Marketing Module

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The organisation selected for this report is Vodafone, a UK based Telecommunications Company that is one of the top players in the global telecommunications market. This report details the macro environment factors, analysis of competitors, customers, markets and type of segmentations Vodafone used in the international arena. Further, it critically evaluates the strategies by using Porter’s five forces competitive model over Vodafone. Macro Environment – PEST Analysis PEST analysis is an important tool for every company because it can provide an outline of the external environment where the company’s business is positioned. It can also help in developing the value of the company and form a business strategy. Political Political aspects can affect a company’s business in various ways. Every company must abide by the rules and regulations of the country where it operates. The regulations can be the country’s law and anti–trust law, which is applicable to all actions of a company. Vodafone’s major business operations are situated in EU countries. The EU countries passed the ‘EU Regulatory Framework’ for telecommunications companies in the year 2002. The main objective of this law is to support fair competition in the telecommunications market. Vodafone also has to abide by the ‘EU Regulatory Framework,’ which has had great impact on the business of Vodafone. For example, Vodafone was compelled to decrease the ‘mobile termination rate’ because of the law of EU nations (Saplitsa, 2008). Another key aspect of the political environment was the spectrum regulation. The modernisation of spectrum regulations of EU had affected Vodafone’s business. In 2005, the EU Commission passed a scheme that permits holders to buy and sell spectrum within the telecommunications market and develop coordination among different brands. Due to the new spectrum policy, Vodafone faced risks related to the price of spectrum, risk of restitution of existing spectrum and difficulties in licensing (Saplitsa, 2008). Economic Adverse economic changes – i.e. a slowdown or recession – in any country can result in less demand for existing and new business services. Difficult financial conditions often lead customers to delay any purchasing decisions including those related to telecommunications services. Decreasing their optional spending, people tend to make fewer calls and avoid extras such as data or broadband services. Such decisions in a tough economic environment can severely impact company sales. A country’s economic condition as well as people’s purchasing power can be measured by the rate of GDP (Vodafone Limited, 2010). In the year 2009, the economic troubles of three major EU nations (Spain, Italy and Greece) resulted in poor performance of Vodafone and also led to reduction of the termination rates. On the other hand, the financial recovery of northern EU market helped to reduce the revenue loss of Vodafone from -3.8% in the