A SUMMER TRAINING PROJECT REPORT

ON

“VODAFONE”

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE

AWARD OF DEGREE OF BACHELOR IN BUSINESS
ADMINISTRATION 2016-2019

UNDER THE GUIDANCE OF:

MR. SHAKTI SHARMA

SUBMITTED BY:

NITIN SARAF
PRN NO.1628101542

BHARATI VIDYAPEETH DEEMED UNIVERSITY

SCHOOL OF DISTANCE EDUCATION

Academic Study Center-BVIMR, New Delhi

An ISO 9001:2008 Certified Institute

NAAC Accredited Grade “A” University

Page 1 of 73
 STUDENT UNDERTAKING

I NITIN SARAF (BBA 4SEM) would like to declare that the Project
report entitled “VODAFONE GROUP PRIVATE LIMITED
COPANY”. Submitted to Bharati Vidyapeeth Deemed University
School of Distance Education, Academic Study Centre-BVIMR, and
New Delhi in partial Fulfillment of the requirement for the award of the
degree.

It is an original work carried out by under the guidance of MR. SHAKTI

SHARMA. All respected guides, faculty member and other sources have
been properly acknowledged and the report contains no plagiarisms.

To the best of my knowledge and belief the matter embodies in this

project is a genuine work done by me and it has been neither submitted
for assessment to the university nor to any other University for the
fulfillment of the requirement of the course of study.

NITIN SARAF

Page 2 of 73
 ACKNOWLEDGEMENT

No task can be achieved alone, particularly while attempting to finish a project of

such magnitude. It took many special people to facilitate it and support it. Hence, I
would like to acknowledge of their valuable support and convey my humble
gratitude to them.

I would like to express my sincere gratitude to MR. SHAKTI SHARMA for

guiding me on the project of “VODAFONE GROUP PUBLIC LIMITED
COMPANY”.

I would like to thank him as he had always been open to discussion and frequently
enquired about the project and any problems faced etc. he has also given me
valuable guidance as to how to go about the project.

I have put my best effort to make this project as informative and understandable as
possible. I have done the best I could do and have been honest to the company, and
most importantly to myself.

Thank you, SIR for supporting me in making this project.

NITIN SARAF

Page 3 of 73
 PREFACE
Practical knowledge is an important suffix of theoretical knowledge. One cannot
rely solely on theoretical knowledge. Classroom lectures clarify the fundamental
aspects of management, but they must be correlated with the practical training
situations. It is that ideology that practical knowledge should be made mandatory
for the curriculum and has a significant role to play in the fields of business
management.

I have put in my sincere efforts to make this INDUSTRIAL EXPOSURE project a

real success. My project is on “VODAFONE GROUP PUBLIC LIMITED
COMPANY”, its impact on the market as the largest IT player and on the
economy. This study would help to understand the position and the growth of the
company.

Page 4 of 73
CONTENTS

Chapter 1: Introduction to Company

1. Nature of Business
2. Type & ownership Pattern
3. Organizational Structure
4. Production Lay out
5. Organizational Policies

Chapter 2: Industrial Analysis

1. Industry Overview
2. Current Issues
3. Key Competitors
4. Environmental Scanning
5. Porters five forces model of competition –Michael Porter

Chapter 3: Marketing Strategies

1. Products of Company
2. 4 Ps (Product: Price, Place & Promotion)
3. STP (Segmentation, Targeting and Positioning)
4. Distribution Channels
5. Promotion Strategies

Chapter 4: Financial Analysis

1. Sources of Finance
2. Ratio Analysis
3. Net Profit/ Balance sheet

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Chapter 5: Key Learning’s from the Company and Recommendations
1. Performance Analysis of the Company
2. Reasons for the expansion/diversification of Company
3. Comment on Organizational Leadership
4. Market share/growth rate of Company
5. SWOT Analysis of the Company

Chapter 6: Findings

Chapter 7: Conclusions and Suggestions

Bibliography

Page 6 of 73
VODAFONE
GROUP
PUBLIC
LIMITED
COMPANY

Page 7 of 73
 CHAPTER 1: INTRODUCTION
1.1 NATURE OF BUSINESS
Vodafone is a world leading mobile telecommunications company. Vodafone provides a widerange of com
munication services, including voice calls, SMS text messaging, MMS pictureand video messagin
g, internet access and other data services. The group has 221 milliondirect customers including pri
vate consumers and corporate customers in diverse marketsaround the world.
Vodafone Group is a British multinational telecommunications company, with headquarters in
London. It predominantly operates services 93 KB (9,084 words) - 18:12, 2 February 2018

Vodafone UK is a provider of telecommunications services in the United Kingdom, and a part of

the Vodafone Group, the world's second-largest mobile phone 16 KB (1,548 words) - 18:58, 13
December 2017

 Telephone numbers in New Zealand Prefix 08xx and are usually followed by 5 digits.
0508 Vodafone Toll free 0800 Spark, Vodafone and other network operators Toll free various
non-geographic 20 KB (1,649 words) - 01:34, 18 January 2018

 List of LTE networks in Europe

Albania launches LTE", Tele Geography. 2015-07-25. Retrieved 2015-07-25. 
"Vodafone Albania introduces 4G+ service", Telecom paper. 2015-09-07. Retrieved 2016-02-02
244 KB (9,213 words) - 11:33, 1 February 2018

 Telephone numbers in Qatar Telephony services prior to the introduction of Number

Portability numbers beginning 77 are designated for use by Vodafone Qatar. 8007 Non-
geographic 6 KB (61 words) - 09:16, 13 December 2017

 Total Access Communication System the two competing mobile phone networks in June
1982. Vodafone (known then as Racal-Vodafone) opted for a £30 million turnkey contract from
Ericsson 7 KB (648 words) - 11:56, 10 January 2018

 Telephone numbers in Australia

Telstra 1414 – AAPT 1415 - Vodafone 1422 - Premier Technologies 1423 - Soul Patterson 1428
- Verizon Australia 1431 - Vodafone Hutchison 1434 – Symbol Networks 47 KB (4,680 words) -
15:49, 30 January 2018

 2G 6 July 2017. Eek, Jen (30 September 2016), "Vodafone to switch off 2G network next
year", Vodafone.com (Press release) Retrieved 14 September 2017 11 KB (1,084 words) - 00:35,
3 February 2018

 Vodacom  (category Vodafone) Telecommunications group Telkom and the British

mobile phone operator Vodafone. On 6 November 2008 Vodafone announced that it had agreed
to increase its stake to 65

B (1,679 words) - 15:51, 31 January 2018 Hutchison 3G. Would be marketed under
the Vodafone brand. The merger was approved by shareholders and regulators on 29 May 2009,
and Vodafone Hutchison Australia Pty Ltd 41 KB (4,346 words) - 13:57, 14 January 2018

Page 8 of 73
17 Internet in Germany Providers are: Deutsche Telekom Constar 1&1 Vodafone o2 Versatile
Providers such as Deutsche Telekom and Vodafone also offer DSL-based triple play services.

20 B (2,281 words) - 10:13, 30 January 2018

21 The Only Ones "Another Girl, Another Planet" was used in a Vodafone ad campaign in 2006,
and picked up as the introduction theme to Irish DJ Dave Fanning's radio show
13 KB (1,408 words) - 22:30, 20 April 2017

22 LTE Advanced  (section Timeframe and introduction of additional features)2013-11-28.

Retrieved 2014-05-16.  "Vodafone Zeist in Dresden das stellate Mobilfunknetz der Republic" (in
German). Vodafone. 2013-11-15. Retrieved 2014-04-30 26 KB (2,058 words) - 14:06, 2 February
2018
23 Television in New Zealand Christchurch from Vodafone. On July 2016, Sky announced that
Igloo will be discontinued although free view channels will still be available. The Vodafone
service 18 KB (2,239 words) - 15:33, 29 December 2017
24 Small cell access 3G small cells on post offices throughout rural Japan. In the UK, Vodafone's
Rural Open Sure Signal program and EE's rural 3G/4G scheme increase geographic 12 KB (1,293
words) - 16:49, 15 January 2018
25 Jio summoned Jio and the country's existing telecom operators like Bharti Airtel, Vodafone, and
Idea Cellular to meet and discuss an issue regarding interconnection 37 KB (3,030 words) - 08:44,
4 February 2018
26 Three Ireland network operator behind Vodafone, O2 and Meteor. Service was initially offered
as post-paid only, but on 16 May 2006 the introduction of a pre-paid service8 KB (768 words) -
11:38, 21 January 2018
27 Joint Innovation Lab  (category Vodafone) The Joint Innovation Lab (JIL) is a joint venture
between Vodafone, Verizon Wireless, China Mobile and Softbank Mobile. It is backed up by
handset makers KB (456 words) - 13:22, 26 April 2017The name Vodafone comes
from voice data  fond  (the latter a sensational spelling of "phone"), chosen by the company to
"reflect the provision of voice and data services over mobile phones".
History

The evolution of Vodafone started in 1982 with the establishment of the Racal Strategic Radio
Ltd subsidiary of Racal Electronics, the UK's largest maker of military radio technology, which
formed a joint venture with  Milli.com called 'Racal', which evolved into the present day
Vodafone.

Evolution as a Racal Telecom brand: 1980 to 1991

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 Vodafone's original logo, used from 1991 to 1997

In 1980, Ernest Harrison, the then chairman of Racal Electronics, agreed to a deal with Lord
Weinstock of the General Electric Company to allow Racal to access some of GEC's tactical
battlefield radio technology. The head of Racal's military radio division, Gerry When, was briefed
by Ernest Harrison to drive the company into commercial mobile radio. Whent visited a mobile
radio factory run by General Electric (unrelated to GEC) in Virginia, USA the same year to
understand the commercial use of military radio technology.

Jan Stenbeck, head of a growing Swedish conglomerate, set up an American company, Millicom,
Inc. and approached Racal's Whent in July 1982 about bidding jointly for the UK's second cellular
radio licence. The two struck a deal giving Racal 60% of the new company, Racal-Millicom, Ltd,
and Millicom 40%. Due to UK concerns about foreign ownership, the terms were revised, and in
December 1982, the Racal-Milicom partnership was awarded the second UK mobile phone
network license.[12] Final ownership of Racal-Millicom, Ltd was 80% Racal, with Millicom
holding 15% plus royalties and venture firm Hambros Technology Trust holding 5%. According
to the UK Secretary of State for Industry, "the bid submitted by Racal-Millicom Ltd… provided
the best prospect for early national coverage by cellular radio."

Vodafone was launched on 1 January 1985 under the new name, Racal-Vodafone (Holdings) Ltd,
[14] with its first office based in the Courtyard in Newbury, Berkshire, and[15] shortly thereafter
Racal Strategic Radio was renamed Racal Telecommunications Group Limited.[16]On 29
December 1986, Racal Electronics issued shares to the minority shareholders of Vodafone worth
GB£110 million, and Vodafone became a fully owned brand of Racal.

On 26 October 1988, Racal Telecom, majority held by Racal Electronics, went public on
the London Stock Exchange with 20% of its stock floated. The successful flotation led to a
situation where Racal's stake in Racal Telecom was valued more than the whole of Racal
Electronics. Under stock market pressure to realise full value for shareholders, Racal demerged
Racal Telecom in 1991.

Page 10 of 73
Vodafone Group, then Vodafone Air touch plc: 1991 to 2000
On 16 September 1991, Racal Telecom was demerged from Racal Electronics as Vodafone
Group, with Gerry Whet as its CEO.

In July 1996, Vodafone acquired the two-thirds of Talkland it did not already own for
£30.6 million. On 19 November 1996, in a defensive move, Vodafone purchased Peoples
Phone for £77 million, a 181 store chain whose customers were overwhelmingly using
Vodafone's network. In a similar move the company acquired the 80% of Astec Communications
that it did not own, a service provider with 21 stores.

In January 1997, Gerald Whent retired and Christopher Gent took over as the CEO. The same
year, Vodafone introduced its Speechmark logo, composed of a quotation mark in a circle, with
the O's in the Vodafone logotype representing opening and closing quotation marks and
suggesting conversation.

