A brief History of Vodafone and the nature of its business.

University Degree Business and Administrative studies

1. Terms of Reference+

This report has been written as part of the BIS 3000 coursework.
The report will include a brief History of Vodafone and the nature of its business.

The mission and objectives of Vodafone.
Analyses of internal and external environment.
The use of E-commerce
The latest business strategies.
How the strategies were implemented.
Recommendation of further development.

This report is written to the BIS module leader Yaw Busia.
It will be submitted to Hendon student office no later than 21st November 2003.

Procedures

In order to gather relevant information the following procedures were carried out.

Revising the lecture notes regarding analyses of internal and external environment, business strategies and how strategies, implemented and e-commerce.
Library search concerning the industries profile.
Numerous meeting among members of the group.
Contact the company for there annual report.
Internet searches on mobile industry particularly Vodafone.

Findings

History

The mobile phone industry didn’t exist 20 years ago. In the late 1980s exceptionally few people possessed a mobile phone. Now nearly two third of the UK’s population own a mobile phone.

Vodafone was formed in 1984 as subsidiary of Racal electronic plc; at the time it was known as Racal telecom Limited. In 1982 Racal was awarded UK’s first mobile licence. The company made the first mobile call at midnight on the 1st of January 1985.

Since its first mobile call in 1985 Vodafone grew rapidly. In 5 years the customer base reached 0.5 million. As Vodafone grew rapidly it want it to get more customers so they introduced the roaming service in 1991. This was the first international roaming call between Vodafone and telecom Finland.

Due to this growth Vodafone’s intercontinental reach extends with licences and partnerships in Germany, South Africa, Fiji, Australia and Greece. In 1994 Vodafone introduced two new services digital fax and text messaging.

A year later Vodafone continued its overseas expansion In Netherlands, Uganda, Hong Kong, Germany, France. By 1997 Vodafone’s customers reached 3 million in the UK and 5 million worldwide. In the same year Vodafone introduced another new service called ‘Pay As You Go’ service. In 2 years since the Pay As You Go service was introduced it reached 1 million customers. Due to the growth and competition from other companies Vodafone had to cut down its price plans to keep its customers. Vodafone also reached nearly 8 million customers in the UK and 65 million worldwide.

In year 2000 Vodafone’s customers reached 101 million worldwide

Vodafone is the UK’s leading network operator with the highest number of users. The UK’s mobile market is an oligopoly market. The company originally concentrated on the business market but now concentrates more on the commercial market and this is were we can compare them to other mobile network providers such as O2, Orange, and T-Mobile. Vodafone realised that most people wanted a non-contractual mobile service and so released the UK’s first Pay as You Talk billing structure. This is where you purchase a telephone for a one off price and then top up your calling credit with vouchers, which can be purchased from many UK high street outlets. The latest variation of the pre paid package is called pay as you talk al calls. Vodafone want to concentrate more on the leisure market in recent years and by launching exciting new services such as pay as you talk and pre, pay they will attract a wider range of customers.

Missions and Objectives

Vodafone have always focused on one vision and that is to be the world’s mobile communications leader- improving lives of the customers, helping organizations, people and communities be more connected in a rapidly improving mobile communications world.

Since the company was formed in 1984 Vodafone have always looked to expand their business both internally and externally by using their vision to foresee innovative strategies such as, Vodafone making the first International roaming call via a link up between Vodafone and Telecom Finland

In 1993 Vodafone’s business ventures extend world-wide with partnerships to Germany, Fiji, Greece, Australia, and South Africa;

June 30th 1999 Vodafone complete their merger with AirTouch Communications producing a new organisation called Vodafone AirTouch PLC.

This merger created one of the biggest International mobile telecommunications companies in the world, with customers covering most of Europe and the United States of America;

April 12th 2000 Vodafone received conditional European Commission Consent to the acquisition of Mannesmann confirming Vodafone as one of the largest organisations in the United Kingdom and putting them into the top ten organisations in the world;

Their set values are that they value their customers, so that the customers are satisfied with their service, they value their employees so that they can develop, retain, promote and reward them, they value their results which makes them focused to be the best in what they do, and they value the world around us so what improvements that have been made must be respected throughout the world.

