Competitive Advantage Of Vodafone Over Other Telecom Players Marketing Essay

Competitive Advantage Of Vodafone Over Other Telecom Players Marketing EssaypresentationA Company is said to have a competitive emolument if it can sustain a profit that exceeds the average of the industry .According to Michael Porter there are two basic types of competitive advantage-Cost Advantage-when a company is able to deliver the same benefits as provided by their competitors at a lower court.Differentiation Advantage-when a company delivers benefits that exceeds the benefits provided by their competitors.There are 4 generic business strategies in order to come along competitive advantage over others. The four strategies are described in the figure shown below.Differentiation CostCOSTLEADERDIFFERENTIATIONLEADERleader considerableDIFFERENTIATIONFOCUSERCOSTFOCUSERNarrowStrategy DifferentiationIn this strategy one or to a greater extent criteria used for selection by buyers in a grocery are chosen and then a business plan is used to uniquely meet those criteria. Mostly c ompanies come up with plan that associates with charging a premium price for the product that often reflect the gameyer production costs and extra value-added features provided to the consumer. Differentiation is about charging a premium price that more than covers the additional production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products.(David Jobber)Vodafone came up with differentiation strategy when they launched I promise service, even though they were charging their customer more than their competitors but they still got the edge over others by offering free Vodafone to Vodafone calls for life time calls and better meshwork strength compared to other competitors.Strategy Cost LeadershipIn this strategy companys main objective is to be lowest cost producer in the industry. If the achieved sell price can be at least equal (or near)the average for the market, then the lowest-cost producer will (in theory) enjoy th e best profits. This strategy is usually associated with large businesses offering standard products with relatively little differentiation that are perfectly acceptable to the majority of customers. Occasionally, a low-cost leader will also subtraction its product to maximize sales, particularly if it has a significant cost advantage over the competition and, in doing so, it can further increase its market share.Vodafone has started nucleotide Cell tariff for its Metro Digital service. In this offer off-peak calls from a specified location (such as office) for 5 pence (8 cents) a minute were provided. By presentation this they have clearly scored a cost advantage over others like O2,3,orange.Strategy Differentiation FocusIn this strategy company aims to differentiate inwardly just one or a small number of target market segments. The special customer postulate of the segment mean that there are opportunities to provide products that are clearly different from competitors who may be targeting a broader group of customers. The important issue for any company adopting this strategy is to understand that what customers unfeignedly needs and wants in other words that there is a valid basis for differentiation and that existing competitor products are not meeting those needs and wants.Vodafone introduced One Net, a hosted fixed and mobile voice service for SMEs . this move is regarded as to be very effective move for Vodafone as Vodafones model is to head per user, per month and claims the total One Net solution can be 15%-20% cheaper than SMEs pay for typical services currently.Strategy Cost FocusIn this strategy a company seeks a lower-cost advantage in just one or a small number of market segments. The product will be basic perhaps a similar product to the higher-priced and featured market leader, but acceptable to sufficient consumers.Out of these 4 strategies differentiation and cost leadership strategies operates in broad range of market to get a competitive advantage over other competitors .By contrast, differentiation nidus and cost focus strategies are adopted in narrow market to gain edge over others.Why do so many people choose Vodafone? start-off of all Vodafone operates in all 3 segments of market i.e they have targeted low level ,middle level and high level market which not only let it open to large market but also gives a competitive advantage over the other major telecom players .Secondly they have regurgitate in large investments on strengthening their network so that their customers can make more calls more places and there on they can have an advantage over others by winning costumers confidence over quality and reliability of their services .Thirdly they have reduced their effective cost by almost 5 times in last the 3 eld so that they can provide better value for money to their customers which in turn gives them a edge over other telecom giants.And of lately they have kept a focused on customers services in order to maintain high standards of customer satisfaction.In addition to above points Vodafone understands the change in market requirements with time and have always tried to come up with refreshful sophisticated idea to attract more and more costumers for example-of lately they have understood the need to penetrate in business organizations for which they have started 3 new-fashioned plans which are as follows-For small business- This plan concentrates at those costumers which are sole traders or those who are running a family firm or those who are working(a) in a growing enterprise because it offers business phone and accessories at great value price for calls ,e mail and mobile broadband.For medium coat and large sized business- This plan concentrates at organization more than 100 to 1000 employees .This aims at providing low call cost and flexible working with in a integrated network. This plan also aims at transforming the business communication with solutions that make s communication more agile and more productive than ever before.For humans Sector-Vodafone has been working with public sector for more than last 20 years as they are approved supplier in OGC(Office of Government Commerce) variant work. Vodafone has transformed the public service delivery by providing more flexibly and efficient working solutions.Besides targeting the business sector they have also started new services on which none of their competitor has focus on yet, like disability services .They were quick enough to notice the increasing complexity in technology and introduced new phone which are easy to use which in turn has opened a all new market for them ,for those who like their things to be simple or are disabled this offer by Vodafone is very lucrative.VODAFONE MARKET SHAREvNUMBER OF CONNECTIONS200520062006200720082009TotalUnited Kingdom67,680,00067,437,52568,066,30070,626,52774,375,79776,067,6053 (Hutchison)GBRHU3,358,0003,473,9253,386,0003,633,5273,883,5974,410,105O2 (Telefonica)GBRCN15,981,00016,340,60016,814,30017,751,00019,075,20020,416,500OrangeGBROR14,858,00014,958,00014,951,00015,097,00015,756,00015,850,000T-MobileGBRME17,158,00016,361,00016,730,00016,734,00017,124,00016,675,000VodafoneGBRVF16,325,00016,304,00016,185,00017,411,00018,537,00018,716,000ContractUnited Kingdom22,100,36022,113,12022,546,15224,096,23726,883,50230,578,8283 (Hutchison)GBRHU1,880,4801,945,3981,953,4622,164,7142,435,0022,993,888O2 (Telefonica)GBRCN5,502,0005,686,2005,873,8006,298,0007,015,0008,698,500OrangeGBROR4,977,4304,891,2664,731,0004,970,0005,722,0006,298,000T-MobileGBRME3,439,0003,248,0003,611,0003,821,0003,861,0004,109,000 arrant(a) Mobile (Virgin Media)435,700712,300VodafoneGBRVF6,301,4506,342,2566,376,8906,842,5237,414,8007,767,140PrepaidUnited Kingdom45,579,64045,324,40545,520,14846,530,29151,243,29551,306,7773 (Hutchison)GBRHU1,477,5201,528,5271,432,5381,468,8141,448,5951,416,217O2 (Telefonica)GBRCN10,479,00010,654,40010,940,50011,453,00011,388,00011,718 ,000OrangeGBROR9,880,57010,066,73410,220,00010,127,00010,034,0009,552,000Tesco Mobile1,800,000T-MobileGBRME13,719,00013,113,00013,119,00012,913,00013,263,00012,566,000Virgin Mobile (Virgin Media)3,987,5003,305,700VodafoneGBRVF10,023,5509,961,7449,808,11010,568,47711,122,20010,948,860Vodafone has second largest market share in UK telecom market .As per the details shown in the table above total number of connection provided by Vodafone(19,114,000) are second largest, next to O2 (21,299,300).Vodafone is planning to buy T-mobile which would give them sole market share of around 40% after which they will be the market leaders by far leaving O2 behind(financial times).Table shown below compares all the network provider on basis of number of connections provided in last 5 years of time spam .From which we can easily interpret that Vodafone in UK is second largest network at the moment and as per their plan if the T-mobile take over by Vodafone takes place they are going to the largest net work in UK market leaving other telecom players far behind them.