He says that the real driving force behind dislocations is the speed of change of widespread adoption of new approaches especially in areas that have heretofore been stable. While other scientist D. J. Boudreaux (2009) consider that globalization is the advance of human cooperation across national boundaries. Cooperation is describe as a typically taken to involve each participating person’s intention to be part of larger effort.
He also found out that globalisation is a source of rivalry of competition. It’s equally real and important because it’s the vast pattern of cooperation that globalisation spread across our planet.That is to say that without competition would be neither inventions nor innovations. As well all these scientists accepted that globalization is closer integration of all nations, labour movement, technology transfers across international borders and its all about changes as Katsioloudes and S. Hadjidakis (2007) say that this is result of technological process mainly in the areas of information technology, telecommunications, energy, transport and biotechnology as well as a shift in economic policies. Human made these changes of technologies, in other words we can call a human perfection.These researches also reveal that globalization refers to any force that creates an unexpected, uniform sometimes disruptive condition across heretofore-impermeable boundaries within which the relevant conditions were previously varied (W.
H. Mobley 2006). So it also means that human perfection creates those new conditions to other human and because it’s new for them, they calling those conditions uncontrolled. However all these scientist found out different words to describe the main point of definition of globalisation but they also maintain that globalization is not a phenomenon. It is not just some passing trend.It is inevitable that’s why it’s affects everyone. In these days we can see that there is no limits for human mind, its doest feel that all these changes will stop, conversely it’s just taking acceleration.
So it is also hard to say are we in middle of globalization or globalization just started because we can’t see what is waiting for us in the future. 2. Purpose of assignment This assignment is to analyze the actual and potential impacts of globalization on global company – Vodafone. The main purpose of this framework is to integrate theoretical and practical knowledge for analysis of Vodafone. 3. Background of VodafoneVodafone Group plc is a global telecommunications company headquartered in Newbury, United Kingdom. It is the world’s largest mobile telecommunications company measured by revenues and the world’s second-largest measured by subscribers (behind China Mobile), with around 332 million proportionate subscribers as at 30 September 2010.
It operates networks in over 30 countries and has partner networks in over 40 additional countries. It owns 45% of Verizon Wireless, the largest mobile telecommunications company in the United States measured by subscribers (Wikipedia 2010). Despite all these facts, globalization still impacts the company.To become one of the biggest telecommunication companies in the world Vodafone had to implement many strategies and withstand all the impacts. Company found many problems in management in many operations in different countries, the result of that – a lost of a lot of customers. Cultural diversity is another uncontrolled phenomenon which causes many problems with communication, coordination and motivation. After analyzing some articles I discover that Vodafone reached the goals but in many ways the company wasn’t looking for new strategies, they used and still using one strategy for everyone.
. Theoretical review 4. 1 PESTE Analysis PESTE analysis is the evaluation of influence of people and of institutions. P. Stone (2001) strongly believes that this analysis is designed to provide company with a focused framework to assist in analyzing market. He also proposes that PESTE Analysis helping company then it’s come to establish marketing objectives. This analysis will take all results of company’s research and will put them into logical format to ensure that company have considered all the factors that could affect in the market.
Accomplishment of this analysis is that companies can see all difficulties they going true if they choosing that part of market. Companies can prepare them selves for all difficulties with different strategies for it, but in other hand these factors can easily change as example political situation change for company, so companies can lose a lot of moneys because new strategies take many investments, time to prepare and time to realise it. The main factors of PESTE Analysis are: Political, Economic, Social, Technological and Environmental forces. . 1. 1 Political forces These can have a direct impact on all markets. First example is tax policy because that is very important for company to provide probability that taxes can change.
Government stability is important to assess whether a stable political regime, and if could change for the negative or positive consequences for any business. As well a competition policy makes important part like example is any chances for company to become monopolist are there any restrictions for what market share company can hold. 4. 1. 2 Economic forcesThe first important factor is economical growth, what situation is at the moment, like example crisis, when is the end of this period and what steps company will take to change that situation. Other factor is inflation how it affects company’s services and product prices. And the last but very important factor is cyclicality.
Any company needs to asses can they provide they services constantly or the needs are rising just on specific time. 4. 1. 3 Technological forces P. Stone (2001) says that advances in technology have been some of the most important aspects affecting business over the last decade.Companies must consider of the latest available technology regardless of field of business. 4.
1. 4 Social forces Two most important factors are: cultural diversity and the changing social climate. In these days supply exceeds demand, so companies have to analyse the customer needs, because purchase is conditioning by social climate. 4. 1. 5 Environmental forces Many people are considered about environment, they preferred to choose the products which conserve the nature. So it also affects companies to use technology that not polluting the nature.
. 2 SWOT Analysis This analysis provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment in which it operates. It helps companies to see positive sides of business as well as the negative aspects. P. Stone (2001) maintains that a SWOT analysis is the construction of non-financial balance sheet. Accomplishment of this analysis is that companies can build on strength, resolve weakness, exploit opportunities and avoid threats and as well to use an instrument in strategy formulation.On the other hand companies could not be honest to themselves as result they can see more positive sides and less negative aspects.