Mission Statement

Some organisations like to have a written statement about their mission and objectives. Some of them will have these statements but refer to them by a different name. Vodafone by using their mission statement actually tell the consumer what their function is by being involved with their organisation.

This will consist of:

What are the benefits on offer?
What type of business they are involved in?
Are the consumers likely to be happy?
Who is to be served?

This is self explanatory in their mission statement,

“The Vodafone Group Foundation is driven by a passion for the World around us. The Foundation makes social investments that help the people of the world to have fuller lives by:

Sharing the benefits of developments in mobile communications technology as widely as possible;

Protecting the natural environment; and

Supporting the local communities in which Vodafone’s customers, employees,

Investors and suppliers live.”

By issuing a mission statement Vodafone had tried and possibly gained a physiological advantage over their competitors by having a planned and written statement of important objectives.

Vodafone’s Objectives

The primary objective of any organisation is to survive and the second most important objective would be to maximise the shareholders profits.

Vodafone aimed to succeed at both objectives by setting very high standards. This consisted of

The aim to be the world’s mobile communications leader;
By going into joint ventures around the world;
By making customers use their mobile communications and making their life more fulfilled due to their experience;
And by making mobile communications the primary means of personal communications.

Porter’s five forces

Industry competitive

The industry competitive include fellow competitors in the UK, there are other competitors around the world, but the closest and most competitive rivals are the UK base rivals O2, t-mobile and orange, also there are two relatively small company namely virgin and 3(three).

O2, formally Cell net UK, are a company owned by British Telecommunications PLC. O2 has 8million subscribers and are Vodafone’s Main competitors. They hold a 40% state in the Link a Chain on telecommunication stores.

As with Vodafone, O2 is a long servicing provider of mobile communication and have a very strong reputation for providing quality, reliable service, especially to corporate users. They are particularly suited to corporate users as they offer services like Dictation Line. This is were you can call a secretary from your mobile phone and dictate a fax or letter, which will appear with your personally details on. O2 were the first to offer pre-pay and Pay-as-you-go for WAP mobile service.

Orange

Orange is the third largest UK mobile Phone network provider and also the youngest, launching their first service ...

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Orange

Orange is the third largest UK mobile Phone network provider and also the youngest, launching their first service in 1994. The company first started as a joint venture between British aerospace and Hutchison and has around 6 million subscribers.

Even thought orange are the youngest mobile communications company, they have been able to keep up with strong competition by offering to match any tariff which another network provider is offering. They also have a very strong advantage with customer service satisfaction with Which Magazine and OFTEL voting them the highest customer service and performance with their service.

T-MOBILE

T-Mobile has been entirely owned by a German company Deutsche Telecom who is a telecommunications group. Originally owned by a joint venture between cable and wireless and the American group, Media One. The company was the first to launch the all digital Pre-Pay Tariff its up to you Package.

They have heavily promoted their pre-pay mobile tariffs and are the only company to offer a standard tariff whereby there is non distinction between off-peak and peak calls. T-mobile is mainly dominating the London area, but only covers 98% of the country.

Buying power

Buying power consumers are far above the ground. The hazard for providers was confusing consumers with too many offers. Independent farms example (in UK car phone warehouse) competed with retailers all by network operators (e.g., vodafone). Other offer cheaper deals through news paper adverts and the internet.

Power of supplier

Manufactures of competed for market hare. Manufactures with a considerable presence, nokia, Motorola and Ericsson, had concerns about market saturatution.the initial failure of WAP phones compared the success of text messages meant that to some extent customers had lost faith in the ability of equipment manufacturers to develop new functionality. Areas of probable growth were multitask chips and smart cards in phones to aid e-commerce. Upgrading was now more important than market penetration.