On 29 June 1999, Vodafone completed its purchase of AirTouch Communications, Inc. and

changed its name to Vodafone Airtouch plc. The merged company commenced trading on 30
June 1999. To gain anti-trust approval for the merger, Vodafone sold its 17.2% stake in E-Plus
Mobilfunk. The acquisition gave Vodafone a 35% share of Mannesmann, owner of the largest
German mobile network.

On 21 September 1999, Vodafone agreed to merge its US wireless assets with those of Bell
Atlantic Corp to form Verizon Wireless. The merger was completed on 4 April 2000, just a few
months prior to Bell Atlantic's merger with GTE to form Verizon Communications, Inc.

In November 1999, Vodafone made an unsolicited bid for Mannesmann, which was rejected.
Vodafone's interest in Mannesmann had been increased by the latter purchase of Orange, the UK
mobile operator. Chris Gent would later say Mannesmann's move into the UK broke a
"gentleman's agreement" not to compete in each other's home territory. The hostile takeover
provoked strong protest in Germany, and a "titanic struggle" which saw Mannesmann resist
Vodafone's efforts. However, on 3 February 2000, the Mannesmann board agreed to an increased
offer of £112 billion, then the largest corporate merger ever. The EU approved the merger in
April 2000 when Vodafone agreed to divest the 'Orange' brand, which was acquired in May 2000
by France Telecom.

Vodafone Group plc: 2000 to present

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 The headquarters of Vodafone Romania in Bucharest

On 28 July 2000, the Company reverted to its former name, Vodafone Group plc.

On 17 December 2001, Vodafone introduced the concept of "Partner Networks", by

signing TDC Mobil of Denmark. The new concept involved the introduction of Vodafone
international services to the local market, without the need of investment by Vodafone. The
concept would be used to extend the Vodafone brand and services into markets where it does not
have stakes in local operators. Vodafone services would be marketed under the dual-brand
scheme, where the Vodafone brand is added at the end of the local brand. (i.e., TDC Mobil-
Vodafone etc.)

In 2007, Vodafone entered into a title sponsorship deal with the McLaren Formula One team,
which traded as "Vodafone McLaren Mercedes" until the sponsorship ended at the end of the
2013 season.

On 1 December 2011, it acquired the Reading based Bluefish Communications Ltd, an 

consultancy company. The acquired operations formed the nucleus of a new Unified
Communications and Collaboration practice within its subsidiary Vodafone Global
Enterprise, which will focus on implementing strategies and solutions in cloud computing, and
strengthen its professional services offering.

In April 2012, Vodafone announced an agreement to acquire Cable & Wireless

Worldwide(CWW) for £1.04 billion. Vodafone was advised by UBS AG while Barclays
and Rothschild advised Cable & Wireless. The acquisition will give Vodafone access to
CWW's fibre network for businesses, enabling it to take unified communications solutions to
large enterprises in the UK and globally; and expand its enterprise service offerings in emerging
markets. On 18 June 2012, Cable & Wireless' shareholders voted in favour of the Vodafone offer,
exceeding the 75% of shares necessary for the deal to go ahead.

Page 12 of 73
Operations

Africa and the Middle East

Networks in the Middle East and Africa

Majority-owned Minority-owned Partner networks

DR Congo1 Egypt Kenya Kuwait

Ghana Lesotho1 Bahrain

Mozambique1 Qatar2 Libya

Tanzania1 South Africa1 UAE

1
Majority stakes held through majority-owned Vodacom Group
2
Effective ownership is not majority, but full control exercised by the group.

Egypt

In November 1998, the Vodafone Egypt network went live under the name Click GSM.[46]

On 8 November 2006, the company announced a deal with Telecom Egypt, resulting in further
co-operation in the Egyptian market and increasing its stake in Vodafone Egypt. After the deal,
Vodafone Egypt was 55% owned by the group, while the remaining 45% was owned by Telecom
Egypt.

Kuwait

On 18 September 2002, Vodafone signed a Partner Network Agreement with MTC group of
Kuwait. The agreement involved the rebranding of MTC to MTC-Vodafone. On 29 December
2003, Vodafone signed another Partner Network Agreement with Kuwait's MTC group. The
second agreement involved co-operation in Bahrain and the branding of the network as MTC-
Vodafone.

South Africa (Vodacom)

On 3 November 2004, the Company announced that its South African affiliate Vodacom had
agreed to introduce Vodafone's international services, such as Vodafone live! and partner
agreements, to its local market.

In November 2005, Vodafone announced that it was in exclusive talks to buy a 15% stake of Vent
Fin in Vodacom Group, reaching agreement the following day. Vodafone and Telkom then had a

Page 13 of 73
50% stake each in Vodacom. Vodafone now owns 57.5% of Vodacom after purchasing a 15%
stake from Telkom.

On 9 October 2008, the company offered to acquire an additional 15 per cent stake in Vodacom
Group from Telkom. The finalized details of the agreement were announced on 6 November
2008. The agreement called for Telkom to sell 15 per cent of its 50 per cent stake in Vodacom to
the group and demerge the other 35 per cent to its shareholder. Meanwhile, Vodafone has agreed
to make Vodacom its exclusive sub-Saharan Africa investment vehicle, as well as continuing to
maintain the visibility of the Vodacom brand. The transaction closed in May/June 2009.

On 18 May 2009, Vodacom entered the JSE Limited stock exchange in South Africa after
Vodafone increased its stake by 15% to 65% to take a majority holding, despite disputes by local
trade unions.

In April 2011, Vodacom rebranded with the Vodafone logo.

Qatar

In December 2007, a Vodafone Group-led consortium was awarded the second mobile phone
license in Qatar under the name "Vodafone Qatar". Vodafone Qatar is located at QSTP, the Qatar
Science & Technology Park.[54] Commercial operations officially began on 1 March 2009.[55]

Ghana

On 3 July 2008, Vodafone agreed to acquire a 70% stake in Ghana Telecom for $900 million. The
acquisition was consummated on 17 August 2008. The same group-led consortium won the
second fixed-line license in Qatar on 15 September 2008.

On 15 April 2009, Ghana Telecom, along with its mobile subsidiary OneTouch, was rebranded
as Vodafone Ghana.

U.A.E.

On 28 January 2009, the group announced a partner network agreement with Du, the second-
largest operator in the United Arab Emirates. The agreement involved co-operation on
international clients, handset procurement, mobile broadband etc.

Libya

On 24 February 2010, the group signed a partner network agreement with the second-largest
operator in Libya, al Radar.

Cameroon

On 23 September 2016, Vodafone extended its activities to Cameroon by signing a partnership

with Afrimax, a 4G-LTE telecommunications operator in Africa. Vodafone Cameroon Launched
a "Youth Program" in the Universities to support and encourage the Cameroonian students.

Page 14 of 73
The Americas

Chile

On 11 May 2008, Vodafone sealed a trade agreement with the Chilean Enel PCS Chile, in which
Enel PCS has access to the equipment and international services of Vodafone, and Vodafone will
be one of the trademarks of Enel for the wireless business. This step will give the Vodafone brand
access to a market of over 15 million people, currently divided among two
companies: Telefonica Movistar and Enel PCS.

Brazil

In August 2013, Vodafone has started the MVNO operation in Brazil, as a corporative M2M
operator.

United States

In the United States, Vodafone previously owned 45% of Verizon Wireless in a venture
with Verizon Communications, the country's largest mobile carrier. Vodafone branding was not
used, however, as the CDMA network was not compatible with the GSM 900/1800 MHz standard
used by Vodafone's other networks and as Vodafone did not have management control over
Verizon Wireless. On 2 September 2013 Vodafone announced the sale of its stake to Verizon
Communications for around $130 billion.

In 2004 Vodafone made an unsuccessful bid for the entirety of AT&T Wireless, however,
(Cingular Wireless) at the time a joint venture of SBC Communications and BellSouth (both now
part of AT&T Inc.), ultimately outbid Vodafone and took control of AT&T Wireless (the
combined wireless carrier is now AT&T Mobility).

In 2013, Vodafone was considered for acquisition by U.S. based AT&T. Ultimately, the deal did
not move forward.

In December 2014, Vodafone announced an agreement with T-Mobile US to launch a mobile

virtual network operator (MVNO) service using its network, set to launch in 2015.

Vodafone Business Services, India, provides companies with wireline, mobile, machine-to-
machine, collaboration and conferencing, and other services across India and the globe through
Vodafone’s network. In analyzing the experience of Vodafone customers, Nucleus found
Vodafone’s domestic and global reach, quality of service, and support for innovation drove
increased productivity, improved customer service, reduced costs, and increased agility.

Reliable voice and data services are critical for business growth and are the backbone for
innovations that drive productivity and efficiency across all industries. Small firms and industry
leaders alike must manage the overall cost of their communications while leveraging innovations
in areas such as cloud computing, machine-to-machine communication, and big data to compete

Page 15 of 73
and grow. At the same time, telecommunications infrastructure providers are evolving to be more
than just carriers, differentiating themselves with value-added services and other business
offerings as well as their customer service.

Vodafone Business Services, India, established in 2007, provides fixed-line coverage across India
with seamless connectivity to the rest of the world. More than 5 million corporate customers use
Vodafone’s portfolio of services, which includes:

 Wireline services, including virtual private networks (MPLS), internet leased line, leased

Vodafone also provides value-added services such as toll-free number service and customized
caller tunes and hosted business services including corporate e-mail and Web sites, PC security,
and logistics. The company’s network infrastructure includes more than 130,000 kilometers of
fiber, more than 100,000 base stations, more than 400 points of presence across more than 130
cities, all-IP switches, and a Network Operations Center for 24 by 7 performance management.

Customers cited Vodafone’s ability to support all their business connectivity needs, both across
India and around the globe through Vodafone’s extensive network and partnerships, as a
significant differentiator for Vodafone business services. Companies seeking to support
operations across all of India’s 29 states and abroad found the single- source vendor Vodafone
provided would reduce vendor management challenges and streamline billing and accounting
issues:

QUALITY OF SERVICE

Vodafone’s existing and ongoing investments in its infrastructure and services, as well as the
proactive nature of its network performance management, was also cited by customers as a
motivator for moving from other less consistent providers:

 “Vodafone has a very strong network in India, reaching all states in the country with

 “We started with a competitor, but we found they had many limitations and service issues.
Vodafone was much better: the signal was stronger, and the service was much better.

 “Vodafone has very dedicated support. We needed to work with a partner that could help us
understand the technology and devote the technical resources to fix any issues we had.”

Page 16 of 73
INCREASED PRODUCTIVITY
Beyond the natural productivity increases driven by reliable communications and business
solutions such as videoconferencing, Nucleus found Vodafone customers are taking advantage of
the reliability of its network and its machine-to-machine services to support productivity of
diverse groups such as government agents, service and repair personnel, and transportation
providers. Customers said:
 “We have over 11,000 vehicles on the road. Industrial tracking SIMs could not handle the
conditions. With Vodafone the equipment is more durable, increasing our delivery productivity
because we know where a truck is in route.”
 “We have had tangible savings because we’ve been able to knock down the time a service
engineer spends resolving a problem by moving from a brick and mortar set up to remote
diagnostics.”

Vodafone customers achieve productivity gains through its videoconferencing capabilities as well
as its machine-to-machine capabilities such as smart meters and car connect. Productivity gains
typically ranged from 7 to 12 percent depending on the type of technologies employed; those
using machine-to-machine capabilities experienced more significant time savings through
automation.

Vodafone customers achieve productivity gains through its videoconferencing capabilities as well
as its machine-to-machine capabilities such as smart meters and car connect. Productivity gains
typically ranged from 7 to 12 percent depending on the type of technologies employed; those
using machine-to-machine capabilities experienced more significant time savings through
automation.

