vodafone ireland slides final 121211
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Vodafone Ireland – Management & Strategy Review
Astrid Malachewitz, Claire Egan, Gavin Hannon & Isabel Toland
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Internal Analysis
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The Vodafone Vision – To be the world's mobile communications leader
Vodafone Group
Passion For Our People
Vodafone Group is rated the fifth most trusted brand in the world in the Brand Finance Global 500
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Employ 84,990 people worldwide, with 1,300 employed by Vodafone Ireland
Vertical Structure – move towards flatter architecture
Group Organisation
CEO CFO
Europe AMAP Technology Commercial Investments
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Market share of 41% in Ireland but under threat
Market & Distribution
Distribution via:◦ 35 Vodafone Retail stores◦ Carphone Warehouse ◦ Various smaller retailers◦ Online shop
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Competitive landscape means price plans are similar across the board
Pricing
Price Plan Comparisons
Vodafone Ireland O2 3 Mobile eMobile
Pre-Pay per monthFree calls & texts to Vodafone mobiles plus internet - €30
Unlimited calls and texts to O2 and internet - €29.99
Unlimited calls to 3, unlimited texts to any network, unlimited internet browsing - €20
350 any network mins, 350 any network texts, 1GB data, unlimited landline calls - €30
Bill Pay per month (18 month contract)
150 mins, 150 texts, 1 GB data, free Vodafone to Vodafone calls and texts - €45
Free O2 calls & texts, 700MB data, 250 mins and 250 texts - €40
350 mins OR 700 texts, unlimited data, 1 free add-on - €40
300 mins, 300 texts, unlimited landline calls, 3GB data - €49
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Vodafone Cherry Points rewards pre-pay customers
Powerful advertising focussed on bringing people together
Website weak in user-friendliness
“Our network, your playground”
Promotion
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Heavy investment in 3G technology HSPA+ Dual Carrier Technology
99% coverage
High speed capability
“Best for Smartphones”
Innovation
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Supply Chain Supply Chain: 4% lower than peers Vodafone’s six performance pillars for
suppliers
Sustainability Financial Stability
Technology Quality Management
Commercial Performance
Delivery Capability
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Financial Performance
Gross Profit
Margin
Net Profit
Margin
010203040506070
20102009
Asset Turnover
Sales Revenue to Capital Employed
0
0.5
1
1.5
2
20102009
Decrease in profitability & efficiency between 2009 and 2010
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Corporate Social Responsibility - o Chambers Ireland Outstanding Achievement in CSR
award 2010 for reduction of carbon emissions ahead of schedule and targets
Community Outreach Programs- o The Vodafone Ireland Foundation o World of Difference programme o Sponsorship of the Dublin GAA
CSR & Community Involvement
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External Analysis
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"Four operators and four million people is about as competitive as this market can get." - Jeroen Hoencamp, CEO Vodafone Ireland
More feature rich phones
Mobile Number Portability (MNP)
Mobile Virtual Network Operators
COMPETITIVE LANDSCAPE
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PORTER Analysis
Suppliers Power
Sub
stit
ute
s
Buyers
Pow
er
New Entrants
STRONG BUYER POWERLow switching costStandardised products
LOW THREAT NEW ENTRANTSCapital Investment factors prohibit new entrantsResources of existing operators makes new entrants unlikelyLOW THREAT SUBSTITUTESSkype & VoIP not yet a threatMVNO’s threat but involve partnerships
STRONG SUPPLIER POWERFew suppliers dominate - Nokia, Samsung, LGGreater capital than operatorsBrand Centric purchasing
Intense Existing Rivalry
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• Cost Cutting, Infrastructure policies cutPolitical
• Cost-conscious customer baseEconomic
• Demographic shiftSocio Cultural
• High uptake of new technology, Next Generation Networks coming fastTechnological
• Costs outweighing environmental concerns, Green agenda now expected from organisationsEnvironmental
• MNP regulations, Roaming ChargesLegal
PESTEL Analysis
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Competitive Advantage - SWOT
THREATS
• Falling ARPU• Cost Consciousness• High Penetration • Low Differentiation
• Competition• Lack of capital
OPPORTUNITIES
• Consumer Attitudes • Population Trends -
Younger – High Technology Uptake
Older – Revenue potential• Technology Trends
WEAKNESSES
• Market share is gradually decreasing
• Lack of focus on churn rates•Weak website in comparison
to rivals
STRENGTHS
• Strong Brand Equity• Advanced technology &
focus on innovation• Lower production costs
compared with rivals• Competitive pricing• Commitment to CSR
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Vodafone are efficient and effective in:◦ Strength of brand◦ Market penetration◦ Commitment to CSR◦ Product development Price plans
Vodafone are innovative in:◦ Product development◦ Sponsorship◦ Commitment to sustainability
Vodafone achieve high quality in:
◦ Network coverage and speed
Vodafone achieve responsiveness to customers in:
◦ Providing tailored packages◦ Cherry points rewards scheme◦ Wide range of handsets
COMPETITIVE ADVANTAGE
The company cited its ‘Home of the Smartphone’
strategy as being pivotal to sustained growth in its
smartphone base, which now consists of 530,000
users
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Strategic Recommendations
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STRATEGIC OBJECTIVES
Maintain market leadership
Grow Customer base
Lead the way in Next Generation Networks
CREATE A SUSTAINED COMPETITIVE ADVANTAGE
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STRATEGIC RECOMMENDATIONS – Cost Leadership through
value & Differentiation
Combined Strategy
- Cost leadership (best value) in Vodafone operations and bundles
- Differentiation in Vodafone marketing and technological developments
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Strategic Objective – Cost Leadership through greater value for our customers over our competitors
Implementation ◦ Continue to develop value rich bundles◦ Implement & promote Vodafone VIP rewards scheme
for post paid customers ◦ Recognise potential market in Ireland is varied in its
requirements◦ Focus groups for best bundle plans◦ More user friendly webpage
STRATEGIC RECOMMENDATIONS – Cost Leadership through value
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Strategic Objective – Differentiation of Vodafone offerings by targeting of older audiences
Implementation – ◦ Target advertising to older audiences ◦ Shift point of sale to be more inviting to older
ages groups
STRATEGIC RECOMMENDATIONS Differentiation
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Strategic Objective – Differentiation of Vodafone offerings by becoming the home of innovation and a technology leader
Implementation – ◦ Maintain home of the Smartphone strategy ◦ Look into multi SIM applications◦ Become a part of the process for Next Generation
Networks in Ireland
STRATEGIC RECOMMENDATIONS Differentiation
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Vodafone Ireland is currently facing many challenges There are plays being made for the Vodafone Market
Leadership position
Strategy ◦ Aggressive and focused◦ Utilises strengths in technology & innovation
Implementation–◦ Leadership in value add and cost reductions◦ Address the neglected older demographics◦ Drive the progress of Next Generation Networks throughout
Ireland
CONCLUSIONS
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◦ Strategic Objectives must be TARGETED
WELL COMMUNICATED
AGREED
MAKE IT WORK
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QUESTIONS