THREAT OF SUBSTITUTES

In the 1990s the main threat substitution was technological regression, where customers returned to fixed line telephony because of high mobile call charges. By 2000, prices decreases and the need for every one to have a mobile phone reduced this threat. More threatening was to cot convergence of mobile telephony with PD As(personal digital assistance)and with the internet. This was threatening because of the difficult in p[predicting how these new technologies will be accepted in the market. The other threat was location technology in mobile phones, making you easy to find an opportunity for marketers, in emergencies and personal safety if lost, but bringing big brother as well.

THREAT OF NEW ENTRANTS

Threat of of enterant was low because of the enormous cost in both licences (£22 billion in the UK alone) and in the general investment needed to be a player in new 3G 9 broadband) technology. However recently two new operators has joined the industry, namely virgin and 3(three).

Power was a function of who was ahead of the game of in 3G. Future power struggles were likely to be a function of deregulation upgrading and uptake of new functionality.

Business strategies

Porter gives one of the best-known explanations of competitive advantage in his generic strategy framework. Porter is of the opinion that competitive advantage occurs as a result of the selection of a generic strategy, which is most suitable for the organisation in light of its’ competitive environment. Value adding activities are then arranged so that they support the chosen strategy. There are three main strategies:

Differentiation – involves creating a customer awareness that a product is of a better quality than that of its competitors’. A higher price can therefore be charged.
Cost leadership – accomplishing lowest cost levels, leading to above average profits without having to charge above average price.
Focus – use either a differentiation or a cost-leadership strategy in a narrow profile of market segments.

Figure 1: Illustration of cost and differentiation strategies

Vodafone has completed a number of major business transactions over the past three years; the most significant of witch were the merger with AirTouch, the acquisition of Mannesmann AG and, recently, the acquisition of further interests in Japan Telecom and the J-phone group. By combining with these companies it is reducing cost and at the same time improving services and facilities.

In early 1994 Vodafone launched a new service called ‘ALL IN ONE PACKAGES’. This allowed customers to pay for their line rental up front and use their mobile phones without having to pay for the line rental for the rest of the year.

This illustrates how Vodafone is extending its existing core competences. Here Vodafone has taken customer perceptions into account and the company is constantly looking to improve and develop their products in order to get ahead of their competitors. Vodafone have partially adopted a differentiation and cost-leadership based strategy, as they have charged more for there services than those of the competitors as Vodafone customers know that they will be receiving quality and reliable products and service.

What makes this an appropriate strategy to use in this situation is the fact that with this particular market segment, demographic variables such as income, and psycho-graphic variables such as lifestyle have to be taken into consideration.

Vodafone also launched ‘PAY AS YOU GO’ packages, which targeted school and college students, and aims to encourage more students to use ‘PAY AS YOU GO’ services as they will have the opportunity to own a mobile phone before they become 18 years of age. This is a example of the implementation of a cost-leadership strategy, as it involves low costs.

A Successful strategy can also be based upon a combination of differentiation, price and cost control. Such strategy is known as HYBRID strategy see figure 2).

The degree of differentiation, price and cost control will depend on the nature of the market in which the business is operating. If consumers prefer quality rather than lower prices, emphasis on price and cost will be lower, but in markets where demand is price sensitive, the company will try to keep price and cost as low as possible. In order to adjust to market conditions, advertising and different promotion strategies may be used to influence preferences of consumers.

Figure 2: Diagram of Hybrid strategy

Market price responsiveness

Price insensitivity Price sensitivity

Stuck in the ‘middle’ strategy

Appropriate strategic approach

An example of the ‘Stuck in the middle’ strategy was illustrated when the company worked closely Air touch to ensure better network coverage globally, by installing more transmitters around the world, by satisfying those customers who are finding difficulties of receiving network coverage around some areas of the world.

This project also represents Kay’s framework, where in this particular project distinctive capability results from Architecture (relationship with other organisations to improve its own service), Reputation (Superior product/service quality) and innovation (researching, designing, developing and marketing) sources.