REDUCED COSTS
Nucleus found Vodafone customers reduced or avoided costs in two main areas: by being able to
make better decisions through the delivery of more timely and accurate information and avoiding
technology costs by taking advantage of the completeness of the Vodafone portfolio of services.
Customers said:
 “Using Vodafone, we are able to read meters four times each day, compared with once a
month, so we can collect more data for analytics to reduce waste by identifying inconsistencies in
service from theft or improper usage.”
 “It’s a headache to maintain multiple operators and billing processes. Vodafone brings together
all the services in one company. We would need at least four separate contracts to get all the
services we get with Vodafone.”

CONCLUSION
Vodafone Business Services, India, is continuing to evolve its product offering to provide a
complete business-to-business service portfolio, and many customers are taking.

Page 17 of 73
 1.2 TYPE AND OWNSHIP PATTERN

Vodafone Group Plc (VOD) Ownership Summary provides a snapshot of institutional holdings
and activity for a stock. The institutional holdings summary data encompasses the holdings and
change from most recent 13F filings. The insider filer data counts the number of monthly
positions over 3 months and 12-month time spans. Summary data is calculated daily, using the
most up to date information available. Please Note: An FPI is exempt of filing insider holdings
with the SEC. Therefore, it is recommended to visit the company's website for up to date
information.

Management team

1. Haris Broumidis  Chairman & CEO

2. Nikolaos Paraskevopoulos Vice President 

3. Aikaterini Stathaki Board Member

4. Frisky Melissa Board Member

5.  Maria Skalko  Board Member

Vodafone India carries out organizational change amid key exits

MUMBAI: Vodafone India is carrying out organizational changes at the top while dealing with a
few exits, including the likely departure of M-Peas head Suresh Seth, as it prepares for a dogged
fight in the Indian market at a time it is involved in merger talks with Idea Cellular for creating
the country’s largest telecom service provider.  

Czech Republic, replaces Naveen Chopra, who is expected to get a new role from 1st of April.

The country’s second largest telecom service provider has streamlined its commercial and
enterprise business under the newly-appointed chief operating officer Bales’ Sharma, as reported
by ET on February 6. Sharma, who was the chief executive officer of Vodafone

Page 18 of 73
 1.3 ORGANIZATIONAL STRUCTURE

Vodafone Group Plc ("Vodafone") today announces a new organisational structure

which will enable continued improvement in the delivery of the Group's strategic
goals. This structure will become effective as from 1 October 2010. The new
organisation is designed to:

 focus on Vodafone’s key commercial and financial priorities: customer and

commercial strength, leadership in data, brand advocacy, cost efficiency and
shareholder returns, and

 simplify the Group’s organisation, by reducing layers and simplifying

managerial governance.
The main elements of the new organisational structure are:

Page 19 of 73
 accountability for the Group’s operating companies will be brought into two
‘operating regions’, to reflect the different nature of assets/geographies and
different development of the sector in various economies:

 Europe: comprising all of the existing controlled businesses in Europe,

plus the Czech Republic, Hungary, Romania and Turkey. Michel Combes will
continue to be the Regional CEO in charge of the Europe Region

 Africa, Middle East and Asia Pacific: comprising all emerging economies
in Africa, the Middle East and Asia, plus Australia, New Zealand and Fiji. Nick
Read will be the Regional CEO in charge of this Region

 the Group CEO, CFO and Strategy & Business Development Director will be
responsible for effecting strategies to maximize shareholder value from Vodafone’s
investments: Verizon Wireless, SFR, Polkomtel and Bharti Holding, which will no
longer be held within the regional structures.

 Group Marketing, Vodafone Business Services, Vodafone Global Enterprise,

Partner Markets, and other commercial units will be combined into a new
organization, Group Commercial, which will be responsible for all commercial
activity. This unit will be headed by Morten Lundal as Group Chief Commercial
Officer (CCO) and he will report to the Group CEO.

 all Technology functions in Vodafone’s operating companies will report into

Group Technology. Steve Pusey, as Group CTO, will report directly to the Group
CEO.

Page 20 of 73
 1.4 PRODUCTION LAYOUT
We spend billions of euros each year with suppliers on network and IT equipment and services
that enable us to operate our network, and on products such as mobile phones, SIM cards and
other devices that we sell to our customers.
We demand high ethical, health and safety, social and environmental standards of all our
suppliers. These are set out in our Code of Ethical Purchasing and integrated right from the start
of our engagement with suppliers, from the initial qualification process to ongoing supplier
performance management. We conduct regular site assessments to ensure compliance and we
work directly with our suppliers to help improve their sustainability performance.
To target improvements further down the supply chain, we require our suppliers to demand
similar standards of their own suppliers and check this through audits and supplier performance
management processes. We also participate in industry initiatives to raise standards across the
sector.
Handsets, network equipment, marketing and IT services account for most Vodafone’s purchases,
with the bulk of these purchases from global suppliers. The Group’s Supply Chain Management
(“SCM”) team is responsible for managing the Group’s relationships with all suppliers, except for
handsets.

The transformation of the supply chain organisation into a single community under one leadership
and the application of global material category strategies, in conjunction with local market
expertise, have enabled savings across all operating companies. This is supported by a uniform
savings methodology applied across all operating companies and the alignment of objectives
across all material categories, operations and enabling functions. Innovative sourcing methods
such as e Auctions and seamless business to business applications form a vital part in utilising the
Group’s scale. The Vodafone Procurement Company S.a.r.l. was founded in Luxembourg in the
2008 financial year and is expected to enable additional leverage of scale and scope through a
leaner procurement model.

SCM is a major contributor to the European cost reduction programme. The publicly announced
goal to save 8% of the external networks spend over two years has been overachieved.

SCM won two major industry awards in 2007: the European Leaders in Procurement Award for
Corporate Responsibility and the European Supply Chain Excellence Award in Sourcing and
Procurement.

The major suppliers to Vodafone are required to comply with the Group’s Code of Ethical
Purchasing. Further detail on this can be found in Corporate Responsibility

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The China Sourcing Centre based in Beijing, founded in March 2007, has enabled Vodafone to
introduce new suppliers from emerging markets to further enhance competitive advantage.

It is the Group’s policy to agree terms of transactions, including payment terms, with suppliers
and it is the Group’s normal practice that payment is made accordingly. The number of days
outstanding between receipt of invoices and date of payment, calculated by reference to the
amount owed to suppliers at the year-end as a proportion of the amounts invoiced by suppliers
during the year, was 37 days (2007: 34 days) in aggregate for the Group

1.5 ORGANISATIONAL POLICIES

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  Policy for surving in market.
 CSR policy as per new companies act 2013.
 New policy for working moms.
 Policies and requirements for suppliers.
 Health,safety and wellbeing.
 Code of ethical purchasing.
 Conflict minerals policy.
 Task risk management strategy.
 Code of conduct.
 Policy of broad public interest .
 Policy on publicity /advertisement .

CHAPTER 2: INDUSTRIAL ANALYSIS

2.1 INDUSTRY OVERVIEW

Vodafone India, which has invested over Rs 700 crore in the Northeast in the last one year, has
said it will further ramp up investment in the region as the telecom major aims a healthy double-
digit growth this financial year.

"The Northeast is an important and one of the fastest growing markets for us. Last year, we
invested Rs 706 crore in this region to expand our base. We will continue to expand and invest in

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this market," Vodafone India Business Head (Assam and North East) Nidhi Laura said in
Guwahati.

She, however, declined to put a number on the proposed investment for the Northeast for the
current financial year.

"The investment we put in last fiscal was for expanding our 3G and 4G networks. We also
invested on the spectrum and modernising our operations," Lauria said.

The company has expanded its 'SuperNet 4G' network to more than 253 towns and over 1,365
villages across all seven states in the region during the last few months, she added.

Talking about business, the first woman business head of the company said Vodafone enjoyed a
"good double-digit" growth during the last financial year.

Without specifying, Lauria said: "I do not see the growth slowing down. We will continue with
the same growth in the current fiscal too."

Vodafone currently has a customer base of 55 lakh in the Northeast, of which 40 lakhs are from
Assam alone.

Stating that the company is now focussing more on data usage, Lauria said: "Currently, 24 per
cent of our revenue is from data. This is a strongly growing segment. Last year, it grew by 70 per
cent on year-on-year basis. People here are very data savvy."

Talking about its manpower in the Northeast, she informed that the company has created over
70,000 direct and indirect employment opportunities.

"Out of this number, around 15,000 are our exclusive dealer associates. In the region, we have
around 500 employees on company's rolls and 24 per cent of them are women. This is a big
achievement for us in terms of women representation in the workforce," Lauria said.

Vodafone commenced its journey in the Northeast in 2008 and has invested more than Rs 2,200
crore so far in the region to expand, modernise and develop technology for customers.

Presently, Vodafone has over 5,300 cell sites, more than 300 retail touch points and over 67,000
distribution touch points across the Northeast. Recently, the
company announced offering a 50-minute free talk time to its customers in flood-affected areas to
contact anyone in case of emergencies.

This one-time service is being offered in affected regions like Kamrup, Karimganj and
Bongaigaon in Assam, Ukhrool and Bishnupur in Manipur, and in North Tripura at present.

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 2.2 CURRENT ISSUES

Vodafone has appointed Sunil sood as the chief executive offer (CEO) for this India operations.
he will be first Indian CEO of Vodafone.

He will replace martin pieters will step down on 1 st April 2015. presently, he is chief operating
officer (coo) of the company.

Martin pieters was the longest serving CEO of a telecom firm in the country and was CEO since
200%

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Under pieters leadership, Vodafone India had doubled its revenues and added more than 100
million customers. he also played important role in increasing market share of Vodafone India
and launched data services which is used by more than 57million customers.

ABOUT SUNIL SOOD

 He is graduate with a btech from iit delhi and PGDM from IIM Kolkata he is also a
graduate of Harvard business school advance management program

 In 2000, he Had join Vodafone India’s predecessor business, hutch and has held roles
leading the company’s operations in Gujarat, Kolkata and Chennai.

 He had previously worked for Pepsi in a range of Indian and international leadership
roles.

2.3 KEY COMPETITORS

 JIO

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 IDEA

 MTNL

 TATA DOCOMO

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 AIRCEL

 UNINOR

2.4 ENVIRONMENTAL SCANNING

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Vodafone is considered as one of the world’s best telecom company. It has its business in Europe,
India and many other regions. Vodafone has made its place in the global world. It has it’s
headquarter in Newbury, England. Vodafone is the company that is the world best
telecommunication provider. It has the greatest market value of around one hundred billion
pounds. It has its business in more than thirty countries and is expanding its business with a great
pace. With the partnership with countries in different regions, Vodafone has been profiling the
network. As Vodafone has been a global company, there are certain external factors that need to
be considered to evaluate the success of the company.

Political Factors
The political factors are very much influential in the way of the progress of the companies like
Vodafone as it must develop infrastructure for the company to be operational in a state. The
company is dependent on the political scenario of the state in which the country is operating.
However, in recent times there are certain things like the peace of the state and the political
instability which laid direct impact on the company. A country with political instability becomes a
war prone area and the establishment of good infrastructure for the network becomes a tiresome
task. It could be analyzed from the example that the recent conflicts in Europe have greatly
affected the company.

Economic Factors
This is one the very important dimension for the company like Vodafone. The more the states will
develop the higher are the chances of the company to expand and open its new units in the newly
developed zones. The good GDP of the country means that the people has more income and will
be more prone in adapting the latest communication technology. In this way, the overall profit of
the company will be increased, and the company will always be able to expand globally.
Moreover, the overall economic crisis the world has been facing in recent times has also a direct
impact on the company like Vodafone. The global uncertainty has made the company to change
its strategies every now and then.

Social Factors
These impacts are purely based on the local beliefs and culture of the people in which the
company is operating. This is a very dynamic domain and for the success, the company must
show flexibility in its policies pertaining to the local culture. Vodafone is basically a purely
European company, but it has changed its preferences and the related policies as per the local
social factors in which the company is being operated.

