Introduction:-
Vodafone is a leading multinational telecommunication player with a strong presence in several leading markets of the world. Headquartered in UK, Vodafone has a large base of fixed broadband and mobile customers in several nations. India is also a leading market of Vodafone mobile services with 223 million customers. The company has operations in 25 countries and outside these countries, it has extended its services through partnerships with local operators in several markets. The company also offers roaming coverage in 144 countries. Vodafone is an innovative company which is also known for its excellent marketing. Â To acquire faster growth the company is focusing on customer engagement and digitization. It aims to become a leader in mobile as well as converged services. The telecommunication industry has seen major changes in the recent years and apart from the growing technology needs of people and enterprises, there are social and regulatory changes affecting the industry.
Vodafone is a multinational company and there are several factors in the international market that affect its sales and profitability. Learn more about how these forces affect Vodafone through this Pestel analysis.
Political:-
Political forces have grown in relevance in the context of international business in the twenty first century. The level of government intervention in the world of business globally has grown leading to higher pressure on international brands. Overall political environment of a country also affects its economic environment and trade.  Government’s attitude towards businesses and tax regimes also affect businesses. The main markets of Vodafone are Europe and Asia Pacific as well as Africa and MIddle East. The level of political stability in these regions affects sales and profitability. While the demand for technology and technological services around the world has grown in this decade, the level of government control and oversight have also grown. The telecom industry is also facing growing pressure due to increased government control.
Economic:-
Economic factors have always remained at the core in the context of international business. Performance of the global and the regional economies have a direct impact on the performance of international technology businesses. The demand for data and mobile services has grown in the recent years. However, everything depends upon consumer demand and purchasing ability. Economic performance of nations affects these things directly. Some of the main markets of Vodafone are India, Uk, Spain and Italy.
The economies of these nations have been performing well and that of Europe as well. Brexit has created some pressures which will continue to affect Vodafone’s profitability in UK. Economic factors like economic activity in a specific country or region as well as level of employment affect the purchasing power of people living in that area which in turn affects the sales and profitability of brands like Vodafone. Moreover, growing competition has also made the role of economic factors in the field of international business grow. Overall, economic factors cannot and must not be ignored in terms of business and business strategy. India is a fast growing economy and offers excellent opportunities of growth for Vodafone.
Social:-
The role and importance of sociocultural factors also in the context of business has kept growing. Most large businesses have understood the centrality of sociocultural factors in the context of business and how they can affect sales and profitability in specific regions. Changing social trends and people’s lifestyles affect people’s buying habits. Over time consumption patterns and preferences of people in various regions of the world have changed a lot. Â
Technology firms need to identify these changes and accordingly update their services mix. Globally, internet penetration has grown and both individual and enterprise users want faster connections. A larger number of people now spend a large part of their daily time online for work as well as entertainment. Growth in demand for internet based services has proved beneficial for international telecom brands like Vodafone. More and more people are shopping online and the role of internet in the lives of people has grown a lot with social media too. Apart from these the role of social factors in terms of marketing has also become important and brands need to mark this while promoting their brand and services in specific regions of the world.
Technological:-
Vodafone is a telecom brand and technology plays a central role in its business operations. The company has grown its range of services in the recent years based upon the growing demand of both individual and enterprise customers. However, growing role of user experience has forced Vodafone to focus on this aspect as well. As a result, the company is using digital technology to provide higher user convenience and to grow user engagement. Its my Vodafone app and website can be used to access the range of services that Vodafone offers. These act as both marketing and customer acquisition channels for the brand. Vodafone also uses digital technology for promotions. Overall, while the role of technology has grown better technology is also an important differentiator in the telecom industry since consumers’ need for data and connectivity has grown fast in this decade.
Environmental:-
Environment and sustainability have become important focus areas for businesses in the twenty first century. Companies are investing in reducing their carbon footprint as well as making their business processes sustainable. On the one hand, while it is important for creating a socially responsible image, on the other governments around the world have also formed strict laws that discourage irresponsible practices. Like the most other large organizations in the world, Vodafone is also focusing on managing its carbon footprint and environmental impact.
Apart from that, the organization also works to help its customers maximize their efficiency while having minimum impact on the environment. It has robust management systems in place to help it minimize its environmental impact and improve performance continually. It recycles and reuses most of the electronic waste generated during the operations of its business. The company also has excellent management systems in place to manage its office waste and water consumption. Another important areas is compliance with local regulations throughout the world. Compliance with environmental laws is important for multinational organizations like Vodafone since noncompliance can result in hefty fines.
Legal :-
Law and legal factors have also acquired a very important role in the world of business. Around the world, governments and law enforcement agencies have increased the level of control and oversight of businesses. Growing legal and regulatory pressures can make growth difficult for international businesses. From tax to labor and business practices in other areas including environment, businesses have to be mindful of compliance in each area. Noncompliance can result in enormous fines. Government agencies including EU have increased the level of fines that could be levied upon the violators in any of the above mentioned areas earlier. Vodafone has made it an important focus area in its business strategy so as to avoid any chances of violation and non-compliance.
- Sources:
- Vodafone Annual Report 2018.