Competence-based competitive advantage

The competence or resource-based model underlines that competitive advantage can be gained from competences or capabilities of the organisation, which will let it perform better than its competitors.

Prahalad and Hamel (1990) state:

‘Core competences are the collective learning of the organisation, especially how to co-ordinate diverse production skills and integrate multiple streams of technologies’.

There are three tests, which should be applied when identifying and developing core competence.

A core competence should:

Provide the business with the ability to enter and successfully compete in numerous markets.
Add more apparent customer value to the business’s products and services than that of the competitors’ products.
Be complicated for competitors to copy.

Distinctive capabilities

Kay (1993) developed a framework, which explains competitive advantage. Here competitive advantage is defined in terms of distinctive capability. This has much in common with the concept of the core competence. It is Kay’s contention that, distinctive capability can arise from one or more of the following sources:

Architecture – Unique network of relationships with suppliers, distributors or customers, which competitors don’t have. Relationships may be internal as well as external.
Reputation – Superior product quality, characteristics, design, service etc.
Innovation – Researching, designing, developing and marketing new products.
Strategic assets – Natural monopoly, patents and copyrights, which restricts competition.

Application of Kays’ distinctive capabilities to Vodafone

Vodafone engages in two forms of marketing: Brand Marketing designed to increase general public awareness of the Vodafone brand – its values, products and services-and marketing specifically directed at certain distribution channels. Brand communication includes sponsorship and advertising on radio, television, in general circulation newspapers, in magazines and in specialized publications.

This activity provides us with an insight of how the company is trying to achieve its aims. It is an example of Kays’ framework, where distinctive capability results from sources such as Innovation.

The company now has interests in 28 countries across five continents. Based on ownership interests at 31 March 2002, the company, through its subsidiary undertakings, joint ventures, associated undertakings and investments, had approximately 101.1 million registered customers, excluding paging customers, calculated on a proportionate basis in accordance with the company’s percentage interest in its ventures. There were over 229.1 million registered customers in ventures in witch the company has control or invests.

Strategy Implementation

In order for strategy to be implemented successfully, it is essential that the organisation has deduced maximum benefit from any strategic analysis which has taken place. This is vital as it gives the organisation an accurate account of their internal and external strengths and weaknesses, and also identifies any opportunities or threats that may exist. Once this information has been gathered, the organisation can then make informed decisions as to how they can implement their strategies in the most effective form, and as smoothly as possible so as to minimise impact on the operational activities of the business. The output from strategic analysis becomes one of the inputs into strategic implementation. Strategic Analysis also assists in successful resource planning. Poor resource planning will hinder progress and negatively affect the organisations implementation of any proposed strategies. Resource planning must take place in many areas, namely;

Physical resources such as land, buildings, plant, equipment and machinery.
Financial resources such as investment capital, shares, loan, debentures and bond capital.
Human resources such as obtaining the required number of employees, agents, contractors and specialists. The decision on whether to employ and train new employees, train existing employees or appoint agencies to recruit specialists or individuals.
Intellectual resources or non-physical inputs that may be necessary such as databases, legal permissions brand or design registration and contacts.

Resource planning is an exercise which can determine how much or how little strategic implementation will cost. In competitive markets, organisations are competing with one another for the best people, the cheapest and most adequate sources of finance and the best locations for development.

Structure and culture also need to be reconfigured, so that these support the proposed strategy. Generally, Organisations are one of the two main types of structure. Firstly, a tall structure is one where there are many layers or levels in the organisation. This means communication takes longer and there are generally more supervisors and managers. However, this setup also enables the organisation to coordinate a wide range of activities across different product and market sectors. It is suited to large organisations in complex environments. Secondly, a shorter structure typically has fewer layers or levels in the organisation. This means that there are fewer intermediaries between operational staff and top-level management. This eases communication and also gives management a greater degree of control. This setup is usually suited to smaller organisations working in simpler environments.