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Technological Factors
Vodafone has been famous in the world for its innovation. Vodafone has its mission to always
follow the contemporary trends in the technological and communication sphere. There are many
rivals of Vodafone now. It is incumbent for the company to go one step ahead of the technology.
The products Vodafone is producing are mostly technological related, so it is one of an essential
factor which the company needs to keep in view while chalking out the policies and assessing the
forthcoming launching of devices and the features of the devices. Vodafone has been the
technology driven company and focusing on the latest trends of technology should have been the
fundamental maxim which the company should follow.

Legal Factors
For the global company like Vodafone which has many rivals. Vodafone must be very much
vigilant about the legal issues like copy and other pirated issues. States has many times blamed
Vodafone for the legal issues pertaining to the sphere of infrastructure. In this perspective,
Vodafone must face many penalties. Apart from this many time, Vodafone has been accused of
not paying much to its employees as compared to its rivals. The individual working in Vodafone
often leaves and joins the rival companies, which maximizes the risks of leakage of innovative
ideas. Vodafone should chalk out some legal bindings in this perspective. Moreover, Vodafone
should always abide by the legal issues of the domain to increase the customers and to maintain a
positive image in the market which will always help in gaining the trust of the customers.

Environmental Factors
With the rise of globalization, people have become more and more ethical and ethics oriented.
The consumers always expect from their favorite brand to be socially responsible. They always
want from their brand to play a vital role in the betterment of the society. The working conditions
of the company must also be good enough to attract the best of the individuals to be the part of the
Vodafone family.   
Vodafone has been a company which is highly dynamic in nature. To maintain the market and
expand the network, Vodafone should always consider the aforementioned facts and analysis.
These external, as well as internal factors are the major ingredients in the success of the company.
They clearly define the agenda the company should follow to avoid the failure.

2.5 PORTERS FIVE FORCES MODEL OF VODAFONE

There is continuing interest in the study of the forces that impact on an organisation, particularly
those that can be harnessed to provide competitive advantage. The ideas and models which
emerged during the period from 1979 to the mid-1980s (Porter, 1998) were based on the idea that
competitive advantage came from the ability to earn a return on investment that was better than
the average for the industry sector.
As Porter's 5 Forces analysis deals with factors outside an industry that influence the nature of
competition within it, the forces inside the industry (microenvironment) that influence the way in

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which firms compete, and so the industry's likely profitability is conducted in Porter's five forces
model. A business must understand the dynamics of its industries and markets in order to compete
effectively in the marketplace. Porter (1980a) defined the forces which drive competition,
contending that the competitive environment is created by the interaction of five different forces
acting on a business. In addition to rivalry among existing firms and the threat of new entrants
into the market, there are also the forces of supplier power, the power of the buyers, and the threat
of substitute products or services. Porter suggested that the intensity of competition is determined
by the relative strengths of these forces.
Main Aspects of Porter's Five Forces Analysis
The original competitive forces model, as proposed by Porter, identified five forces which would
impact on an organization's behavior in a competitive market. These include the following:
• The rivalry between existing sellers in the market.
• The power exerted by the customers in the market.
• The impact of the suppliers on the sellers.
• The potential threat of new sellers entering the market.
• The threat of substitute products becoming available in the market.
Understanding the nature of each of these forces gives organizations the necessary insights to
enable them to formulate the appropriate strategies to be successful in their market.

Force 1: The Degree of Rivalry

The intensity of rivalry, which is the most obvious of the five forces in an industry, helps
determine the extent to which the value created by an industry will be dissipated through head-to-
head competition. The most valuable contribution of Porter's "five forces" framework in this issue
may be its suggestion that rivalry, while important, is only one of several forces that determine
industry attractiveness.
• This force is located at the center of the diagram;
• Is most likely to be high in those industries where there is a threat of substitute products; and
existing power of suppliers and buyers in the market.

Force 2: The Threat of Entry

Both potential and existing competitors influence average industry profitability. The threat of new
entrants is usually based on the market entry barriers. They can take diverse forms and are used to
prevent an influx of firms into an industry whenever profits, adjusted for the cost of capital, rise
above zero. In contrast, entry barriers exist whenever it is difficult or not economically feasible
for an outsider to replicate the incumbents' position (Porter, 1980b; Sanderson, 1998) The most
common forms of entry barriers, except intrinsic physical or legal obstacles, are as follows:
• Economies of scale: for example, benefits associated with bulk purchasing;
• Cost of entry: for example, investment into technology;
• Distribution channels: for example, ease of access for competitors;
• Cost advantages not related to the size of the company: for example, contacts and expertise;

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• Government legislations: for example, introduction of new laws might weaken company's
competitive position;
• Differentiation: for example, certain brand that cannot be copied (The Champagne)

Force 3: The Threat of Substitutes

The threat that substitute products pose to an industry's profitability depends on the relative price-
to-performance ratios of the different types of products or services to which customers can turn to
satisfy the same basic need. The threat of substitution is also affected by switching costs - that is,
the costs in areas such as retraining, retooling and redesigning that are incurred when a customer
switches to a different type of product or service. It also involves:
• Product-for-product substitution (email for mail, fax); is based on the substitution of need;
• Generic substitution (Video suppliers compete with travel companies);
• Substitution that relates to something that people can do without (cigarettes, alcohol).

Force 4: Buyer Power

Buyer power is one of the two horizontal forces that influence the appropriation of the value
created by an industry (refer to the diagram). The most important determinants of buyer power are
the size and the concentration of customers. Other factors are the extent to which the buyers are
informed and the concentration or differentiation of the competitors. Kappenberg (1998) states
that it is often useful to distinguish potential buyer power from the buyer's willingness or
incentive to use that power, willingness that derives mainly from the "risk of failure" associated
with a product's use.
• This force is relatively high where there a few, large players in the market, as it is the case
with retailers a grocery stores;
• Present where there is many undifferentiated, small suppliers, such as small farming
businesses supplying large grocery companies;
• Low cost of switching between suppliers, such as from one fleet supplier of trucks to another.

Force 5: Supplier Power

Supplier power is a mirror image of the buyer power. As a result, the analysis of supplier power
typically focuses first on the relative size and concentration of suppliers relative to industry
participants and second on the degree of differentiation in the inputs supplied. The ability to
charge customers different prices in line with differences in the value created for each of those
buyers usually indicates that the market is characterized by high supplier power and at the same
time by low buyer power (Porter, 1998). Bargaining power of suppliers exists in the following
situations:
• Where the switching costs are high (switching from one Internet provider to another);
• High power of brands (McDonalds, British Airways, Tesco);
• Possibility of forward integration of suppliers (Brewers buying bars);

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• Fragmentation of customers (not in clusters) with a limited bargaining power (Gas/Petrol
stations in remote places).
The nature of competition in an industry is strongly affected by suggested five forces. The
stronger the power of buyers and suppliers, and the stronger the threats of entry and substitution,
the more intense competition is likely to be within the industry. However, these five factors are
not the only ones that determine how firms in an industry will compete - the structure of the
industry itself may play an important role. Indeed, the whole five-forces framework is based on an
economic theory known as the "Structure-Conduct-Performance" (SCP) model: the structure of an
industry determines organizations' competitive behavior (conduct), which in turn determines their
profitability (performance). In concentrated industries, according to this model, organizations
would be expected to compete less fiercely, and make higher profits, than in fragmented ones.
However, as Haber erg and Riegle (2001) state, the histories and cultures of the firms in the
industry also play a very important role in shaping competitive behavior, and the predictions of
the SCP model need to be modified accordingly.

Analysis to Vodafone's Porter's 5 Forces

The Porter's Five Forces model is a simple tool that supports strategic understanding where power
lies in a business situation. It also helps to understand both the strength of a firm's current
competitive position, and the strength of a position a company is looking to move into. Even
though the Five Force framework focuses on business concerns rather than public policy, it also
emphasizes extended competition for value rather than just competition among existing rivals,
and the simplexes of its application inspired numerous companies as well as business schools to
adopt its use (Wheelan and Hunger, 1998).
With a clear understanding of where power lies, it will enable a company to take fair advantage of
its strengths, improve weaknesses, and avoid taking wrong steps. Therefore, to apply this
planning tool effectively, it is important to understand the situation and to look at each of the
forces individually.
In conducting an analysis of Porter's Five Forces, it is required to brainstorm all relevant factors
for the company's market situation, and then check against the factors presented for each force in
the diagram above. The next step is to highlight the key factors on a diagram and summarize the
size and the scale of the force on the diagram. It is suggested to use signs, as for instance, "+" and
"--" signs for the forces moderately in company's favor, or for a force strongly against.
After identifying favorable and unfavorable forces for the company's performance and industry's
attractiveness, it is important to analyses the situation and examine the impacts of the forces. One
of the critical comments made of the Five Forces framework is its static nature, whereas the
competitive environment is changing turbulently. Are the five forces able to foresee industry
expansion? Is it the corporate strategist's goal to find a position in the industry where his or her
company can best defend itself against these forces or can influence them in its favor, or is the
goal to become part of the ongoing commerce with the intention to produce innovative ideas that
will expand the size of the industry? Is it true that the environment poses a threat to the
organisation, leading to the consideration of suppliers and buyers as threats that need to be
tackled, or does it offer the ground for a constitutive industry player co-operation?
By thinking through how each force affects a company, and by identifying the strength and
direction of each force, it provides with an opportunity to identify the strength of the position and
the ability to make a sustained profit in the industry.

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CHAPTER 3: MARKETING STRATEGIES

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 3.1 PRODUCTS OF COMPANY

Products and services

We offer a wide range of products and services including voice, messaging, data and fixed line solutions and

devices to assist customers in meeting their total communications needs .

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Handsets
Voice revenue
£28.0bn
(2009: 26.9bn; 2008: 24.2bn)
Vodafone branded handsets shipped
5.4m
(2009: 10.7m; 2008: 10.0m)

Product focus: Vodafone branded handsets

Vodafone 845 (left) Android smartphone Vodafone 150 (right) ultra-low-cost handset.

Apple iPhone 3GS

Voice usage (billions of messages)

SMS usage (billions of messages)

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 Messaging revenue
£4.8bn
(2009: £4.5bn; 2008: £4.0bn)
Our wide range of handsets covers all our customer segments and price points and is available in
a variety of designs.

 66 new models released in the 2010 financial year.

 23 exclusive handsets launched.

Smartphones
 A handset offering advanced capabilities including access to email and the internet.
 24% of handset sales in Europe.
 All leading brands represented including iPhone in 14 countries.
 Launched two tailor-made Vodafone 360 handsets: Samsung H1 and Samsung M1.

Vodafone branded handsets

 Enabling millions of people in emerging markets to share the benefits of mobile
technology.
 Prices start from less than US$15.
 16 new models released under our own brand.
 Low cost combined with high-end features, such as touch screen and mobile internet
capability.

Voice & messaging services

We provide value focused pricing through unlimited bundles of voice and text services.

 Voice services incorporate revenue for national, international and roaming calls.
 SMS services include text messages as well as multiple media, such as pictures, music,
sound, video and text.

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The core functionality and use of handsets continues to be voice and text messaging services.
Many different tariffs and propositions are available, targeted at different customer segments, and
include a range of unlimited usage offers which have been particularly appealing to customers.

With sophisticated handsets becoming readily available, customers are increasingly using their
mobile phones to complement their lives in new and innovative ways. Data usage continues to
grow rapidly fueled by large numbers of intuitive internet enabled devices (‘smartphones’), many
with touch screens such as the iPhone and BlackBerry ® Storm™, and transparent pricing available
through our “internet on your mobile” unlimited browsing tariff. Instant messaging is available
with Yahoo! and MSN and we offer integrated services from leading internet brand partners
including YouTube, eBay, Google™ and Google Maps™.
Our partnership agreements with leading companies, such as RIM, Samsung and Google, have
enabled us to be first to market with cutting- edge devices such as the BlackBerry Storm,
Samsung H1 and Samsung M1 (our two tailor-made handsets that support our Vodafone 360
proposition) and Google Nexus One.

