Vodafone Ireland – Management & Strategy Review

Astrid Malachewitz, Claire Egan, Gavin Hannon & Isabel Toland

Internal Analysis

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

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

Market share of 41% in Ireland but under threat

Market & Distribution

Distribution via:◦ 35 Vodafone Retail stores◦ Carphone Warehouse ◦ Various smaller retailers◦ Online shop

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

Vodafone Cherry Points rewards pre-pay customers

Powerful advertising focussed on bringing people together

Website weak in user-friendliness

“Our network, your playground”

Promotion

Heavy investment in 3G technology HSPA+ Dual Carrier Technology

99% coverage

High speed capability

“Best for Smartphones”

Innovation

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

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

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

External Analysis

"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

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

• 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

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

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

Strategic Recommendations

STRATEGIC OBJECTIVES

Maintain market leadership

Grow Customer base

Lead the way in Next Generation Networks

CREATE A SUSTAINED COMPETITIVE ADVANTAGE

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

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

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

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

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

◦ Strategic Objectives must be TARGETED

WELL COMMUNICATED

AGREED

MAKE IT WORK

QUESTIONS