Management of Change is also vital. Naturally, humans are resistant to change. In order to achieve full capacity utilisation of human resources, it is essential that they are highly motivated. Motivation levels decrease if change is imposed on the workforce; alternatively, if management highlight the benefits of change and include the workforce in the operational decision making process, they are likely to better understood and accept changes.

The results of Vodafone’s strategic analysis have been outlined earlier; as a result the following resource planning took place;

Vodafone are one of the largest communications providers in the world, and therefore it is important that their resources are arranged in a manner in which requirements are met. As Vodafone is such a large organisation it is difficult to maintain complete control over its resources. In order to implement their proposed strategy, Vodafone have split their operations into six managerial divisions; Northern Europe, Central Europe, Southern Europe, Americas, Asia Pacific and Middle East and Africa. This reorganisation would better help Vodafone to keep some control over its resources.

Physical resource planning is evident as Vodafone have aimed to improve the quality of the network they provide. This is only possible through physical assets such as mobile switching centres and digital base stations. As of March 2002, Vodafone’s UK digital network consisted of 108 mobile switching centres and 8,253 digital base stations. As a result, they achieved 99% coverage of the UK. This has improved their services and as a result, their customer base has increased by 7% since March 2001. Vodafone UK mobile service revenue share is 33%, a lead of 5.5% over its nearest competitor. Other physical resources include computerised mobile telephone exchanges, operator centres and retail premises.

Financial resource planning is evident. Vodafone disposed of certain interests generating income; Disposal of Orange Plc which was completed in March 2002 generated £2.9 billion. This was as required by the competition commission. Vodafone no longer has any interests whether direct or indirect with Orange Plc. The major sources of finance have been generated from borrowings from bank facilities and asset disposals.

Human resource planning is evident as Vodafone aim to attract the most talented people to work with them. They aim to do this by a flexible remuneration package. This may be a challenge as the markets within which they operate are highly competitive. This means they will be competing for the best staff. As a part of strategic implementation they aim to educate and train employees to be able to satisfy and excel the demands of their jobs.

Intellectual resource planning is evident as Vodafone have been awarded one of the five 3G licences in the auction that was held in April 2000. Vodafone have started a campaign in which they aim to expose the Vodafone brand as much as possible, the single Vodafone brand is now being used over fourteen group subsidiaries. By doing so, Vodafone aim to increase global awareness and this will present Vodafone as a trusted and reliable business operator.

As stated earlier, Vodafone has been split into six global regions. This aims to reduce complexity and allows a degree of flexibility allowing individual regions to cater for the needs in the markets within which they operate. Vodafone, due to the complex nature of the environment within which they operate is of a tall nature. The main reason for this is as they are a very large organisation; many layers are needed to maintain control.

Employees are included in strategy formation exercises, keeping them well aware of what is happening. This maintains and increases their levels of motivation. They also feel important. Vodafone in their annual report aim to be open and involving towards employees with regards to strategy. This in turn means the need for management of change is significantly reduced, as employees understand the benefits of change as they were involved in the process.

Technology

Global Services Strategy

The Group's vision is to be the world's mobile communications leader. A major focus of the Group's strategy is to offer innovative services within Vodafone-branded, end-to-end customer propositions that utilise the Group's global footprint and global brand to offer customers a unique mobile experience and seamless international services.

These programmes, such as 'Vodafone live!', are based on compelling customer propositions and have been packaged together for a specific target market.

'Vodafone live!' and 'Mobile Office from Vodafone' are already demonstrating their importance to the Group's strategy of deriving increased revenues from data services, with games downloads, picture messaging and other content services proving particularly popular and generating extra revenue.

Vodafone live!

Vodafone live! Is an easy-to-use consumer service, bringing customers a world of colour, sound and pictures. Vodafone live! Enables customers to use picture messaging, download polyphonic ring tones and colour games, and browse branded infotainment from integrated camera phones, through an easy to use icon-driven menu.

