Political: the development of freedom of movement and trade in the European Union has led to greater levels of competition on European routes coupled with increased movement of people.
Technological: modern aircraft are safer and more economic to run than in the past making possible cheap air travel.
Before creating business plans or when evaluating existing ones it is important to 'scan' the external environment. This takes the form of a SLEPT analysis, i.e. an investigation of the Social, Legal, Economic, Political, and Technological influences on a business. In addition it is also important to be aware of the actions of your competitors. These forces are continually in a state of change. Social factors relate to pattern of behaviour, tastes, and lifestyles. A major component of this is a change in consumer behaviour resulting from changes in fashions and styles. The age structure of the population also alters over time (currently we have an ageing population). An understanding of social change gives business a better feel for the future market situation.
Laws are continually being updated in a wide range of areas, e.g. consumer protection legislation, environmental legislation, health & safety and employment law, etc. Businesses need to take a pro-active approach and be ahead of these changes, rather than hurriedly making alterations to products and processes in a reactive way.
Economic changes are closely related to social ones. The economy goes through a series of fluctuations associated with general booms and slumps in economic activity. In a boom nearly all businesses benefit and in a slump most lose out. Other economic changes that affect business include changes in the interest rate, wage rates, and the rate of inflation (i.e. general level of increase in prices). Businesses will be more encouraged to expand and take risks when economic conditions are right, e.g. low interest rates and rising demand.
Political changes relate to changes in government influence. In recent years these changes have been particularly significant because as members of the European Union we have to adopt directives and regulations created by the EU which then become part of UK law. Political changes are closely tied up with legal changes.
Changes in technology have also become particularly significant in the post-millennium world. This is particularly true in terms of modern communication technologies. The creation of databases and electronic communications have enabled vast quantities of information to be shared and quickly distributed in a modern company enabling vast cost reductions, and often improvements in service. Organisations need to be aware of the latest relevant technologies for their business and to surf the wave of change.
SLEPT analysis is one of these tools and which looks at changes in five areas:
Social - trends in society
Legal - legal restrictions and considerations
Economic - the health of the economy, inflation, etc
Political - government policy
Technological - developments in computing, etc.
The following sections provide some examples of each factor, which are relevant to Vodafone.
Social factors
Society is concerned about under 18s being at risk. Parents may have concerns about their children being contacted (using mobile phones) by paedophiles or other adults. Society is also concerned about adult content being available via mobile phones to under 18s. Adult content includes gambling, violent games, erotic material etc. Further issues related to 'social' include the rise of mobile phone theft.
Legal factors
Some laws regulate all businesses e.g. The Sale of Goods Act 1974 stating all products must be fit for the purpose they are intended. A mobile phone must therefore work. Certain laws are created to regulate particular industries. Examples include the ban on using holding a phone while driving introduced in 2003.
Independent industry regulatory body:
OFCOM - the Office of Communications. OFCOM is the independent body for regulating the communication industry - www.ofcom.org.uk.
Vodafone goes beyond government regulation, working with its competitors in self-regulation. However to retain its leading position in the industry Vodafone believes it must exceed both legal regulations and industry self-regulation.
Economic factors
The state of the economy, for example levels of growth can impact companies. Companies' activities also contribute to the overall economy. Companies should remain true to their ethical values. If they do not, customers may question the company's beliefs.
Political factors
Government policy indicates that it wants the mobile phone industry to create self-regulating controls in relation to content. The government also shares public concern about unwanted contact and content
Technological factors
The mobile phone industry has seen a great deal of technological change and will continue to do so. Mobile phones were originally used for telephone conversations. Text messaging became available and usage has increased dramatically. However, most of the texts were between people who already knew each other and had swapped contact numbers. In other words the users were happy to communicate with each other.
As technology developed, it has become possible to swap information between mobiles and other devices via Bluetooth technology. This can be used inappropriately to send anonymous and unwanted texts. This practice is known as Bluejacking and can be distressing particularly if the recipient is a child or young person.
The advent of 3rd generation (3G) mobile phone technology is bringing with it a richer mix of content and providing more services. This further raises the issue of ethics as Vodafone (and other suppliers) can now offer a wide variety of content to mobile phones with this new technology. Naturally, 3G will help the companies to increase their sales revenues. However, Vodafone recognises that it brings additional responsibility. This includes the need to protect young people from inappropriate contact, including violent games, gambling and erotic material.
