Vodafone Analysis

Vodafone’s Business Strategy Vodafone’s business strategy provides an integrated and coordinated set of commitments and actions that are based upon the company’s core competencies and guides corporate behavior toward achieving performance goals. It also fits in with the existing external environmental conditions, which have enabled Vodafone to grow substantially over the years.

Vodafone’s strategy has been, in some ways, based on the concept of growth at all costs—though, as its sale of its business in Japan and its failed takeover of the market in the U.S. both show, there is a limit to which Vodafone will exert itself in order to achieve growth. If growth is viewed as too costly for shareholders, it is avoided—and that self-regulation is one part of the reason for Vodafone’s success over the years.

With more than 150 million customers from 26 countries all over the world, Vodafone’s ascension in the market to the number one spot came through a serious of strategic acquisitions (Banzhaf & Som, 2006, p. 830). It also engaged in developing strategic relationships with network providers in regions where it had no equity, which enabled the company to pursue its mission at low costs.

Integrating its various operations around the world required Vodafone to initiate its “One Vodafone” plan in 2008, which aimed to integrate its business architecture via eight different programs—from IT to customer service. The goal was to become more customer-centric, with more power distributed across localized centers so as to help the company to grow its brand across a wide range of regions and customers, with the latest in networking and technology made available to clients and employees.

One Vodafone was a policy that represented the company’s core competencies in action. Vodafone’s Organizational Structure Vodafone’s organizational structure under One Vodafone places the CEO of the company at the very top, with the various regional heads reporting to the CEO. The regional heads includes the company’s station chiefs in Belgium, France, Switzerland, Poland and Romania serving as the European Affiliates group. Station chiefs in China, Fiji, Kenya, the U.S. and South Africa serve as the non-European Affiliates group.

Germany has its own group, as do Italy and the UK. Other subsidiaries within the Vodafone structure are found in the various regions from Albania to Spain to Ireland to Egypt. There is also an Asia Pacific group that includes station chiefs in Australia, Japan and New Zealand (Banzhaf & Som, 2006, p. 837). This structure is facilitated by a new governance scheme as well, which consists of two separate management committees that have responsibility for overseeing the firm’s overall strategic policy.

These committees are the Executive Committee which oversees strategy, finance, planning and organizational development; and the Integration and Operations Committee, which oversees operations, budgets, forecasts, product/service development, etc. Both Committees are chaired by Arun Sarin, which gives them cohesiveness. This structure effectively supports Vodafone’s strategy by giving it the proper oversight for directing a diverse range of operations in a diverse field among a multitude of regions with different consumers and markets in each one.

By integrating the various aspects of the company under the two umbrella committees, Vodafone has ensured that every part of the firm is geared within a unified structure towards a common goal—to be the world’s largest mobile operator.

Most Important Facts and Key Issue The most important facts about the case of Vodafone’s growth are that it has expanded quickly to be a player in 26 different countries around the world, though its dominant foothold is in the UK and a handful of other European countries. The company is led Arun Sarin, who has just sold the firm’s stake in its Japanese subsidiary and backed away from a tempting proposition in the U.S. to gain more market share.

The company is focusing on streamlining its organization by uniting all its subsidiaries and regional players under the policy of “One Vodafone,” which gives Arun Sarin complete oversight of all the individual players, markets, regions, and operations, as he heads the two steering committees that oversee the firm’s Board.

One Vodafone is the structure that will be used to bring the firm’s various corporations and brands into a unified service that is completely oriented towards providing the best service for the customer, no matter where the customer is in the world or what the rest of the market is doing. To achieve that goal, Vodafone has embarked on a series of strategic acquisitions, but not without ensuring that the businesses purchased were priced so that Vodafone could benefit from the acquisition.

If the acquisition was deemed too costly, it was viewed as bad for shareholders, and so Vodafone has not been as forceful in gaining control of the U.S. market as it might otherwise like to be. However, it is now at a crossroads and in order to expand in the West, it must decide how to dominate the U.S. market. Alternative Courses of Action In order to be the biggest mobile communications leader, Vodafone would still have to grow its operations in the U.S.

and here it had two options: first, it could embark in a hostile takeover of Verizon Wireless to the tune of 150 billion USD. Or it could sell its minority stake in Verizon and taken a controlling stake in a lesser mobile company. The first option would be costly, but it would put Vodafone in a position to unite Verizon’s network under Vodafone’s standards.

If Vodafone instead chose to sell its position in Verizon, it could engage in a flanking maneuver and chip away at Verizon’s market over time, but this too would likely be costly. The best course of action for Vodafone to achieve its objective would be to acquire Verizon through the purchasing of a controlling stake in the company.