Vodafone live! Was launched on 24 October 2002 and by 31 March 2003 the Group had connected more than one million active Vodafone live! Customers in 10 countries. Of the Vodafone live! Customers at 31 March 2003, Germany had over 405,000, Italy 227,000 and the UK 240,000. Since 31 March 2003, Vodafone live! has also been launched in Australia, Egypt and New Zealand.

The service has attracted critical acclaim from the industry, including recent awards from the GSM Association for best consumer application, advertising and mobile handset.

The acquisition of the remaining 50% stake in Vizzavi and its rapid integration into the Group has supported the creation of Vodafone live!, which is expected to continue to drive a significant part of the Group's growth in future years. It is intended that the Vodafone live! Experience will continue to be updated, integrating the most up to date services and technologies as well as broadening the range of handsets available to cover more market segments. The next release of Vodafone lives! Will include access to picture messaging libraries and improved download speeds.

Mobile Office from Vodafone

Mobile Connect Card, the first of Vodafone's global business services to be offered under Mobile Office from Vodafone, launched in twelve countries by 31 March 2003. Mobile Connect Card, a high speed data card enabling customers to access their normal business applications when out of the office, is aimed at all business users, from large corporate customers to those in the small and medium sized enterprise sector, and is marketed and sold through the Group's direct sales, retail and e-channels as well as partner channels for leading personal computer brands.

Mobile Office from Vodafone will offer a range of global and local mobile business services to customers, with more global services to be introduced later this year.

Together, Vodafone live! and Mobile Office from Vodafone lay the foundations for the Group's next stage of growth, as it is planned that both will create the demand for new data services against which the Group will deploy its 3G networks. Both currently use 2.5G technology and will be upgraded to 3G, enabling faster download speeds, which will enhance customer experience and productivity.

In December 2002, J-Phone Vodafone became the first subsidiary in the Group to commercially launch 3G services. Furthermore, J-Phone Vodafone customers with an enabled handset can not only use 3G services within Japan, but can also roam internationally on 2G networks with the convenience of being able to use the same telephone number as they do at home.

In Europe, the Group's 3G programme continues, with networks being rolled out according to plan and technical testing underway. The availability of suitable handsets remains a key issue and supplies of these are expected to be limited until 2004.

3G services are expected to be available to customers before the end of the 2004 financial year, dependent on when networks and handsets are of sufficient quality to offer such services to the Group's customers.

E-commerce

When buying a mobile phone online, the word is VODAFONE When Vodafone decided to take its retail operation online, it turned to Smart Media to ensure an innovative, user-friendly and flexible ecommerce solution. Vodafone had long considered adding another sales channel to its Retail operations, and in the summer of '98, initiated an ecommerce project to do something about it. As the world leader and innovator in its field, Vodafone is the most popular mobile phone network in the UK as well as one of the top 15 UK companies. It's little surprise then that Vodafone became the first mobile phone network to sell online as well as the first High Street name in telecoms to do so.

Vodafone's Marketing Director, Helen Keayes explains, "As time was ticking by, we knew that we were missing business opportunities. This is coupled with the fact that we were the first in our field to undertake such a project, and as an organisation we aim to maintain the position of innovator with a competitive edge."

To kick off the project, New Media Manager Nicky Birkin assembled a Web committee consisting of representatives from its Telesales team that controls the ordering process; Purchasing that manages the buying operations and stock control; accompanied by Finance, the IT department, the Legal department and Retail Operations, which support Vodafone's 240 High Street stores.

"We started the project thinking very long-term, so that a few months down the line, we weren't going to have to re-invent everything to fit with the ever-changing business environment in which we operate," said Birkin.

"The new Web site had to provide another channel to market. It was never designed to steal business away from High Street sales. But, the whole site would be re-focused to sell products from the start, while offering valuable customer services and enhancing our corporate image at the same time. The previous site had been fairly static in that it contained extensive product information and contact details for the stores and for telesales, but you couldn't actually buy anything," added Birkin.

Ecommerce presented Vodafone with another direct selling opportunity, supported by the same on-site warehouse that stocks and supplies its phones, accessories and pagers to fulfil telesales orders.