Available in 31 markets including partner markets, Vodafone branded devices are designed to
meet a range of customer needs and preferences – from low cost phones offering simple voice and
text, through fashion and design influenced, to competitively priced mobile internet devices with
cutting-edge smartphone functionality including touch screen and mobile internet capability.
During the 2010 financial year Vodafone launched its most affordable handset to date, the
Vodafone 150, which retails for less than US$15 unsubsidized, giving millions of people in
emerging markets the opportunity to share in the benefits of mobile technology for the first time.

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 3.2 4P’S

Vodafone is one of the world’s greatest telecommunication brands and this article discusses
the Marketing mix of Vodafone. The company employs over 65,000 staff worldwide and enjoys a
generous customer base of 130 million. The business is in operation in 31 countries worldwide.
Despite the competition from similar companies, Vodafone, in India is growing tremendously as a
company like in other parts of the world as it tries to roll out its identity into new markets. In fact,
the company is already listed in the New York Stock Exchanges, thus, this has helped it in
gaining global recognition.

Vodafone India operations widened its base in the year 2007 when it bought majority of stake in
Hutchison Telecommunications of Hong Kong for $11 billion. In India, it operates as a joint
venture with Essar. Vodafone India’s domestic partner is the Piramal Group, which has its 11%
stake.

Product in the marketing mix of Vodafone

Vodafone offers a wide range of products including Voice, messaging, data and fixed line
solutions. The aim is to assist the customers with their communication needs. The core use and
functionality of handsets continue to be text messaging and voice services. To cater for different
customer needs, the company offers a wide range of tariffs targeted at different customer
segments.

With data usage and the need of sophisticated handsets becoming a necessity, customers are
looking for the best product quality and that is what Vodafone continues to do. Therefore,
Vodafone branded devices and services are designed to meet a wide range of customer
preferences and needs.

The products include the following:

 Vodafone branded phones

 Smartphones
 Voice and messaging services
 Handsets
 Internet services
 Value added services

Place in the marketing mix of Vodafone

Vodafone India Limited, based in Mumbai, is the second largest mobile network in the country
after Airtel by the number of subscribers. As of December 2013, the company had a total of 160
million subscribers. To strengthen its position in the country, Vodafone bought Essar for $5.46

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billion in 2011. This means that Vodafone now owns more than 74% of the Indian Business in the
Essar take-over while the Indian investors in accordance with the country’s laws will own the
remaining 26%. The company’s marketing strategy is to focus on the customer and lead from the
front when it comes to providing revolutionary telecommunication services.

The company continues to improve its services and currently provides 3G services based on
GSM technology. However, there are plans to upgrade the network to 4G. Although most of the
products are sold through the company’s customer care centers and shops, it also sells its products
through independent retailers. The company has a very friendly and experienced team of customer
care staff to ensure that the customer’s needs, queries and complaints are attended to. The
Vodafone stores are the major service providers to customers and there are large numbers of these
stores in all corners of the country. More importantly, Vodafone has an amazing network and has
one of the most powerful cell phone range amongst all its competitors. Thus, the presence and
distribution of Vodafone is wide spread in India.

Promotions in the marketing mix of Vodafone

Vodafone frequently uses local name recognitions to reach and maintain trusts of its local
customers. Mary Komi, the famous boxer and Olympian is its global brand ambassador. In
addition, to help promote its global appeal and to communicate its brand value, the
telecommunication giant often uses famed sports stars like David Beckham, Michael Schumacher
and others.

It also advertises its brand value and offers through billboards, TV commercials and other social
media outlets to reach many people. The most famous move by vodafone worldwide was the use
of vodafone zoo zoos in India during the Indian premier league. In the marketing mix of
Vodafone, promotions can be the strongest point for Vodafone due to Vodafone Zoo Zoos.
Vodafone zoo zoos are the most famous brand ambassadors for them and are recognized by one
and all over the world. In addition, the company sends frequent press releases to keep their
customers informed of new products and offers. The company also undertakes market research to
determine whether its services and products are useful to the consumers.

Price in the marketing mix of vodafone

Vodafone’s products and services are competitively priced and easily accessible to as many
people as possible. To beat the competition, the company has ensured that it provides high quality
services such as providing high speed data and good network range as compared to what the
competition is offering. Because it sells different services and products, it offers various price
structures to suit different customer needs. Mini as well as jumbo prepaid and postpaid plans are
available. Recently, Vodafone has doubled its 2G and 3G internet rates. This however will be
followed very soon by its rivals as well as it has become impossible to contain data rates off late.

For instance, it offers postpaid and prepaid options as well as different tariffs. Another
important pricing strategy is that the company offers reward points for specified sum of money
spent on purchasing airtime vouchers or data bundles. With a pan India presence, Vodafone is

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surely one of the leaders in the telecom sector. However, it faces tough competition from other
giants in this field like Airtel, R-Com and Idea.

3.3 STP (SEGMENTATION, TARGETING & POSITIONING)

Vodafone is one of the biggest names in wireless technology, and is continuing to grow a solid,
loyal customer base because the company offers excellent product along with excellent customer
service.
Vodafone has an interesting history, back to 1984, when it was still a subsidiary of the well-
known Racal Electronics Plc. In September 1991, the Vodafone Group Plc decided to separate
itself from Racal Electronics Plc, they later merged with another company, the Air Touch
Communications Inc, in July 2000.
In 2001, this wireless company first introduced instant messaging on their networks, to provide
for a faster way to communicate among their users. The company also launched the first ever 3G
service in Europe with their innovative mobile connect GPRS/3G data card in 2004. In February
2007, the company had another major milestone when it partnered with Yahoo and Microsoft to
launch instant messaging services that can easily be accessed using either a personal computer or
a mobile phone. This is one of the milestones that made it into the wireless giant it is today.
The company continues to offer a variety of services, including data, messaging, voice and
broadband. It's continuous advancement in the data services, they offer by developing its 3G
networks and the capabilities of various handsets. It's a mobile service that's easy to use, with
low-cost telephone line and even DSL broadband connection. It also provides you monthly billing
cycle-paid agreement or even a contract. And is known for its best customer services.
BACKGROUND:-(INTERNATIONAL EXPANSION STRATEGIES).
Vodafone Group Plc is the world's leading International Mobile telecommunications Group, with
a major presence in Europe, the Middle East, Africa, Asia Pacific and the United States through
the Company's subsidiary undertakings, joint ventures, associated undertakings and investments.
The basic concept of this case is to look at Vodafone's future expansion, growth and global
strategies within the concept of internationalization and competitive advantage issues. The reason
to launch Vodafone in Mexican market is to gain profitability, gaining high revenues by doing
better business in more areas or internationally. Because if Vodafone will not be launched in
Mexico some other mobile company will do the same. Being one of the world's largest company
it's easy for Vodafone to enter the Mexican market and capture it.
PESTEL ANALYSIS: -
It is the technique of environmental scanning of any industry based on factors like political,
economic, social, technological, legal and environmental.
PESTLE analysis uses a framework of external factors for macro-environmental scanning of the
industry to help in taking advantage of opportunities and making contingency plans for threats.
SEGMENTATION, TARGETING AND POSITIONING: -

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It together comprises a three-stage process;
Segmentation (identifying meaningfully different groups of customers)
Targeting (selecting which segment to serve)
Positioning (implementing chosen image and appeal to chosen segment) it further includes
product, price, distribution and promotion.
SEGMENTATION: -
Segmentation is the process of splitting (segmenting) the entire market into smaller groups.
Demographics is the most common variable of market segmentation that includes age, gender,
income, geographic, psychographic and behavioural.For launching a Vodafone in Mexican
market, the product is for both the genders ,of every area with varying ages and incomes.
Markets are made up of many distinct groups of people who have common characteristics as
consumers. Some of those groups may not be immediately obvious. All of them command
tremendous buying power. But they direct it to products and services that address them as a
highly individual subdivision or segment of the market.
Define those market segments right and you may even end up dominating the market. Because the
more you know about a market segment:

 The better you can provide a product or service that attracts it.
 The better you can create marketing materials that appeal to it.
 The more cost-effectively you can direct them at the markets that respond the best.

The easier it is to position your company and product and build brand loyalty. It's hard to
successfully address a large, vague, undifferentiated market. It's easy to address a tightly focused,
highly individualized group of people with clearly defined preferences and needs. Market
segmentation isolates those groups and makes them accessible. It helps your organization
understand them and reach them and profit too.
TARGETING: -
In this step one or more segment is targeted. Generally, depend on several factors.

 How well are existing segments served by other manufacturers?

 How large is the segment, and how can we expect it to grow?
 Do we have strengths as a company that will help us appeal particularly to one group of
consumers?

It will be more difficult to appeal to a segment that is already well served than to one whose needs
are not currently being served well. Mexican market is already being served well but Vodafone
being a giant can capture the market by providing equally better or more advanced services.
POSITIONING: -
Positioning basically involves implementing the targeting.
Product (premium, basic)
Price (premium, low price, value)

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Distribution (intensive, selective, exclusive)
Promotion (prestige, fun, powerful)
Being operationally excellent firm, by maintain exceptional efficiency, the firm providing reliable
service to the customer at a significantly lower cost. Vodafone can capture the market. It’s
customer intimate firm which excel in serving the specific needs of the individual customer quiet
well. Technologically it is providing the most advanced products currently available.
COMPETITOR ANALYSIS AND MARKET ENTRY STRATEGY: -
It's a critical part of firm's activities. Competitor analysis has several important roles in strategic
planning;

 It helps management to understand their competitive advantages/disadvantages relative to

competitors.
 It generates understanding of competitors past, present and future strategies.
 It gives an informed basis to develop strategies to achieve competitive advantage in the
future.
 Also help forecast the returns that are made from future investments i.e. how will
competitors respond to a new product or pricing strategy?

Entering a new market is always a challenge’s size of the country, number of opportunities and
geographical size matters precisely. Solid market entry strategy needs proper market research to
know existing opportunities, understand the competitive landscape and to know about potential
clients. A market entry strategy must be developed that fits company’s objectives, timelines and
budget. A successful Market Entry Strategy includes, assessing the feasibility of the product in
market, what are the industry trends, what potential competitors are doing and what pains clients
are facing that can address. If the market research reveals a robust opportunity, then it is time to
develop your market entry strategy with a trusted partner that can not only write the strategy, but
also help you implement it, in market.

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 3.4 DISTRIBUTION CHANNEL

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Page 45 of 73
Page 46 of 73
 3.5 PROMOTION STRATEGIES
Promotion of the Re-branding to the public
Conventionally if we see, for any rebranding to be promoted requires ample period. But this
challenge was readily taken by Star Network and Maxus, to make it as fast as possible by road
blocking the channels on the day of rebranding taken place. Since Star is the leading network in
India, this platform proved itself to be very beneficial for the launch of the Vodafone. This not
only helped in promoting the brand awareness but also breaks the clutter going on the most
happening sector of telecom. The print media came into picture on 21st September one day after
the splash from the television.

While the re-brand campaign was doing their work on television on the other hand the company
was preparing itself to fight the price war, which was again very important factor firstly in
telecom sector and secondly in the Indian market.

Advertising agency that proved the success of Vodafone

O&M also introduced four commercials, which had animated boy and a girl who launched the
logo of this new brand to consumers. The four creatives which were merely of 5 seconds included
the duo peeping over the wall just to see the logo; parasailing with the logo flying high behind
them; releasing a rocket bomb where the explosion in the air reveals the brand logo; and last was
the trendy one in which curtain was raised to introduce the logo.

Another bunch of four advertisements casted the very old Hutch dog "pug". These commercials
were of 10 seconds and they shot pug in the situations where he literally, saw red, color created
the visual impact on the consumers this strategy made the public remember the color of the brand.
The pug was shown in a basket that was red in color, popping from a red cart, drying itself on a
mat which was also red in color, finally hiding itself in a beautiful red color blanket. Here also the
target was fulfilled with the help of the punch line "Hutch is now Vodafone".

The print ads were working in their own way, in various languages and in various dailies. These
print ads were made very simple as in a still shot of the pug was taken inside a red colored kennel.
The same creative was used on the outdoor hoardings as well, in all the 16 circles in which
Vodafone was now operating.

