Business History Assignment On Vodafone

Submitted By, Marcilla 3511210230

Introduction
Vodafone Group Plc is a British multinational telecommunications company headquartered in London and with its registered office in Newbury, Berkshire. It is the world's second-largest mobile telecommunications company measured by both subscribers and 2011 revenues (in each case behind China Mobile), and had 439 million subscribers as of December 2011. Vodafone owns and operates networks in over 30 countries and has partner networks in over 40 additional countries. Its Vodafone Global Enterprise division provides telecommunications and IT services to corporate clients in over 65 countries. Vodafone also owns 45% of Verizon Wireless, the largest mobile telecommunications company in the United States measured by subscribers. Vodafone has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalization of approximately 89.1 billion as of 6 July 2012, the third-largest of any company listed on the London Stock Exchange. It has a secondary listing on NASDAQ.

Vodafone has six global goals. One of these is 'to be a responsible business'. This includes the issues of ethics. Companies develop strategies to meet their goals. Vodafone has eight key Corporate Social Responsibility (CSR) strategies. These form part of the companies approach to meeting its global goal of being a responsible business. One of these is responsible marketing: an example would be the company's decision not to send bulk unsolicited (i.e. un-requested) emails or SMS messages to its customers, they have to choose to opt- in to receive communications.

Vodafone Goals and Objectives

The primary objective of Vodafone as a business entity is profit maximisation. The company has a mission statement that ensures for this objective to be achieved in the best possible manner. Vodafones mission statement is to be the communications leader in an increasingly connected world (Annual Report, 2010). Accordingly, this mission statement is communicated to all stakeholders of the company, especially to 84,990 employees (Company Description, 2010) of the company, due to the fact that it is employees who are going to contribute the most to the

achievement of the mission statement. Vodafone is committed to achieving its aims and objectives through offering innovative and superior services. According to Saplista (2008), Vodafone is not limited to offering basic telecommunications services such as mobile phone calls and text messaging, but also offers such advanced services as:

Vodafone

at

Home and Vodafone

Office represent

integrated

mobile

and

communication services to satisfy household, as well as business needs.

Vodafone Passport allows customers to take their home tariffs abroad through roaming
services which is possible due to the wide global presence of the company.

Vodafone Live! is integrated communication and multimedia solution offered by the

company to be used through mobile phones and notebook computers.

Vodafone 3G offers 3G services that allow customers to transfer and download data in
various formats.

Vodafone Mobile Connect data cards and Mobile Applications offer customers the
possibility of portable internet.

Strategic Model for Vodafone

The level of competition in each industry, especially in telecommunications industry Vodafone is operating in has become very fierce. The only way to survive and expand in such a competitive environment for Vodafone is to have an efficient strategy that would be the source of competitive edge for the company. Currently Vodafone has no clear strategy. Therefore potential customers are not sure in what ways the company can offer value to them. According to Porters generic strategies companies can choose cost leadership and differentiation strategy in narrow and broad scope (Porter, 1985). Vodafone is highly recommended to implement differentiation strategy in a industry-wide scope. Thus, Vodafone should develop products and services with additional features that present value for potential and existing customers, and the company can charge additional extra prices for this additional feature.

For instance, in its portable and home broadband services Vodafone can further invest in research and development and achieve increasing the speed of the internet browsing they are offering. This particular strategy is most likely to prove efficient due to the fact that although currently there are many internet providers in UK the speed of internet browsing tends to decrease during specific hours of the day. Another justification for the suitability of differentiation strategy for Vodafone relates to the fact that due to the current size and financial resources of the company Vodafone can commit to high level of research and development expenses this strategy initially requires. Although Vodafones competitors do understand the advantages of differentiation strategy, unlike Vodafone the state of their financial resources do not allow them to adopt differentiation strategy.

Vodafone Key Performance Indicators

Key performance indicators adopted by telecommunications companies in general, and Vodafone in particular include free cash flow, service revenue and related organic growth, data revenue and related organic growth, fixed line revenue and related organic growth, capital expenditure, EBITDA and related organic growth, customer delight index, net promoter score, adjusted operating profit and related organic growth, proportionate mobile customers, proportionate mobile customer net additions and voice usage (Annual Report, 2010). Information requirements differ at each level of management due to the difference in the scope of responsibilities related to a specific level. Generally management levels are categorised into three groups: strategic, tactical and operational. The responsibilities, and accordingly information requirements at each level of management are illustrated on the following table:

Management Level

Scope of Responsibilities

Information Requirements

Strategic

Whole Vodafone Company in general

Strategic type of information Information regarding global environment Economic climate within country Increase in GDP Inflation rate within country

Tactical

Operations within a specific area Specific function within organisation

Level of sales for the region KPIs for the region KPIs for a specific department

Operational

A specific branch of the company

KPIs for the specific branch Aviability of stock in a specific branch

Vodafone Information Systems

Information system can be used at each above specified decision-making level in order to give competitive edge to Vodafone manager at that level in particular and to the company itself in general. Curtis and Cobham (2008) define information system as an integrated combination of information technology components and related human efforts that is used to assist in operations and decision making. Information system at each decision-making level at Vodafone should be devised and maintained in a way that it can serve the two following purposes: Firstly, information systems should support the key business functions, and create competitive edge for Vodafone. Secondly, information system should assist in efficient facilitation of Vodafones customer relationship management. In order to achieve these objectives the following recommendations should be implemented.

Strategic level management. Information system at strategic level for Vodafone should
include all external and internal factors that are going to affect the company. Information of such a nature should be supplied to strategic level managers systematically in order to assist them in decision-making. Moreover, information system intended for Vodafone strategic level management should contain detailed information about potential overseas markets, information regarding the extend of competitor activity as well as information regarding the suitability of Vodafone products and services to todays competitive standards. Inefficient information system at strategic level management is going to have dramatic negative consequences caused by not being able to respond to changing market conditions, because there was no accurate information about the changing market conditions in the first place.

Tactical level management. Information system for Vodafone managers at tactical level
should include breakdown of sales by a region, as well as breakdown of sales by a product or a service. It is important for such type of information to be supplied to tactical level managers on a regular basis. Moreover, information technology should be widely used in order to collect such type of information, because it will make the process faster, as well as cost efficient. Not implementing and maintaining efficient information system for tactical level management will cause huge losses for Vodafone which is going to affect the whole region and damage the image of the company dramatically.

Operational level management. The scope and range of information system in operational
level management is considerably smaller compared to strategic and tactical levels. Nevertheless, it is equally important for operational level management at Vodafone to have a constant supply of information relating to the process of products and services, stock availability, customer credit ratings etc. Again information technology must be widely used in order to process and store information system at operational level management. The negligence of this recommendation may result in loss of revenues caused by the absence of stock in stores, improper pricing and many other ways. Currently Vodafone commands a leading position in the global telecommunications market. However, due to the constantly changing marketplace the company cannot afford to take this position for granted and has to engage in increasing its competitive advantages in many fronts.

Name
The name Vodafone comes from voice data fone, chosen by the company to "reflect the provision of voice and data services over mobile phone

History
The evolution of 'Vodafone' brand started in 1982 with the establishment of 'Racal Strategic Radio Ltd' subsidiary of Racal Electronics plc UK's largest maker of military radio technology. By initiative of Jan Steinbeck. Racal Strategic Radio Ltd formed a joint venture

with Millicom called 'Racal Vodafone', which would later evolve into the present day Vodafone.

Vodafones original logo, used until the introduction of the speech mark logo in 1997 Evolution as a Racal Telecom brand: 1980 to 1991
In 1980, Sir Ernest Harrison OBE, the then chairman of Racal Electronics plc. agreed a deal with Lord Weinstock of General Electric Company plc to allow Racal to access some of GEC's tactical battle field radio technology. The head of Racal's military radio division Gerry Went was briefed by Ernest Harrison to drive the company into commercial mobile radio. Went visited GEs mobile radio factory in Virginia, USA the same year to understand the commercial use of military radio technology. In 1982, Racal's newly formed Racal Strategic Radio Ltd subsidiary won one of two UK cellular telephone network licences, with the other going to British Telecom[16][17] The network, known as Racal Vodafone, was a joint venture 80% owned by Racal, with Millicom holding 15% and Hambros Technology Trust 5%. Vodafone was launched on 1 January 1985 with its first office based in the Courtyard in Newbury, Berkshire, and[18] shorty thereafter Racal Strategic Radio was renamed Racal Telecommunications Group Limited. On 29 December 1986, Racal Electronics bought out the minority shareholders of Vodafone for GB110 million;[19] and Vodafone became a fully owned brand of Racal.

In September 1988, the company was again renamed Racal Telecom. On 26 October 1988, Racal Telecom, majority held by Racal Electronics; went public on the London Stock Exchange with 20% of its stock floated. The successful flotation led to a situation where the Racal's stake in Racal Telecom was valued more than the whole of Racal Electronics. Under stock market pressure to realize full value for shareholders of Racal, Harrison decides in 1991 to demerge Racal Telecom.