These aspects can make any strategy weak and unnecessary. The main factors of SWOT analysis are: strength, weakness, opportunities and threats. 4. 2. 1 Strengths A firm’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage (P. Stone 2001; A. Kaleem 2005).
Examples of such strengths include: strong brad names, favourable access to distribution networks and good reputation among customers. . 2. 2 Weakness The absence of certain strengths may be viewed as a weakness. For example, these factors may be considered weaknesses: high cost structure, lack of access to key distribution channels and hard controlled structure (P. Stone 2001; A. Kaleem 2005).
4. 2. 3 Opportunities The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include: arrival of new technologies, an unfulfilled customer need and loosening of regulations (P. Stone 2001; A. Kaleem 2005). 4.
2. 4 ThreatsThe factors that company may or may not have control over that could lead to a decline in business. Examples of such threats include: new regulations, new competitors and increased trade barriers (P. Stone 2001; A. Kaleem 2005). In summary, a PESTE analysis is giving wider perspective on the future and it’s also a scan of external environment. Whereas SWOT analysis is concentrate on the present, what company’s position at the moment and an internal environment becomes centrepiece.
5. The analysis of Vodafone 5. 1 The analysis of Vodafone based upon the PESTE framework 5. 1. Political forces on Vodafone Vodafone has consistently demonstrated a storyline of growth through acquisitions, entering in markets in Eastern Europe, Asia, and South Pacific. Currently Vodafone owns stakes in wireless carriers in Albania, Australia, Belgium, China, Egypt, Fiji, France, Germany, Greece, Hungary, Italy, Japan, Kenya, Malta, the Netherlands, New Zealand, Poland, Portugal, Romania, South Africa, Spain, Sweden, Switzerland, the UK, and the US (D. Hechavarria, 2005).
In many of these countries tax policy is different so need to agree Vodafone is strongly affect by it ass well.First company find difficulties while dealing with taxes, also it takes some time to understand tax policy in some ways company can lose money if it doesn’t make right decision on right time. Storyline of growth shows that company doesn’t have any discomfort with competition policy. On the other hand it took long time to reach these results, so it shows that any of these countries protect their own business people. 5. 1. 2 Economic forces on Vodafone Economic growth factors like business depression, economic boom strongly affect Vodafone.
A decrease or increase of sales can impact company’s personnel, because these factors can increase size of company, like result reducing or growing agencies. It’s also impacts strategy, in business depression Vodafone have to offer new services or products and find new strategies how to save money and reduce the losses. Vodafone issued a heavy debt and floated a lot of around the world to gain the funds needed for auctions in last two years. Inflation as well reduces company’s profit. 5. 1. 3 Technological forces on Vodafone On technological side Vodafone has to be first and provide the market as they want.
As example, in 2001 Vodafone was fallen behind its two larger rivals NTTDoCoMo and KDDI in Japan (M. Fackler and K. Belson, 2005). Vodafone made mistake of believing that features were acceptable in Europe or the United States will be acceptable in Japan as well. But this idea, strategy appeared primitive and clunky in Japan. Consumers here are used to getting new technologies like high-resolution colour screens, two-megapixel cameras and full Internet access a year or two before the rest of the world. As well customers found problems like poor signal and expensive bills.
Japan was the first place where things haven’t worked in Vodafone way – the company had to understand that Japan market is really different from Europe market. 5. 1. 4 Social forces on Vodafone Cultural diversity can cause many problems with communication, coordination and motivation in Vodafone. According to (J. Bustillo et all. , 2008) making cultural change happen it’s a medium-term challenge that requires a committed management team, a detailed understanding of reasons behind employees low morale, a structure approach to addressing those issues, and well a design communication strategy.
Also other scientists (M. Hitt et all. , 2009) strongly believes that no firm has the right to expect changes to be made in the local culture to suit its needs and expectations. Alan Harper Chairman of Vodafone UK Foundation maintain that since Vodafone company differ from being a traditional company, the cultural alignment of people who working for Vodafone is a key issue in sustaining challenger and entrepreneurial mind set. To focus on this cultural alignment, Vodafone gives autonomy to the local entity and reiterate that the local entity did not join a global company like IMB or HB.As well I can find many potential impacts of globalization to Vodafone like adapting the product in this case company’s brand to suit cultural differences in the host culture and as well to adopt the firm’s organizational structure and policies that could fit into the host culture. 5.
1. 5 Environmental forces The past 7 years human start worrying about the nature. Like example prefer for organic products and products that are not contaminating the environment. Vodafone is also encouraging by customers to use technologies that can reduce environmental impacts.Like example, Vodafone Qatar has launched two new environment protection initiatives across all its retail stores in the form of ‘Reload & Recycle Bins’ and ‘Energy Saving’ stickers. Vodafone materials include biodegradable scratch cards, which have been used by Vodafone since it launched prepaid services in September 2009. Also in February this year, Vodafone launched the first Mobile recycling programme in all its retail stores, and in April Vodafone started recycling all unused posters, flyers and brochures that become obsolete at the end of promotions.
