Vodafone Developing a Total Communications Strategy in the UK Market

Vodafone Developing a Total Communications Strategy in the UK Market Comparison of the Four Industries in terms of Industry Attractiveness Using Porter’s Five Forces, a comparison of the four industries (fixed line, mobile, television and broadband) can be undertaken to demonstrate their attractiveness. UK customers have more discretion to choose which company to use in the provision of fixed line, mobile and television services, hence these industries are continually registering less profits due to customers’ power. However, the broadband industry is increasingly growing as there are fewer companies offering the services due to huge capital costs involved, hence customers have less power in this industry. The suppliers’ power, reflected by the services and infrastructure offered by British Telecom (BT) to various companies within the sector, is minimal in all the four industries owing to the many regulatory frameworks that have been developed and implemented by Ofcom (Office of Communications). Owing to low suppliers’ powe r, companies such as Vodafone can leverage on the profit potential by using BT’s networks and infrastructure to expand services.Advertising We will write a custom case study sample on Vodafone: Developing a Total Communications Strategy in the UK Market specifically for you for only $16.05 $11/page Learn More From the case, it is clear that the high rivalry between competitors has negatively affected the profit and customer subscription margins in the fixed line, mobile and television industries. However, the broadband industry is still attractive to investors due to minimal rivalry among competitors. However, as the fixed line industry faces a minimal threat of new entrants owing to the fact that customers are increasingly using newer technologies, the other three industries – mobile, television and broadband – face real threats of new entrants not only because of their potential for continued growth and profitability, but also due to the ongoing acquisitions and partnerships affecting these industries. Lastly, in analyzing threat of substitute products, it can be argued that both the mobile and television industries face this threat as mobile providers bring into the market new mobile devices with enhanced capacity to roll out all the services in one single gadget, and as TV service providers look for innovative products that may enhance customers’ experiences. These opportunities provide adequate space for the proliferation of substitute products within the communications sector. However, the broadband industry may not attract such a threat due to the high capital costs involved in rolling out its services. Similarly, the fixed line industry may not attract substitutes due to the nature of infrastructure and networks used. Key Drivers of Change in the Communication Industry From the case scenario, the key drivers of change in the communication industry include technological advancements, acquisitions, pr oducts and services diversification, willingness to collaborate, speed, flexibility and competition. In technological changes, it is clear that the digital revolution has forced most companies in the UK’s communication industry to reassess not only how to effectively and efficiently provide traditional voice services to their existing customers, but emerging high-band data, television and video services as well.Advertising Looking for case study on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Additionally, a number of major players in the industry are increasingly acquiring smaller firms to expand their customer base, reach and profitability. Surprisingly, a few major players are willing to partner or even merge to sustain leadership and competitiveness, while benefiting immensely form the economies of scale as well as shared infrastructure. Products and services diversification, in my view, is acting as a key driver to change for allowing the expansion of customer base with tailor-made products and services that satisfy specific needs and expectations of the customers. Moving on, it is clear that most companies operating in the industry are currently expending huge financial resources to develop fast and flexible networks, or to acquire other firms with such networks, with the view to enhancing customer value propositions and satisfaction. Vodafone, for example, has initiated a project to upgrade its Internet network from 3G to 4G to achieve faster speeds and flexibility. Lastly, there is intense competition within the industry for customers and market share, implying that companies must continually shift their strategies to remain competitive. The impact of these drivers will reflect in terms of a more streamlined sector, with companies attempting to buddle their services together and market them to customers in one package. Change in the UK’s Communication Industry From the case scenario, it is clear that the UK’s communication industry is increasingly changing from the provision of traditional voice services using the fixed line industry to the adoption and expansion of digitised functions with capacity to provide data and video to customers. Consequently, as customer figures and profit margins for voice services drop over the years, it is expected that technology will play a major role in developing a framework that will enable industry players to expand into the mobile, television and broadband industries. More importantly, it is envisaged that more operators will make huge investments in the broadband industry due to its attractiveness (see Porter’s analysis), and also due to the fact that it has the capacity for continued growth. Consequently, by 2015, more companies operating in the UK’s communication industry will have developed capacities to roll out broadband Internet services in large scale as all evidence points to the fact that the broadband industry can also be used to provide mobile and digital television services. It is expected that services such as cable television and radio may become obsolete by 2015 as technological advancements, stiff competition from new service providers, proliferation of IP-based networks and mounting penetration of broadband Internet services drive companies operating in the UK’s communication industry to converge their services. However, it is highly unlikely that the fixed line industry will become obsolete by 2015, though profit margins in this industry are likely to continue plummeting into the future.Advertising We will write a custom case study sample on Vodafone: Developing a Total Communications Strategy in the UK Market specifically for you for only $16.05 $11/page Learn More Overall, the industry is expected to be more attractive as services are converged not only due to opening up of many new opportunities for existing service providers and entrepreneurs (e.g., a mobile phone operator will have the capacity to sell digital music and movies using broadband Internet), but also due to improvements in customer satisfaction and retention (e.g., customers will be more satisfied for purchasing various services in a low-cost package). Vodafone’s Strategy Going into the future, Vodafone should change its strategies to reflect the realities on the ground, especially with regard to convergence of services in the UK’s communication’s sector. To achieve its objective of being a ‘communications leader in an increasingly connected world’, the company must not only invest heavily in new and emerging communication technologies, but must be ready to partner with other like-minded companies in the pursuit of more customers and opportunities for continued growth, competitiveness and sustainability. The concept of partnering with other companies or even acquiring small firms within th e industry, in my view, is a ripe one for Vodafone if it expects to rise into the leadership position. Additionally, partnering and acquisitions will ensure the company expands its networks and customer base without having to make huge capital investments in network infrastructure. Additionally, Vodafone stands at a better position to become the communications leader if its drives its operational performance through customer value enhancement to satisfy and retain existing customers while looking out for new ones, pursue growth and expansion opportunities in total communications (mobile, television and broadband) focussed on service delivery to customers rather, pursue emerging markets particularly in developing countries to increase customer base and revenue streams, and strengthen its capital discipline to ensure that more money is freed up for meaningful investments.