It wasn't easy as it seems to be to integrate the two brands like Hutch and Vodafone. Hutch as is
known is a subtle, understand the brand, while globally, Vodafone represents high energy,
dynamics and young vitality, all these were represented by its bright red speech mark logo. And
because of all this it always had a very energetic background music and feel of the ads.

Vodafone ZOOZOOZ
Innovation is always a part of advertisements and the advertising agencies reach out for new ways
to capture the prospective consumer's heart. Vodafone capitalizes on the innovative ideas and
always came with the new advertisements that took the brand on heights always. Out of all the
commercials launched by Vodafone, ZOOZOOZ are the best.

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O&M the mastermind behind Vodafone ZooZooZ Advertisements and the main objective was to
set the position of Vodafone as an innovative leader in the mobile services sector. The promotion
strategy was to hit massive levels by maximizing the target audience. IPL-2 was the best option
for Vodafone to do go for. The advertising strategy behind it proved itself from the fact that the
name Zoozooz got coupled with the brand Vodafone and gathered more publicity and reception
than IPL. Repetition of the advertisements of Zoozooz may bore the viewers, so O&M came up
with new Zoozooz Ad every day. Zoozooz were the new brand ambassador for Vodafone, has
created a for in the advertising industry. Zoozooz succeeded in giving the exact makeover
Vodafone was looking for along with amazing brand presence.

CHAPTER 4: FINANCIAL ANALYSIS

4.1 SOURCE OF FINANCE

Assets

Intangible assets
At 31 March 2010 our intangible assets were £74.3 billion with goodwill comprising the largest
element at £51.8 billion (2009: £54.0 billion). The increase in intangible assets resulting from the

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acquisition of Vodacom and the £1.5 billion of additions was offset by amortization of £3.5
billion and net impairment losses of £2.1 billion.

Property, plant and equipment

Property, plant and equipment increased from £19.3 billion at 31 March 2009 to £20.6 billion at
31 March 2010 predominantly because of £5.0 billion of additions and £1.6 billion in relation to
acquisitions which more than offset the £4.5 billion of depreciation charges.

Investments in associates
Investments in associates increased from £34.7 billion at 31 March 2009 to £36.4 billion at 31
March 2010 mainly as a result of our share of the results of associates, after deductions of interest,
tax and non-controlling interest which contributed £4.7 billion to the increase, mainly arising
from our investment in Verizon Wireless, and was partially offset by £1.4 billion of dividends
received and unfavorable foreign exchange movements of £1.1 billion.

Other non-current assets

Other non-current assets mainly relate to other investments which totaled £7.6 billion at 31 March
2010 compared to £7.1 billion at 31 March 2009. The increase was primarily because of an
increase in the listed share price of China Mobile.

Current assets
Current assets increased to £14.2 billion at 31 March 2010 from £13.0 billion at 31 March 2009.

Total equity and liabilities

Total equity shareholders’ funds

Total equity shareholders’ funds increased from £86.2 billion at 31 March 2009 to £90.4 billion at
31 March 2010. The increase comprises primarily the profit for the year of £8.6 billion less equity
dividends of £4.1 billion.

Borrowings
Long-term borrowings and short-term borrowings decreased to £39.8 billion at 31 March 2010
from £41.4 billion at 31 March 2009 mainly because of foreign exchange movements and bond
repayments during the year.

Taxation liabilities
Current tax liabilities decreased from £4.6 billion at 31 March 2009 to £2.9 billion at 31 March
2010 mainly because of the agreement of the German tax loss claim. The deferred tax liability
increased from £6.6 billion at 31 March 2009 to £7.4 billion at 31 March 2010 mainly due to
deferred tax arising on the acquisition of Vodacom.

Other current liabilities

The increase in other current liabilities from £13.8 billion at 31 March 2009 to £14.6 billion at 31
March 2010 was primarily due to foreign exchange differences arising on translation of liabilities

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in foreign subsidiaries and joint ventures. Trade payables at 31 March 2010 were equivalent to 31
days (2009: 38 days) outstanding, calculated by reference to the amount owed to suppliers as a
proportion of the amounts invoiced by suppliers during the year.

Contractual obligations and contingencies

A summary of our principal contractual financial obligations is shown below. Further details on
the items included can be found in the notes to the consolidated financial statements. Details of
the Group’s contingent liabilities are included in note 29 to the consolidated financial statements.

Equity dividends

The table below sets out the amounts of interim, final and total cash dividends paid or, in the case
of the final dividend for the 2010 financial year, proposed, in respect of each financial year.

We provide returns to shareholders through dividends and have historically paid dividends semi-
annually, with a regular interim dividend in respect of the first six months of the financial year
payable in February and a final dividend payable in August. The directors expect that we will
continue to pay dividends semi-annually.

In November 2009 the directors announced an interim dividend of 2.66 pence per share
representing a 3.5% increase over last year’s interim dividend. The directors are proposing a final
dividend of 5.65 pence per share representing an 8.7% increase over last year’s final dividend.
Total dividends for the year increased by 7% to 8.31 pence per share.

The directors intend that dividend per share growth will be at least 7% per annum for the next
three financial years ending on 31 March 2013 assuming no material adverse foreign exchange
movements. We expect that total dividends per share will therefore be no less than 10.18p for the
2013 financial year. See "Guidance" for the assumptions underlying this expectation.

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 4.2 RATIO ANALYSIS

RATIO           2009                2008   

B/W

ROCE 5857*100/12,475 4.69% 10047*100/10,52 9.54%

=OPERATING 2 97
W

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PROFIT * 100 /
TOTAL ASSETS –
C. LIABILITIES

MARGIN (net profit 5857*100/41,017 14.27% 10,047*100/35,47 28.31%

ratio) =OPERATING 8
W
PROFIT * 100 /
SALES

ASSETS TURN 41,017/12,4752 0.32Times 35,478/10,5297 0.33times

OVER RATIO=
W
SALES / TOTAL
ASSETS – C.
LIABILITIES

COST OF SALES 25,842*100/41,01 63.00% 21,890*100/35,47 61.70%

RATIO= COST 7 8
B
OF SALES*100/SAL
ES

STOCK TURN 412*365/25,842 5.81 417*365/21,890 6.95

OVER RATIO IN DAYS DAYS
B
DAYS = STOCK *
365 / COST OF
SALES

FIXED ASSET 41,017/13,9670 0.29 35,478/11,8546 0.29

RATIO TURN
B
OVER IN
DAYS=SALES/

FIXED ASSTES

TRADE 13,398*365/25,84 189.2DA 11,962*365/21,89 199.4DAY

CREDITORS TURN 2 YS 0 S
W
OVER RATIO =
CREDITORS * 365 /
COST OF SALES

TRADE DEBTORS 7662*365/41,017 68.18DA 6551*365/35,478 67.39DAY

TURN OVER YS S
W

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RATIO= DEBTORS
* 365  / SALES

CURRENT RATIO= 13,029/27,947 0.46 8724/21,973 0.39

CURRENT ASSETS
B
/ C. LIABILITIES

QUICK RATIO= C. 13,029 – 0.45 8,724 – 0.37

ASSETS / C. 412/27,947 417/21,973
B
LIABILITIES –
STOCK

GEARING RATIO= 39,975*100/12,47 32.04% 28,826*100/10,52 27.37%

DEBT * 100 / 52 97
W
EQUITY + DEBT

DEBT TO EQUITY= 39,975*100/84,77 47.15% 28,826*100/76,47 37.69%

DEBT * 100 / 7 1
W
EQUITY

RETURN ON 3,080*100/84,777 3.63% 6,756*100/76,471 8.83%

EQUITY= PROFIT
W
AFTER TAX * 100/
EQUITY

SALES PER 41017/79,097* £51856 35,478/72,375 £49016

EMPLOYEE=
B
RVENUE/NO. OF
EMPLOYEES

MARK UP 15,175*100/25,84 58.72% 13,588*100/21,89 62.07%

RATIO=GROSS 2 0
W
PROFIT*100/COST
OF SALES

GROSS PROFIT 15,175*100/41,01 36.99% 13,588*100/35,47 38.29%

RATIO= GROSS 7 8
W
PROFIT*100/

REVENUE

Page 53 of 73
RATIO ANALYSIS

Ratio analysis is a method which can be used to evaluate the account of business. Ratio analysis is
an important aspect of the analysis because the ratio analysis provides quick and easy result to the
organisation. Ratio analysis is easy to go through as compared to balance sheet and income
statement. This analysis also helps company to determine whether the organisation is achieving its
desired goals and helps to evaluate how its competitors are going on. (Jones, Ed 2006; Dyson,
2007)

The ratios are divided into 4 categories:

 Liquidity ratio:    1. Current asset ratio

2. Acid test ratio

 Profitability ratio:  1. Return on capital employed (ROCE)

2. Gross profit ratio

3. Mark up ratio

4. Net profit ratio

 Efficiency ratio:    1. Stock turnover ratio

2. Fixed asset turnover ratio

3. Trade debtor collection period

4. Trade creditor payment period

 Investment ratio:     1. Dividend yield ratio

2. Dividend cover ratio

3. Earnings per share ratio

4. Price ratio

5. Capital gearing ratio

INTERPETATION OF RATIOS

 Profitability ratio:  These ratios helps organisation to analyses how profitable is business
operating. This is the key ratio o it is watched by the internal management and external
shareholders. This ratio includes following ratios:

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1.  Return on capital employed: This ratio tells how efficient company is using its capital
employed. This also helps organisation to know whether the organisation is generating the
adequate profit in relation to the investment. As in the case of VODAFONE the ROCE in 2008
was 9.54% and then this fall in 2009 to 4.69%. As the figures shows the operating profit in 2008
was 10,047 and in 2009 operating profit was 5,857 as it dropped almost to half and capital
employed increased to almost 1/4th so return on capital employed is going down and is not good
for the organisation. So, the VODAFONE need to invest their capital in right manner for the
future growth. (Jones, Ed 2006; www. findoutinfo.com)

2.  Gross profit ratio: This ratio plays the vital role in business. This ratio tells about the profit
earned through selling the product or service after buying from wholesaler. In 2008 gross profit
ratio for VODAFONE was 38.29% where as in 2009 the ratio dropped to 36.99% there is
decrease of almost 1.2% which indicates that net profit is going down. The reason for the
deprecation might be the rise in goodwill cost and equipment’s which company might have
bought in this time span. But even though due to world economic recession the company did not
have the huge difference between the gross profit between year 2008 and 2009. (Jones, Ed 2006;
www.zimbio.com)

3.  Mark up ratio: This is gross profit divided by the cost of sales*100. In 2008 the ratio was
62.07% and in 2009 the ratio again came down to 58.71% this might be because as it was the
period of world recession so in order to survive in the market VODAFONE might have reduced
their markup price so in order to retain more customers during the global slowdown.
(Dyson,1991)

4.  Net profit ratio and Margin ratio: This is another financial indicator and one of the most
important ratios. This ratio is calculated after all the expenses are paid by the organisation. This
can also help the organisation to compare its net profit for the previous years. The net profit ratio
for VODAFONE in 2008 was 28.31% whereas in 209 it was 14.27%. The reason behind the
downfall of the net profit ratio is might be VODAFONE has increased their administrative cost
and exceptional operating items due to which net profit ratio may decrease. As the operating
profit has decreased so that could be the other reason for the downfall of net profit ratio. Margin
ratio: This ratio helps the organisation to analyses the profit on the goods and services sold in the
year. In the case of VODAFONE there is no variation in the profit margin for the year 2008 is
14.27% and 2009 is 28.31%. The reason behind this must be that there is competition in the
telecommunication sector, so they might have increased their margin to get more revenue. 
(Pizzly, 2001; www.findtheinfo.com; Jones, Ed 2006; www.zimbio.com)

