SWOT means strengths, weaknesses, opportunities, and threats. Strengths and weaknesses have internal nature, while opportunities and threats have external nature (Pickton 2010, p. 72). It is a technique of analysis was designed in 1960 by Albert S Humphrey and to clarify the strengths, weaknesses, opportunities, and threats which an entity is exposed to. It can be applicable to two major contexts which are business and personal ones. In business, the technique is used to evaluate the competitive aspects of a business so as to help maintain and expand it (Fight 2004, p. 75). In the personal context, it involves self evaluation that helps one develop their skill and build on their life. It is, therefore, a useful strategy for all businesses, for it helps them identify areas that need improvement and eliminate the threats they face. Vodafone being a well known company worldwide also needs to conduct a SWOT analysis to be able to plan well for the future of the company. A SWOT analysis for this company is very essential for its management and also for the people concerned with information about it.
Vodafone is a big cellular phones operator and leading in the world. The company has over 165 million mobile subscribers, which results in high annual sales of about 31.5 billion pounds. It is based in the United Kingdom but has various other sub divisions in different areas around the world. After its launch in 1985, Vodafone has continually made good profits from its market and has steadily risen to be a very successful corporation. However, it still faces many challenges from other competitor corporations that are on the rise, since the cellular market has become very wide due to advances in technology. It is because of this that regular evaluation of the business status for Vodafone is essential with focus both on the positives and the negatives for better management and decision making.
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Vodafone SWOT Analysis
Vodafone has several strengths that help it maintain its leading position in the cellular phones sector. One of its strengths is the diverse locations in major areas around the world. These areas, for example, are in Europe, Asia, Africa, Middle East, and in the United States. Through the wide market, the profits gained will be high keeping the company on its feet. Another stronghold of the company is the improved network which provides and ensures good service for its subscribers. If the consumers are satisfied with the service provided, then the profits will remain high. The availability of reliable network is as a result of improvements in technology. The potential market for Vodafone is also large. It has gained big popularity since its establishment, and it is, therefore, a first choice for many subscribers. For example, Vodafone has gained popularity in new markets like India where it is leading. This has helped to increase its profits and subscription numbers. Vodafone has a strong network connection in major urban centers where most of its subscribers reside. This, therefore, is an advantage to the subscribers and also to the company, which gets the profits from these customers.
Despite the above strengths, Vodafone has got some weaknesses which, if not addressed, may cause the downfall of the business. The purpose of exploring the weaknesses of a business is so as to improve them by the Vodafone management team. The market base in the United States for Vodafone is not strong like in the other parts of the world. This is a shortcoming, since the US has a large number of mobile services users who use other networks posing high competition for Vodafone. Marketing of its services in the United States would be very usrful due to high subscriber numbers and good network connection. The network connection in the interior sectors has not been fully developed for Vodafone. It is because of this that the market from the rural areas has not been fully utilized to increase profits and subscription numbers.
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In a SWOT analysis, there is an identification of available opportunities which, if well utilized, could help in bringing good returns for a business. Vodafone also has good opportunities that would help in increasing the company’s profits and subscription numbers. Since the company is popular all round the world, it could identify areas where there is no market for the mobile phone networks. This will help in starting new markets for their products, thus increasing their subscriber numbers. Another opportunity is bringing of new mobile technologies which have become very common among people. For example, they could suggest new improvements in their range of smart phones. This would help a lot, since many people are opting for such phones. Vodafone could also collaborate with the popular companies that offer services in the United States to improve their market base there. This would be a wise step in the expansion of their market structure in an area with good connectivity and a wide potential subscriber number which will increase their popularity.
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Though Vodafone is one of the leading mobile phone operators in the world, it also faces challenges that pose a great threat on its profitability and market structure. One of the major challenges that the company faces is high competition from other companies offering the same service. There are many emerging competitor firms that offer the mobile phone services at lower rates than Vodafone’s. This is a great risk for Vodafone, since its subscribers could opt for changing their network for the cheaper one. Another threat is that it is very hard to expand its market base, for instance, entering into some markets, especially in foreign countries. This is due to the high charges that are involved in penetration into those markets, especially in the European countries. The company also faces challenges due the set regulation that does not favor its operations. The European Union has some regulations that limit mobile phone usage across borders making it unreliable for subscribers to use the Vodafone services when they move from one region to another, especially in the European countries. The popularity of Vodafone where it has little recognition is threatened by other markets whose base in that area is strong. For example, in the United States, Vodafone has few subscribers and remains behind the market with no recognition making it hard for it to improve its market in this area.
It is clear that through a SWOT analysis, which is a powerful tool of management, a company is able to gauge its position in the market (Amason 2011, p. 58). After learning its weaknesses it will be able to take the necessary measures to improve and turn the weaknesses into strengths. After this analysis, Vodafone should put in place measures to add to their strengths, for example, meeting consumer needs and also dealing with weaknesses so as to eliminate them. The other key issue is suggesting necessary measures for dealing with the threats posed in the market. By focusing on these issues, the company will be able to build on its services, efficiency, and profitability.