Planning for Growth of Vodafone Company Report Paper Example

Introduction

For this specific report, the focus is on the strategies that can be used in expanding Vodafone company in its role of offering its services on the global scale. As a junior manager, my operations will include collaboration with mentor Mr. Navohan who is the head of the department of strategic management. Some considerations have been investigated for growing Vodafone to an international level business.The various that services that are currently being offered by Vodafone include voice and broadband, messaging, offering development in its 3G networks, as well as the capabilities of various handsets. Its global expansion strategies include becoming the leader of providing the stated services to the United States, Europe, the Asian Pacific, and the Middle East.

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In this case, the main concern in on coming up with strategies for future expansion of Vodafone. The strategies that are potential in the expansion are the concept of competitive advantage and internationalization. The importance of launching Vodafone in many countries is to make it enjoy benefit from profitability, and realizing greater revenues by the approach of operating a better business internationally.

LO1: Critical Considerations for Growth options

Among the various considerations that need to be evaluated to grow a small scale business is by first determining the structure of the company. There are many benefits to decide on the correct structure of the business. Should the business serve the private lot only, or should the business be international? There is a need to answer the question of whether a few individuals will own the company or if people will own it (Hatcher, 2018). About this, the decision that is arrived at has a significant impact on the structure of the business to use. When the structure has been decided early, helps in increasing the efficiency of the business in the future.

P1: Three considerations on organization context

For this specific case, the type of structure selected is running a service company owned by people. The company will also be grown to an international level. For this specific decision, it is worth identifying that there are many benefits that the company can experience when people own it, and it is being scaled to a global company (Hatcher, 2018). On the other hand, there are some risks that the Company is made to be a subject to.

Competitive advantage as a foundation for growth

Companies that thrive in the global market must position itself at the right competitive advantage. The make the company attain a competitive edge, and there is a need to build loyalty. The brand should be such that it has an emotional attachment. In this way, the customers are maintained and convinced to demand the services and the products of the company. To build a sustainable competitive advantage, the approach of using porters five forces is essential. The focus will be on identifying the various product strategies, reshaping of the core competencies as well as making use of technologies that are unique in their way. The other approach that can be applied in this is by acquiring intellectual property that moves business forward (Lenssen & Lenssen, 2018). Also, The SWOT analysis is essential as it will help in discovering the essential elements of the competitive advantage. For this specific approach, it is straightforward for the individual to be in the position of distinguishing the gaps that exist in the internal and external environments. By doing this, opportunities, weaknesses, and strengths are identified, and appropriate actions are taken. Moreover, the concept of competitive advantage is affected by the idea of resources available for the firm. This is what it refers to a resource-based view of the company.

Competitive advantage Using PESTEL in an analysis of the environment

Vodafone PESTEL analysis is a valuable tool that will be used in analyzing the macro situation of the organization. In this analysis, political, economic, social and technological factors are investigated. The investigation of these factors is essential as it will help in identifying the gaps that might be existing and proper responses getting a basis.

The political factors that affect Vodafone have been noted to be playing a significant role in determining the factors that have an effect of changing the profitability of the company in given countries. The company is operating on wireless communication in many countries. This being the case, when Vodafone will be expanded, the fact is that there is a high possibility that will expose itself to various types of political risks and environment. On economic factors, the Vodafone company will be affected by savings rate, inflation rate, foreign exchange rates, and interest rate (Hopkinson, Zils, Hawkins, & Roper, 2018). Other risks that the Vodafone will be exposing itself is by international governments making interventions in technology and the related market where Vodafone will be operating. The other factor that will affect the growth of Vodafone is the quality of the infrastructure in the wireless communication industry. The other notable economic factor will be the labor costs as well as productivity in the economy. The social factors that will affect operations of Vodafone by growing to international level are on the culture of the society. On the side of the technological factors, the activities of Vodafone will be profoundly impacted as technology is experiencing advancements daily. Technology will mainly affect the way the services will be offered to the public (Hopkinson, Zils, Hawkins, & Roper, 2018). For environmental factors, Vodafone will be affected by changing markets due to differing standards. Such a scenario has an effect of tampering with the profitability of the organization at a great measure. Such factors include attitudes towards support to energy resources, climate change, recycling, and waste management in the technology sector. On the legal considerations, Vodafone will have affected by data protection, health and safety law, employment law, discrimination law, and consumer protection.