 Efficiency ratio:  These ratios help in analyzing the effectiveness of business. This also
helps to tell how long it will take for the organisation to pay its debtors and creditors. This
includes following ratio:
5.  Trade debtor’s turnover ratio: this ratio helps to calculate how long and how many days will
customer take to pay his debt to the company. This can be worked on the daily, weekly and
monthly basis. In the case of VODAFONE debtors take 67.39 days in 2008 and in 2009 the days
rose to 68.18 days. So, it is almost the same in both the years without any major increase in the
days. So, the reason might be that VODAFONE is using its current assets efficiently. To improve
more in this sector VODAFONE, cut their debtors day to 1 month which will help them to run
more efficiently so that would be good for the organisation. (Jones, Ed 2006; www.zimbio.com)

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6.  Trade creditor’s turnover ratio: This is opposite to trade debtors and shows how long
organisation takes to pay its creditors. The more the creditors days the good it is for the
organisation. In case of VODAFONE the creditor’s day in 2008 was 199.4 days and in 2009 the
number of days fall to 189.2 days. As the number of days decreased to 10 days in a period of 1
year this might be because the capital must have been used to pay the acquisition and this might
have risk for the company and other reason might be that VODAFONE has lot of contracts going
on, so this might not be good for the organisation.  (Jones, Ed 2006; www.zimbio.com)

7.  Stock turnover ratio in day: This ratio measures the speed with which stock moves out of
business. This ratio varies from business to business and product to product. The stock turnover
ratio for VODAFONE in 2008 was 6.95 days and in 2009 it was 5.81 days. So, this has stock
turnover ratio has improved in 2009 as compared to 2008 so it is good for the company because
the sell their stock faster in 2009 as compared to 2008. Since the VODAFONE is the
telecommunication company so they will have lower stock turnover compared to other
organisation. (Jones, Ed 2006; Dyson, 2007)

8.  The fixed asset turnover ratio: This ratio compares sales to total assets employed. Business
with large infrastructure will have lower ratios and vice versa. The fixed asset turnover ratio is
same in 2008 and 2009 as 0.29. As the VODAFONE is Telecommunication Company so they
don’t have big machinery or such big infrastructure like multinationals, so it doesn’t make a big
difference in this ratio. (Jones, Ed 2006; www.zimbio.com)

 Liquidity ratio: These ratios are obtained from balance sheet and tell how easily
organisation can pay its debt, loan creditor such as bank and financers are particularly
interested in these ratios. These ratios are divided into 2 parts:
9.  Current ratio: This shows whether short term assets cover short term liabilities. In the case of
VODAFONE in 2008 the ratio was 0.39 where as in 2009 this increased to 0.46. the ratio in 2009
is good as compared to 2008 so the VODAFONE has improved in this aspect but overall this ratio
should be 1.0 or more so this shows even though VODAFONE has made improvement in this
ratio compared to 2008 but still the organisation might be in trouble so they should be careful
when dealing with the liabilities and this could also because of the expansion plans which might
be helpful for the organisation in near future. (www.zimbo .com)

10.  Quick ratio: This is also called acid test ratio. This measure short term liquidity. In 2008
VODAFONE has the result as 0.37 where as in 2009 this figure rose 0.45 which is good for the
organisation but still this should be VODAFONE might need some extra funds or should opt to
sanction some long-term loans to improve the liquidity position and this should be helpful in the
future. (Dyson, 2007; www.zimbo .com)

 Other ratios:
11. Gearing ratio: This ratio is a part of investment ratio. This represents the relationship between
the ordinary shareholder funds and debt capital of company. In the case of VODAFONE, the
gearing ratio in 2008 long term ownership capital was 27.37% and in 2009 the figure rose to
32.04% which is not good for the organisation. The reason behind this might be that organisation
has some long-term loans and even not making the enough profit to pay the interest as well as
give the share of profit to ordinary shareholders.  (Jones, Ed 2006)

12. Cost of sales ratio: This is one of the important ratio as it helps the organisation to diagnose
the sales for the year and shows whether is investing properly in cost of sales or not. In the case of

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VODAFONE, the cost of sale ratio in 2008 was 61.70% and in 2009 it rose to 63.00% which is
not good at all for the organisation. The reason might be that VODAFONE is investing lot in
advertising and marketing which might be increasing their cost of sales so to run smoothly and
earn more profit and revenue the group should cut down their cost of sales. (Jones, Ed 2006,
Dyson, 2007)

13.  Return on equity: This measure corporate profitability by revealing how much profit a
company generates with the money which shareholders have invested. In the case of Vodafone
return on equity in 2008 was 8.83% but by the end of 2009 this decreased to 3.63%. This shows
that this is not good for the organisation. The reason might be as the borrowings have increased in
2009 comparatively to 2008 to almost more than half so company might be paying high interest
so that’s why they were not able to have good return on equity. (Dyson, 2007)

14. Sale per employee ratio: This is measured to know how much sales have been made by single
employee in a year. The sale per employee in case of Vodafone has increased in 2009 to £58185
as it was £49016 in 2008. The reason might be as Vodafone has gone global and acquired many
parts of the world, so their sales have increased comparatively to 2008 so the sale per employee
ratio is high in 2009. The other reason could be as in recession the Vodafone has kept their
margin constant to 14.27% but their competitors might have increased the margin, so they might
have got more customers which increased the sale per employee ratio.

IMPACT OF CURRENT EVENTS ON VODAFONE

Vodafone is operating and dealing in telecommunication sector from past two decades. But
however, if we have look onto the financial situation of the organisation it was not good at all in
the financial year 2009. The foremost reason behind the downfall of the financial situation might
be the span of global recession which hit the world badly and all the big multinationals as well.

As we compare the revenue for 2009 with 2008 the revenue has increased but if we have a look
on to the operating profit and profit after tax they significantly have come down almost the half
which is not good indication for the organisation. The operating profit might have gone down
because the cost of sales has increased that mean the Vodafone is spending a lot on the marketing
and advertisement from their own budget, so they need to cut down on the cost of sales. Even
though Vodafone kept their margin constant as 14.27% but still got more revenue so the other
reason for the downfall of profit might be that the group have invested the money in equipment’s
and expansion plans which will be helpful soon.

The reason behind the downfall of the profit after tax is that the company have increased the
borrowings in 2009 comparatively to 2008 so they might have to pay the higher interest in 2009.
But if we have a look on to the fixed assets which have increased in 2009 so that is good for the
organisation because if they are investing they will be going to get profit out of that soon. These
are the impact of the current events on the VODAFONE.

4.3 BALANCESHEET

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Collapse All

2017 2017 2016

Period Ending:
30/09 31/03 30/09

Total Current Assets 23530 25542 31325 -

Cash and Short-Term Investments 12226 14955 13567 -

Cash - - - -

Cash & Equivalents 5358 8835 8584 -

Short Term Investments 6868 6120 4983 -

Total Receivables, Net 6935 9401 8015 -

Accounts Receivables - Trade, Net 6843 9251 6565 -

Total Inventory 639 576 681 -

Prepaid Expenses - - - -

Other Current Assets, Total 3730 610 9062 -

Total Assets 147077 154684 156329 -

Property/Plant/Equipment, Total - Net 28813 30204 33183 -

Property/Plant/Equipment, Total –
- - - -
Gross

Accumulated Depreciation, Total - - - -

Goodwill, Net 26534 26808 26736 -

Intangibles, Net 18355 19412 25115 -

Long Term Investments 5842 6597 4949 -

Note Receivable - Long Term 4117 4569 5895 -

Other Long-Term Assets, Total 39886 41552 29126 -

Other Assets, Total - - - -

Total Current Liabilities 40771 42389 35063 -

Accounts Payable 13867 16106 14732 -

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 Payable/Accrued - - - -

Accrued Expenses - - - -

Notes Payable/Short Term Debt 3859 3648 8719 -

Current Port. of LT Debt/Capital Leases 8102 3771 7190 -

Other Current liabilities, Total 14943 18864 4422 -

Total Liabilities 79034 82484 82513 -

Total Long-Term Debt 32221 34218 39573 -

Long Term Debt 32221 34218 39573 -

Capital Lease Obligations - - - -

Total Debt 44182 41637 55482 -

Deferred Income Tax 466 535 534 -

Minority Interest 1643 1519 1719 -

Other Liabilities, Total 3933 3823 5624 -

Total Equity 68043 72200 73816 -

Redeemable Preferred Stock, Total - - - -

Preferred Stock - Non-Redeemable, Net - - - -

Common Stock, Total 4797 4796 4796 -

Additional Paid-In Capital 150136 151808 151749 -

Retained Earnings (Accumulated Deficit) -106692 -105851 -103398 -

Treasury Stock – Common -8475 -8610 -8628 -

ESOP Debt Guarantee - - - -

Unrealized Gain (Loss) - - - -

Other Equity, Total 28277 30057 29297 -

Total Liabilities & Shareholders'

147077 154684 156329 -
Equity

Total Common Shares Outstanding 26698.17 26622.08 26614.35 -

Total Preferred Shares Outstanding - - - -

Page 59 of 73
 CHAPTER 5: KEY LEARNING’S FROM THE COMPANY AND
RECOMMENDATIONS

5.1 PERFORMANCE ANALYSIS

It was only a few years ago that Vodafone was a mobile evangelist, intent on selling off its
German fixed-line business as it did not fit the bill. By the end of 2005, it was talking about the
potential of broadband and convergence, but adopted a softly-softly approach to broadband, based
around signing joint venture deals with the likes of BT to keep hold of customers who wanted to
source high-speed internet and mobile from the same provider.

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Fast-forward to today and Vodafone is a fully-fledged consolidator in the broadband sector after
splashing out £537m on Tele2's Spanish and Italian fixed-line businesses. Vodafone has picked
up nearly 650,000 broadband customers in two high-growth markets, yet it has also gained 2.4
million fixed-line voice customers.

It is a sign of the times that the only concern analysts have is the price, not exposure to fixed-line
voice. Although it has only gained a market share of 4 per cent in the two broadband markets,
Vodafone has paid a 30 per cent premium to the value of the assets under Tele2's ownership. But
the company was accused of overpaying for assets in Turkey and India over the past two years,
and it has quickly turned that sentiment on its head.

Under Arum Sarin's leadership Vodafone has become synonymous with investment in high-
growth emerging markets. Yet its strategy in mature markets to cut costs and drive growth from
new services such broadband is just as important. The Tele2 deal reflects that focus and
strengthens the company's hand in two key European markets without materially affecting its
financial performance. Despite various threats to the company's progress over the coming years,
notably price deflation and regulation, the shares look a good bet to keep progressing toward the
200p level.

Fast-forward to today and Vodafone is a fully-fledged consolidator in the broadband sector after
splashing out £537m on Tele2's Spanish and Italian fixed-line businesses. Vodafone has picked
up nearly 650,000 broadband customers in two high-growth markets, yet it has also gained 2.4
million fixed-line voice customers.

It is a sign of the times that the only concern analysts have is the price, not exposure to fixed-line
voice. Although it has only gained a market share of 4 per cent in the two broadband markets,
Vodafone has paid a 30 per cent premium to the value of the assets under Tele2's ownership. But
the company was accused of overpaying for assets in Turkey and India over the past two years,
and it has quickly turned that sentiment on its head.

Under Arum Sarin's leadership Vodafone has become synonymous with investment in high-
growth emerging markets. Yet its strategy in mature markets to cut costs and drive growth from
new services such broadband is just as important. The Tele2 deal reflects that focus and

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strengthens the company's hand in two key European markets without materially affecting its
financial performance. Despite various threats to the company's progress over the coming years,
notably price deflation and regulation, the shares look a good bet to keep progressing toward the
200p level.

5.2 REASONS FOR THE DIVERSIFICATION OF VODAFONE

Vodafone scheme diversifies with alternatives additions

Vodafone has made a foray into several new asset classes, including alternative beta,
alternative credit and private market investments, for greater diversification.
Pension schemes have been showing increased interest in diversifying their portfolios by adopting
more alternative asset classes in the hunt for higher yield.

As a result of an investment strategy review, the telecommunications company's pension scheme

“added more diversity to the investments in the Vodafone section”, according to a 2015-16
newsletter to members.

