. The company majorly has a presence in urban centers, unlike its competitors that have ventured into both rural and urban markets. Lack of presence in rural areas reduces the sales revenue and thus reduced financial and market performance.
Opportunities
Vodafone can venture into emerging markets and increase its sales revenue and financial performance. The developing countries are becoming a more significant market opportunity that the company can target to increase market share and growth. For instance, Africans are experiencing rapid growth in population, disposable income and internet use ( Chu 2017 ). Such developments can provide Vodafone with a growth opportunity. It can help increase the financial and marketing performance of the whole organization. The growing number of mobile and internet users globally is also an opportunity for the company to grow its market share. The rate of internet users has tripled over the past few years, creating more demand for data services. The total number of mobile connections has also tripled over the past years. Venturing into these markets would increase the sales revenue and enhance financial growth for the company. It will also have a positive impact on the functional marketing unit of the organization. Vodafone also has a better chance to penetrate the rural markets where it currently has a limited presence ( Orlando 2016). It majorly operates in urban centers, but with the growing rural markets, Vodafone can venture into these areas to increase growth. Growing technology will increase the accessibility of rural markets for growth in the data sector.
Threats
Competition remains a significant threat faced by Vodafone. The firm faces competition from major rivals such as Airtel, China Mobile and Reliance Jio. Some of these rivals offer low tariffs and put Vodafone at the risk of losing customers ( Belke, Dubova and Osowski 2018 ). As the competition rises, Vodafone will have to improve on its areas of weaknesses and utilize the opportunities to enhance its competitive advantage in the market. The changing political landscape and increasing regulation of the mobile data sector is also a threat to the company. Political factors such as the EU's proposal to reduce the roaming charges would adversely affect the firm's revenue. The other threat is the Brexit debate, which could adversely affect the firm ( Oughton and Frias 2018 ). UK exit from the EU will see an increase in tariffs, thus raising the charges for data. All these threats will negatively impact the financial performance of Vodafone.
Key Drivers
5G technology will increase the speed of connectivity and attract more customers. The 5G technology will then increase the sales revenue and thus the financial performance of the company. Venturing into these markets would increase the sales revenue and enhance financial growth for the company. It will also have a positive impact on the functional marketing unit of the organization. Consumerism is another key driver that will impact the financial performance of the company. With more demand for the internet due to consumerism, the sales revenue from data will increase, thus having a positive impact on finance. The strict legal landscape will also impact both the finance and marketing functions of the organization. Legal constraints limit the operations of the business, thus negatively impacting finance and marketing. The zero environmental harm to the environment as a critical driver will have a positive impact on finance and marketing. Environmental compliance can improve the reputation of the company and attract more sales, thus a positive impact on finance.
The changing political landscape will negatively affect the financial and marketing function of the company. For example, the European Commission's proposal to reduce the international roaming charges will reduce the revenue generation and financial performance. The Brexit debate will also affect the firm's global market, which will be reflected in the reduced financial performance and decline in marketing success in the foreign markets. The growth of consumerism has led to increased demand for the internet and, thus, more revenue. This would lead to more sales and, therefore, greater financial performance. Besides, it can lead to greater marketing success due to an increased number of customers.
References
Al-Atiqi, A. and Mumen, F., 2014. The Strategic Alternatives of Vodafone UK in 2009.
Ang, R., 2016. Vodafone Global Telecommunications: Optimizing Operations. IUP Journal of Operations Management , 15 (4), p.46.
Belke, A., Dubova, I., and Osowski, T., 2018. Policy uncertainty and international financial markets: the case of Brexit. Applied Economics , 50 (34-35), pp.3752-3770.
Caron, V., 2020. From the traditional system toward agile methods: Digital transformation challenge in Vodafone (Bachelor's thesis, UniversitàCa'FoscariVenezia).
Chu, Y., 2017, January. SWOT analysis and Countermeasures of India market environment for domestic mobile phone. In 2017 International Conference on Education, Culture and Social Development (ICECSD 2017) . Atlantis Press.
Lopes, M.D.M.F., 2014. Vodafone case study: loyalty and satisfaction in Vodafone: the quadruple play case (Doctoral dissertation).
Lott, J. and Sinha, M., 2019. M-Pesa’s Failure in India: Why Couldn’t Vodafone Replicate its Kenyan Success? An International Marketing Case Study. The Kennesaw Journal of Undergraduate Research , 6 (2), p.2.
Orlando, V., 2016. Marketing of innovation: the ultra-broadband as the main base for future innovation, the Vodafone case.
Oughton, E.J., and Frias, Z., 2018. The cost, coverage, and rollout implications of 5G infrastructure in Britain. Telecommunications Policy , 42 (8), pp.636-652.
Sammut ‐ Bonnici, T. and Galea, D., 2015. SWOT analysis. Wiley Encyclopedia of Management , pp.1-8.