Vodafone Group, then Vodafone Airtouch plc: 1991 to 2000

On 16 September 1991, Racal Telecom was demerged from Racal Electronics as Vodafone Group, with Gerry Whent as its CEO. In July 1996, Vodafone acquired the two thirds of Talkland it did not already own for 30.6 million. On 19 November 1996, in a defensive move, Vodafone purchased Peoples Phone for 77 million, a 181 store chain whose customers were overwhelmingly using Vodafone's network. In a similar move the company acquired the 80% of Astec Communications that it did not own, a service provider with 21 stores. In January 1997, Gerald Whent retired and Christopher Gent took over as the CEO. The same year, Vodafone introduced its Speechmark logo, composed of a quotation mark in a circle, with the O's in the Vodafone logotype representing opening and closing quotation marks and suggesting conversation. On 29 June 1999, Vodafone completed its purchase of AirTouch Communications, Inc. and changed its name to Vodafone Airtouch plc. The merged company commenced trading on 30 June 1999. In order to gain anti-trust approval for the merger, Vodafone sold its 17.2% stake in E-Plus Mobilfunk.[27] The acquisition gave Vodafone a 35% share of Mannesmann, owner of the largest German mobile network. On 21 September 1999, Vodafone agreed to merge its U.S. wireless assets with those of Bell Atlantic Corp to form Verizon Wireless. The merger was completed on 4 April 2000, just a few months prior to Bell Atlantic's merger withGTE to form Verizon Communications, Inc. In November 1999, Vodafone made an unsolicited bid for Mannesmann, which was rejected. Vodafone's interest in Mannesmann had been increased by the latter purchase of Orange, the UK mobile operator. Chris Gent would later say Mannesmann's move into the UK broke a

"gentleman's agreement" not to compete in each other's home territory. The hostile takeover provoked strong protest in Germany, and a "titanic struggle" which saw Mannesmann resist Vodafone's efforts. However, on 3 February 2000, the Mannesmann board agreed to an increased offer of 112 billion, then the largest corporate merger ever.[30] The EU approved the merger in April 2000 when Vodafone agreed to divest the 'Orange' brand, which was acquired in May 2000 by France Telecom. The conglomerate was subsequently broken up and all manufacturing related operations sold off.

Vodafone Group plc: 2000 to present

The Head quarters of Vodafone Romania in Bucharest

On 28 July 2000, the Company reverted to its former name, Vodafone Group plc. In 2001, the Company acquired Eircell, the largest wireless communications company in Ireland, from eircom. Eircell was subsequently rebranded as Vodafone Ireland. Vodafone then went on to acquire Japan's third-largest mobile operator J-Phone, which had introduced camera phones first in Japan. On 17 December 2001, Vodafone introduced the concept of "Partner Networks", by signing TDC Mobil of Denmark. The new concept involved the introduction of Vodafone international services to the local market, without the need of investment by Vodafone.

The concept would be used to extend the Vodafone brand and services into markets where it does not have stakes in local operators. Vodafone services would be marketed under the dualbrand scheme, where the Vodafone brand is added at the end of the local brand. (i.e., TDC Mobil-Vodafone etc.) In 2005, Vodafone entered into a title sponsorship deal with the McLaren Formula One team, which has since traded as Vodafone McLaren Mercedes. In May 2011, Vodafone Group Plc bought the rest of the shares of Vodafone Essar from Essar Group Ltd with value of $5 billion and became a solely owned of Vodafone Essar. On 1 December 2011, it acquired the Reading based Bluefish Communications Ltd an ICT consultancy company. The acquired operations formed the nucleus of a new Unified Communications and Collaboration practice within its subsidiary Vodafone Global Enterprise, which will focus on implementing strategies and solutions in cloud computing, and strengthen its professional services offering. In April 2012, Vodafone announced an agreement to acquire Cable & Wireless Worldwide (CWW) for 1.04 billion. Vodafone was advised by UBS AG,

while Barclays and Rothschild advised Cable & Wireless. The acquisition will give Vodafone access to CWW's fiber network for businesses, enabling it to take unified

communications solutions to large enterprises in UK and globally; and expand its enterprise service offerings in emerging markets. On 18 June 2012, Cable & Wireless' shareholders voted in favors of the Vodafone offer, exceeding the 75% of shares necessary for the deal to go ahead.