P2: Evaluation of opportunities for growth Ansoff's growth vector matrix

To be in the position of portraying alternative corporate growth opportunities for the SME, Ansoff's growth vector matrix can be applied. The matrix is concerned with the presentation of the company present and potential products and markets. It is a valuable tool that can be used in considering the various methods that can be used in growing the already existing products as well as new products. Below is a representation of the Ansoff Matrix.

The matrix uses four growth strategies to help the management in their roles. One strategy that is included in the matrix is the of market penetration. In this specific strategy, the firm is aimed at achieving growth by the approach of using the existing products. The overall aim for this specific case, it will entail using the strategy of expanding the market share of the existing products. The second strategy that is incorporated in the Ashoff's vector matrix is by developing the market (Hopkinson, Zils, Hawkins, & Roper, 2018). In this approach, the aim will be looking for development by targeting the common goods to new market segments. Thirdly, the SME growth will also be grown by the approach of focusing on the development of the product.

Principal Risk Factors for a company that is being grown to a global firm

One of the risks is that there is a challenge for the company to step out of the native market, and then having the ability to quantify the downside risk followed by implementing the most appropriate strategy in each of the new markets (Zwilling, 2016). Another threat is on the fact that it is much difficult for the managers of the business to be in the position of predicting sudden changes that take place due to large and frequent economic swings.

Another risk that can be a challenge to growing business is on the way exchange rates changes. The fact being that the company will be providing its services to the global scale, the currency fluctuations can make the company to cause significant losses. A large number of currency swings around managing of transactions, project futures and even the efforts of specifying terms of contracts made (Hopkinson, Zils, Hawkins, & Roper, 2018). This being the case, it is essential for the company to have already prepared strategies on how to deal with the risk of fluctuations of the currency. One of the strategies that can be used is learning how to lock in exchange rates, collecting transactions immediately, as well as paying the indigenous organisations purposing to hedge the risks.

When a company is growing to a global scale, there is also a risk of the business coming across various cultures that affect its role and responsibilities. It is worth noting that cultural traditions have the effect of dictating the purposes of business. The argument here is that as companies grow, their decision making is affected by the local culture (Hopkinson, Zils, Hawkins, & Roper, 2018). The local culture has also been found to change how the company views its market share. To respond to this, as a leader in a growing company, it is essential to come up with the best strategy

LO2: Sources of Funds and Their implication to the business

The reality is that there exist very many alternatives that can be a source of capital or finance for the company. To avoid adverse effects, it is vital for business management to decide on the right source as well as the right mix of investments. Notably, the activity of determining the right cause and the right combination of the origins of funds for the business is a challenge (Kimmons, 2019). To overcome this challenge, the strategy that needs to be applied is that of making use of the right professionals in making decisions regarding the source of financing for a business that wants to grow to global scale.

P3: Potential sources of funding available to business, benefits, and drawback.

One of the best sources of funds for a company that is operating globally is through debenture. A debenture is an instance of a loan between a lender and a company. Debentures are much related to the bonds by the state (Kimmons, 2019). The only difference is that any particular collateral does not secure them. The guarantee is the total gains of the company. Another source of fund for the company is the government grants. Some governments offer concessions to distance business (Kimmons,2019). Some states provide grants only to legitimate businesses that have the aim of expanding. Conventional loans are the other source of finances for a company that is increasing. Conventional loans are provided for companies that are growing and expanding to new markets. The advantage associated with these types of loans is that they have little interest rates. The disadvantage they have is that they require collaterals as security.

Recommendation on the funding sources for the business

It takes much time that could result in no success when the funding is targeted to be gotten from a foreign distributor. On the other hand, it is also god to strive I getting an international distributor as in doing so, it will be easy to sell the products or the services that are being offered to the clients. To avoid the related risks of getting a finding from a foreign distributor, it is a wise approach to make use of an international business consultant. Consultants are in the position of providing valuable help at the time of evaluating the foreign distributor. In addition to this, debentures and government funding are the other two types of financing that are im...