Introduction :-
Vodafone is a leading telecom company with operations mainly in Europe, Asia Pacific, Africa and Middle East. India is increasingly growing in strategic importance as a core market for Vodafone. In 2018, the company had 223 million Vodafone mobile customers in India. Vodafone is headquartered in United Kingdom. Other major market of Vodafone include Italy, Spain and UK. Apart from being a leader in mobile and fixed services, Vodafone is also focusing on being a leader in converged services.
The telecom industry is marked by heavy competition and there are several major players battling for market share in major markets including India and UK. Vodafone does not have a strong presence in US which is also a leading market for international telecom players. However, the company invests a lot in innovation. It is focusing on digitization for customer engagement and faster growth. Read more about Vodafone in this SWOT analysis highlighting the strengths, weaknesses, opportunities and threats before Vodafone.
Strengths:
Brand equity:-
Brand equity is an important strength for any leading brand. High brand equity is a sign of trust and reliability. Vodafone is a popular and customer centric brand that consumers in various corners of the world trust. It is also the reason that the company has a large customer base in various markets from Europe to Asia. India has the highest number of Vodafone customers at 223 millions.
Marketing:-
Vodafone places heavy focus on marketing and customer convenience. The brand invests heavily in marketing and uses several marketing channels for marketing and promotions of its products and services. Its zoozoo ads gave been highly popular in various countries. These ads entertain and engage at the same time. Apart from the zoozoo ads, the company also uses digital channels including Vodafone app and its website for customer acquisition and marketing. In this way, the company has been able to create high level brand recognition which has led to easier brand recall and higher sales.
Large range of products/services:-
Vodafone offers a very large range of products and services. Apart from the individual customers, it has also brought products for enterprise customers. The company offers both mobile and fixed services to a large segment of customers mainly in Asia Pacific and Europe. Some of its major markets also lie in Africa and Middle East.
Strong presence in Asia pacific:-
Vodafone has maintained a strong presence in the Asia Pacific region. The fast growth markets in Asia Pacific including India and other markets offer huge growth potential for international telecom brands like Vodafone. Vodafone has maintained strong presence in Asia Pacific. Particularly, in the Indian market it is a leading player with a very large customer base. Its number of mobile customers in India in 2018 reached 223 millions. In the coming years, its customer base in India is expected to grow larger. Apart from marketing and customer acquisition channels, the company is focusing on growing customer engagement through digital channels.
Technological innovation:-
The heavy focus of Vodafone on technological innovation is also an important strength of the brand. Apart from spending to strengthen its core services, the brand is also investing in emerging technologies to grow its customer base, market share and revenue. During the past five years, it has spent more than €80 Bn on strengthening its technology and infrastructure.
Read: Vodafone Important Statistics
Weaknesses:-
Declining mobile customers in Europe :-
Despite the heavy focus of Vodafone on technological innovation and growth, the company’s customer base in some key markets and particularly Europe has declined. The competition in the industry has kept growing stronger and other brands are also investing in marketing and customer acquisition. while Vodafone’s position in most European markets is still strong and it is a leading player in the European market, the company will need to reverse this trend to retain its position.
Weak position in US : –
Despite the strong technological infrastructure, Vodafone is not a leading player in US. US is a leading telecom market and can be a major source of revenue. However, while Vodafone’s position is strong in Europe, Asia Pacific and Africa, the company has not been able to find growth in US.
Opportunities:-
Customer engagement :-
Growth of modern technologies including AI and digital technology offers immense potential for growth. These technologies can be used to drive customer engagement higher and to design better and more engaging customer experiences that help to reduce churn rate and grow market share. Customer experience has grown central to marketing and promotions in the 21st century.
Digital marketing :-
Digital marketing can help Vodafone find faster growth. The company has in the recent years grown its investment in digital technology. It is using its Vodafone app and website to grow its marketing reach and to engage users better. However, the company should also use social media and other more channels to grow its reach among its users.
Technology & Innovation :-
Investing in technological innovation can help companies like Vodafone find faster growth and grow their customer base in various markets. 5G is going to be the next game changer in the world of telecommunication. Vodafone is investing in this area. Apart from it, there are other emerging technologies too investing in which would prove profitable for the brand.
Threats:-
Competition :-
Growing competition in the telecommunication industry is a major threat for Vodafone. In some of the important European markets, the brand lost market share, revenue and customers in 2018 because of the growing penetration of competitors. While India is one of the core markets of Vodafone, there too the penetration of competing players has grown and Vodafone would need to focus upon its pricing, marketing and customer engagement to grow its customer base.
Regulatory threats :-
Higher level of regulation in the telecom industry has become a threat to the telecom players. While it can be a challenge for faster growth compliance related pressures are also driving the operational costs higher for brands like Vodafone. In several markets including India, the regulatory pressures took a toll on its revenue in 2018. Regulatory pressures restrict growth and Vodafone is entering into new partnerships to overcome the regulatory challenge.
Uncertainties caused due to Brexit: –
Brexit has caused significant uncertainty for brands like Vodafone. While it might not have significant effect on markets outside European Union, still Vodafone’s operations could be significantly affected. Vodafone has readied a special team that will focus upon the implications of Brexit on Vodafone’s operations. However, still there is a lot of confusion and uncertainty over Brexit and it can affect Vodafone’s operations in several ways.
Conclusion:-
Vodafone is a leading international player in the telecom industry. Its leading markets are Asia and Europe. The company is focusing on marketing and customer engagement to grow its customer base and revenue. However, while the growth and emergence of new technologies including IoT, 5G and digital technology marks the growth in number of opportunities, there are several important challenges before Vodafone in the international market. Regulatory challenges and growing competition are driving operational costs higher and creating pressure on revenue. In such an environment while the existing strengths of Vodafone have helped it navigate through difficult waters, its growth in the net years will require heavier focus on marketing and customer engagement. Vodafone has expanded its range of services and is a popular provider of mobile, fixed and converged services. Its use of digital technology for superior customer experience and improved marketing is also expected to bear significant results in near future.
Vodafone Annual Report 2018