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This section now has a new 6.5 per cent allocation to alternative beta and a 14.1 per cent
allocation to credit. Furthermore, the scheme introduced a 4.4 per cent core private markets
allocation and a 7.3 per cent alternative credit bucket to the portfolio.

The changes follow Vodafone’s decision to transfer the assets and liabilities of the Cable &
Wireless Worldwide Retirement Plan to the Vodafone UK Group Pension Scheme in 2014,
resulting in two segregated sections, now with a combined size of around £4.9bn.

“The trustee [board] has also simplified the investment portfolio for the Cable & Wireless
Section,” states the newsletter. This involved decreasing the section’s exposure to hedge funds
and private market investments.

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 5.3 COMMENT ON ORGANIZATIONAL LEADERSHIP

Vodafone India has completely rejigged its leadership structures to take competition coming from

several directions including Reliance Jio, head-on. India's second largest mobile operator,
Vodafone has halved the number of decision-making people from four to two so as to increase the
pace of taking important calls, accelerating its got-markets strategy and optimizing resources. 

It has distributed its operations in 3 divisions- ‘direct’; ‘growth’ and ‘emerging’ mark clusters.
The company’s strongest markets - Delhi, Mumbai, Kolkata/West Bengal, Tamil Nadu/Chennai
and Gujarat – will be included in the 'direct markets' cluster. The business heads from these
markets will directly report to the company's chief operating officer, Naveen Chopra. Before the
re-organization, they were reporting to one of the four directors depending on circle geography.
The two operations directors, Suresh Kumar and Arvind Vohra, will supervise other circles
categorized as 'growth' and 'emerging' market clusters respectively. 

“The removal of a senior managerial layer between the COO and the business heads of

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Vodafone's biggest 'direct' markets was aimed at greater agility in decision-making and decision
translation,” a senior company executive told ET. 

“The Indian unit of UK's Vodafone Plc has taken a strategic decision to have these large markets
report into the COO to enhance organizational agility and speed-to-market, which reflect the
company's core values of speed and simplicity," a Vodafone India spokesman told ET. “The new
structure was created to also provide greater involvement of these large markets in the central
strategy making process,” he further added. 

The re-organizing exercise however, appears to have had a few hiccups along the way, in the form
of some senior level exits like Anand Sanai, Vodafone India's business head (Kolkata & West
Bengal), and Manish Kumar, business head (Madhya Pradesh-Chhattisgarh). 

Vodafone has confirmed that Kumar is leaving but denied a comment on Sanai’s Resignation. 

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 5.4 MARKET SHARE

Vodafone covers 211.0 million shares of the market after airtel (covering) 278.6 million.

IDEA cellular and reliance jio are in the rate to beat Vodafone, other competitors in the market
are BSNL, AIRCE and reliance com.

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 5.5 SWOT ANALYSIS OF VODAFONE

Vodafone is a brand known for its deep telecom roots across multiple countries and nations.
Originally, Vodafone hails from the United Kingdom and has its headquarters in London.
Vodafone was founded in 1984 and since then, has impressed the world with its wide distribution
and its smart marketing tactics. It is the favorite telecom brand for many people.

Strengths

1. Massive market coverage – Vodafone is ranked 395th amongst the world’s top 2000
brands by Forbes. It is known for its wide distribution and network cover. It has the second
largest subscriber base in India. It is the second highest ranked telecom operator and is
behind only China Mobile. Vodafone operates in more than 25 countries across the globe.
2. Revenues generated – Vodafone generates billions of dollars of revenue every year. The
latest figure of 2016 is it has generated a revenue of a whopping 87.3 billion dollars.
Naturally, this results in boosting the rankings and expectations from Vodafone even
further. It is ranked 104 in its sales figures across the global 2000 list and number 84 in
market value.
3. Marketing – The Marketing by Vodafone is legendary. The Vodafone pug is known
across the globe to follow Vodafone users everywhere. Similarly, the Vodafone zoo zoos
was a brilliant and endearing campaign which converted many users to diehard fans of
Vodafone. Time and time again, Vodafone comes out with brilliant campaigns at the right
time.
4. Premium cost – While other telecom operators are penetrating the market, Vodafone is
differentiating its services regularly. Due to its marketing and communications, users
already think that Vodafone is a notch above the rest and they are proud to be a user of
Vodafone. As a result, Vodafone is still able to get some premium out of their customers

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 and float in margins whereas other telecom operators are struggling to maintain positive
margins.
5. Subscriber base – Vodafone has a massive subscriber base which they retain efficiently.
As of 2016, the total subscribers of Vodafone across the world was close to 350 million
people.
6. Brand recal and brand valuation – The brand valuation of Vodafone is 28 billion dollars
as of 2016. Besides the brand valuation, the brand equity and the brand recall of the brand
is very high too. It is impossible that anyone will not refer to Vodafone when talking about
the top telecom players.

Weaknesses in the SWOT analysis of Vodafone

1. Dropping subscriber base – As can be seen from the **graph below**, the subscriber base of
Vodafone is dropping in the last 4 years. This is a major problem for Vodafone looking at the
global market scenario. The brand needs to strengthen its core values and implement strategies to
acquire more customers.

2. Dropping brand valuation – One of the possible reasons for the drop-in subscriber base of
Vodafone can be the dropping brand valuation of the company. Both – subscriber base and brand
valuation of the company was very strong to begin with. But both have them have suffered in the
last 3-4 years. Brand valuation drop in the last 1 year was phenomenal.

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3. Losing market share in USA – USA is a country where Vodafone could have demanded the
premium it needs to keep itself afloat. However, it is fast losing market share in the USA
to Verizon wireless and AT&T, both of whom are performing far above Vodafone if we consider
the US market only.

4. Poor performance in Europe – Due to Brexit and other economic conditions in Europe,

Vodafone’s performance in its home market has been poor and it has not generated much revenue
from its home market. In fact, if we look at revenues, 40% of the revenue is coming from India
and not from US or UK.

Opportunities

 Rural markets – If a high percentage of subscriber base of Vodafone is in India, then

rural market penetration becomes a priority for the telecom operator. However, Vodafone
seems to be operating more only in urban markets whereas its top competitor such
as Airtel and Reliance communications have penetrated rural markets successfully. This
naturally causes a loss of future potential for Vodafone.
 Emerging markets – Not only rural markets in developing countries, other emerging
markets such as those in Africa are also a great potential place for Vodafone. These new
and emerging markets have increasing disposable income and communication becomes
important once a network is growing. Thus, there are many roles a telecom company can
play in an emerging market. Hence, besides the rural markets, Vodafone should also
concentrate on Emerging markets across the globe.
 Dependency on Cellular networks – As people rely more and more on their
smartphones, parallelly their dependency on cellular networks is rising. This is a pretty

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 good news for Vodafone because customer retention is not much of a problem. It is a need-
based segment, so the number of potential users will always be on the rise. The challenge is
to acquire the potential base of consumers.
 4G – The 4G spectrum has created disruption but at the same time has made people look
at the telecom operators once again to see which one they will side with. In India for
example, the free plans of Reliance jio have resulted in many people leaving Vodafone and
joining Jio. Nonetheless, in the long run, the 4G spectrum can result in higher revenues for
the telecom operator.
 Improving the network coverage – A major problem which consumers of Vodafone
sometimes have from the brand is its network coverage. Vodafone is known to have poor
network coverage many a times. This is possible because of the number of towers the
company owns or operates out of. Keeping an eye on the network coverage and improving
it as much as possible is a good opportunity for Vodafone to increase customer acquisition
as well as retain current customers of the organization.

Threats

1. Competition – A major threat for Vodafone is the competition it faces everywhere it goes.
So if it goes to the US, it will face competition from Verizon Wireless and AT&T. China
has its own China mobile. India has Airtel and Reliance Jio. There is cut throat competition
in the telecom sector and this is strongly affecting the brand Vodafone, which was trying to
offer differentiated services by keeping a bit of premium pricing.
2. Low margins – Vodafone’s differentiation initially worked, but in the last 3-4 years, the
competition has been so fierce, that the whole telecom market is operating in a
penetrative pricing mechanism. Competition is always good for consumers but too much
competition is bad for companies. As a result, the margins earned against the revenues
generated has been steadily dropping for all telecom brands (vodafone included) in the last
3-4 years.
3. Mobile number portability – MNP is a major threat to Vodafone because whenever a
competitor introduces a cheap plan or someone like Reliance Jio gives phone calls and
internet for free, then consumers don’t think twice before switching brands. MNP has made
it easier for consumers to switch between multiple telecom operators. As a result, this is a
major threat to Vodafone which is losing its brand equity already.
4. Saturation – Saturation of the market in terms of the noise created by the telecom
operators as well as the number of competitors present ultimately results in a waste of
revenue spent on customer acquisition campaigns or strategies. Saturation results in the
brand spending more and more on customer acquisition and getting lesser customers for the
same amount spent.

Chapter:6 Findings

 Most of retailer unaware about Vodafone data card.

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  Retailer and customer all are need for an unlocked data card.
 Some retailer interested in this data card because its price is less.
 On the other hand, some retailer preferring speed data card to sale for this cause they sale
to prefer other data card expect Vodafone.
 There is a greater demand in market for latest technology which is the drawback of
Vodafone data card.
 People perception about Vodafone data card’s poor service facility.
 Less of advertisement in educational field like school ,college,university,medicine,science
and technology etc where the use of data card i.s internet is highly essential for every
phase

CHAPTER 7: CONCLUSION
As we know the Vodafone is one of the largest telecommunication industries in the world. We
have already analyzed in this report the financial situation of Vodafone in 2008 and 2009 and
according to the analysis it proved that the year 2009 was not good for the organisation in terms
of profit as we compare this with the previous years. The reason behind this could be the world

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economic recession and other factor might be that the company might have borrowed lots of
funds from the bank and other agencies so need to pay higher interest as compared to 2008 so
that’s why the profit of the organisation has decreased to almost half.

As we know Vodafone has spread throughout the world so in 2010 company would going to
achieve lot of revenue and profit as they have invested through their borrowings in 2009. As the
organisation has already paid and invested a lot for the globalization and marketing so they will
be able to generate more sales and profit by the end of financial year 2010. The main revenue
which Vodafone will be targeting is from the Asian and Middle East countries. Vodafone will
also be planning to adopt some new strategies in 2010 to attract the more customers. As the
organisation has captured some new shares in India so as it is a big market, so they need to work
out on their current strategies to acquire more customers in this sector of the world as they do
have many rivals.

So finally, the revenue for Vodafone will improve in 2010 by the growth of mobile data and fixed
broadband. Cost reduction targets will be delivered ahead of schedule enabling commercial
reinvestment to improve market share which will further strengthen technology platforms.
Vodafone, which is positioned to return to revenue growth during the 2010 financial year, as
economic recovery should benefit our key markets. On the other hand, the Vodafone group may
be going to be profitable soon. Their acquisitions and goodwill will still reap the benefits
probably in the future and so the ability to be profitable has increased and the main reason is the
total group increase of operations. So according to the reasons mentioned above the group will be
adopting the different strategies and planning and even the world economic conditions are getting
better so the year 2010 will be asset for the Vodafone.

SUGGESTIONS
After the complete analysis of entire study, the company put forward a set of recommendations
which are as follows:

1. PRICING
Depending on the market conditions\ competition from cellular or well-mobile service
providers and also to suit local conditions, there should be flexible pricing mechanism
(either at central or local).

2. IMPROVEMENT IN TECHNOLOGY
Vodafone should immediately shift to third generation switches by replacing its c-dot
switches. This will improve the quality of service to desired level and provide
simultaneous integration with the nationwide network. the special distribution of the
transmission towers should be increased to avoid “no signal pockets”

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3. ESTABLISHMENT OF DISTRIBUTION CHANNELS
Vodafone should establish widespread and conspicuous distribution to match that of the
competitors. The distribution network shall make the product visible and available at
convenient locations.

BIBLIOGRAPHY

 Websites
1. www.scribd.com
2. www.vodafone.com
3. www.slideshare.com

 Wikipedia
 And Special thanks to my teacher
Shakti Sharma

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