In many ways, if company wants to get customers trust, they have no choice to avoid social work. New technologies are extra expenses and will take some time while behalf will comeback to the company. 5. 2 The analysis of Vodafone based upon the SWOT framework 5. 2. 1 Strengths and weaknesses of Vodafone One of the strengths of Vodafone is strong brand name. The world knows this brand, many of customers trust this name, that’s why this company became global.
On the other hand even with strong brand name, Vodafone founds difficulties in new areas.Company played different models of creating company’s identity in the market. Which way Vodafone adapted depends on many factors like one of them is the strength of the brand in that market. In New Zealand it took one night to change from Bellsouth to Vodafone, in Italy only after 2,5 years Omnitel was changed to Omnitel Vodafone. The management judgment of fast or slow rebranding turned on the customer and organizational response of the acquired market and acquired company. Favourable access to distribution networks is also one of the strongest parts of company.Company plants in all Europe, Asia, and South Pacific.
However, it is high cost structure. Vodafone needs a market’s Universal Mobile Telecommunications standard (UMTS) license to be able to provide their services in that region. These licenses are expensive; it is worth 160 billions Euro. 5. 2. 2 Opportunities and threats of Vodafone To keep position as one of the biggest communications network company in the world, Vodafone has to create new products consistently. New technologies that Vodafone is preparing will shock the world.
Like example, new echnologies are: with response/interactive – mobileTV, multiple interworking. Africa is unfulfilled customer at the moment. Vodafone Global Enterprise is helping to transform the way that African businesses participate in today’s fast moving global economy. This country is ready for technology. People believe that these technologies will help transform people’s lives, will bring new prosperity and opportunity to many who have previously been denied access. Threats for Vodafone can be competitor for Apple, at the moment this company is planting in the world.New regulations, like roaming regulation, call termination rates and others, strongly impacts company.
In every country all of these rates are different. Such regulation typically takes the form of industry specific law and regulation covering telecommunications services and general competition (antitrust) law applicable to all activities. Some regulation implements commitments made by governments under the Basic Telecommunications Accord of the World Trade Organisation to facilitate market entry and establish regulatory frameworks.Company has to obey all these regulations even if they change not to the right side. 6. Conclusion S. Tallman (2000) and other scientists strongly believes that the objectives of multinational strategies are much the same as those of any strategy in the larger sense – to build, to protect and exploit unique resources to establish sustained competitive advantage and maximize economic value in the long term.
But different situation requires different strategy. Today research of international business shows that a scan of the internal and external environment is an important part of the strategic planning process.After all these analysis it’s become clear what are the strongest and what are the weakness sides, opportunities and threats of Vodafone, what decisions has to be made in the market. As result of many strategies Vodafone has become the telecommunications leader in Global Systems for Mobile networks (GSM) According to D. Hechavarria (2005), Vodafone’s Success Strategy: 1. Provide superior shareholder returns 2. Delight our customers 3.
Leverage global scale and scope 4. Expand market boundaries 5. Build the best global Vodafone team 6. Be a responsible businessHowever, company made some mistakes as well. They build one strategy and use for all markets. It didn’t work in Japan. Company did not adapt the product to suit cultural differences in the host culture by modifying its characteristics.
F. Cherunilam (2007) founds product adaptation, communications extension strategy. At the moment and in the near future, I think this strategy will suit for Vodafone very well. Under this strategy, essentially thing is that the same promotional message is use abroad as at home but the product is modified to suit the foreign market conditions.This strategy also assumes that the product will serve the same function in foreign markets under different use conditions. A. Harrison at all.
, (2000)argues that with increasing competition both in home and international markets, international firms are becoming culturally more aware and sensitive to their customers’ needs and variations in foreign demand for their products. On the other hand, Vodafone is constantly engaging in new and innovative activity to keep itself ahead of its competitors.It not only invests and acquires its competitors in telecommunications to integrate them into their network to eliminate competition, it also engages in dynamic activities in telecommunications and other industries to advance its position as the world’s leading cellular service provider. Vodafone seeks institutional adaptation by adopting an appropriate organizational structure and policies to fit into the host – culture. An organizational structure in one country may be totally inappropriate in another (Aswathappa, 2008 p. 75; A. Harrison at all.
, 2000). Most other scientists strongly believe that formulate strategies for transforming cultures in organizations is very important. The main job goes to strategic leadership who needs to be transformational if it is to serve the organization. As well transformational leaders must operate from a foundation of high morality and ethical practices and have a fundamental understanding of the highly complex factors that support and make possible collective effort in an organization.They must personally act in accord with productive values and beliefs, and they must teach others to do the same. Equally they must promulgate the culture. The key method strategy leaders should follow to transform cultures is to teach symbolically.
This type of strategy involves the artful crafting of new stories, new symbols, new traditions, and even new humour so that the ambiguities surrounding organizational life can be productively managed by all members of the organization.Without collective understanding-shared networks of revised meaning- the new ways of acting and thinking cannot be internalized by organizational members (J. Cowings, 2009).