When it came to selecting its ecommerce technology partner, Vodafone turned to a company with a proven track record. Basingstoke-based Smart Media had already successfully worked with Vodafone on constructing an Intranet and a previous Web site. According to Birkin, Smart Media was selected because it really understood their business. `

Great Expectations
As a result, Vodafone was mindful not to launch a fully specified Web site that may have attracted a higher volume of cyber shoppers than it could initially cope with. To minimise this risk, the site was first equipped to sell only pagers, accessories and Vodafone 'Pay As You Talk' phones - products that Vodafone considered the easy-to-purchase "cash" items.

Easy To Use
The reactions from Vodafone's Web visitors are promising. Analysis shows that the majority of visitors spend a significant amount of time there. Tracking research also indicates that 21% of visitors that purchase online actually went to the site purely for information. The site is so easy to use, those visitors quickly find the information there are looking for, and can buy from the Vodafone store with just a few clicks of a mouse.

And of those who have visited, comments include: "Excellent site, one of the most pleasurable I've ever spent money on", "Impressive - I had tried five high-street stores to get what I needed, and none had any of the items I bought today".

Birkin attributes much of this success to the site layout and ease of use. For Vodafone, its Web site is seen as simply another retail outlet and this is reflected in its look (albeit two-dimensional), style, images, headings, product presentation and language. "Smart Media has done an excellent job of designing the user interface to be very clean, simple and extremely easy to use - an obvious yet too often overlooked aspect of ecommerce projects," added Birkin.

It’s not realistic to talk about ecommerce strategies without considering the security issues. As Ian Williams, Managing Director at Smart Media explains, "It's very important to Vodafone and its customers that its ecommerce transactions are secure. We've worked to ensure that the online store operates very strictly within the SSL encryption industry standard. Customer feedback to date indicates that a significant number of our visitors recognise the 'VeriSign' logo as confirmation of sound transactional security, a view which also underlines faith in the Vodafone brand. As a large organisation, it seems that Vodafone's online customers perceive a quality of service - after all they have a corporate reputation to protect," he concluded.

Recommendation

It not easy to make a recommendation for highly successful company like Vodafone however we believe these following recommendations could benefit the company in the long run.

Diversification

The mobile phone industry is a high growth industry, high growth involve a high risk, for example so far there is no like between mobile phone use and any health implication, however what if someone establish a link, you can envisage what is going to happen to the industry. Vodafone can reduce the risk by diversifying into other industries. After all Vodafone was created by a way of diversification by relatively small company. The well established brand name and the financial ability can help Vodafone achieve success in other industries as well. As they say “don’t put all your eggs in one basket”

As we stated earlier

Price Simplification

Currently Vodafone offer 8 different tariffs even within one tariff the call charges vary depending on the time of the day, whether the call is made to fixed lane or mobile, local or national, voice mail or text message and so on. On fixed telephone line there are very few tariffs hence it is easy to choose. Someone might defend by saying different tariffs are designed for different market segments, however we don’t agree with this argument because if you have expensive monthly tariff the call charges are lower and if you have a cheaper monthly tariff the charges will be higher, we believe for most people which every tariff they use they are likely to pay more or less similar amount of monthly bill. Most people find it difficult to choose tariff or price plan. If Vodafone reduces it’s tariffs and simplify the call charges it could benefit its customers and potential customers

Overseas expansion

In this county nearly 2/3 of the population own a mobile phone and this figure is unlikely to grow significantly and also Vodafone will not be allowed by monopoly and merger commission to take-over or merge with its rival in the UK. In order to care on growing overseas expansion is essential. Currently the company operates in 27 different countries Vodafone should care one expending in other countries as well such as countries with high population and also high disposable income.

Research and development

Currently Vodafone spend million a week on Research and development this figure might sound a lot however putting in consideration the company’s size, market position, turnover and the technology involve. Vodafone should invest more to care on been the market leader for long time to come.