1. Executive Summary
In Qatar, Vodafone is considered to be the second telecom supplier, with services offered encompassing the internet and mobile telecommunication. The formation of the company included a conglomerate of two international large corporations. The integrated companies were the Vodafone multinational and the Qatar Foundation (Vodafone Qatar, 2015). Unequivocally, this strategic plan provides an overview of the Vodafone Qatar Company. The paper will provide detailed information on the business of the organization analyzing the key factors of success and failure. Various methods are used in the plan to examine the internal and external factors affecting the firm. In addition, SWOT analysis has been used to highlight the key internal factors of the organization. The study sheds light on the strengths such as the various factors that the organization adopted to have a competitive advantage. The weaknesses entail the elements that the firm can improve on as they give the competitors an advantage. The opportunities incorporate elements that the corporation can use to improve its future dealings and expand its markets. The threats are the dynamics that may cause the business not to progress in a positive manner in the future.
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The external analysis of the firm will uncover the matters that influence the industry in the political perspective, economic perception, social viewpoints, and technological issues, as well as legal and environmental elements. Financial analysis is vital in the determination of the future progress of a company. Given the above, ratio analysis of the establishment undertakings will portray the financial position of the company and the liquidity; profitability ratio will be computed to evaluate the organization. Review of the incomes of the business over years will be assessed to provide more insight into the financial position of the organization. The plan to be adopted by the company will be taken into account as the future strategic adoption is reviewed.
2. Introduction
The opening of Vodafone Qatar was in June 2008, with the integration of Vodafone group, which has a shareholding of around 51% and the 49% shareholding Qatar Foundation. Seven years down the line, and the organization is ranked second, with continuous growth prospects (Vodafone Qatar, 2015). The establishment offers cellular services in mobile telecommunication and is involved in selling items associated with mobiles such as equipment and accoutrements. Qatar is a large market for the firm, and it has numerous distribution channels, the number of which makes approximately 2200. In addition, the company has several retail supplies shops amounting to eleven. The headquarters of the Vodafone Qatar are in Doha, Qatar (Vodafone Qatar, 2015).
Since 2011, the primary goal of the corporation was to escalate the network and provide new services as well as products to the Qatar market. Heavy competition is experienced in Qatar Telecommunication, and hence, the company continues to unveil new products such as payment for USB bundles in advance, internet supply, and services concerning fixed line supplies to the citizens (IBP, Inc., 2013). Since it commenced its operations, The Qatar Vodafone has had a market share of the telecommunication industry. Ooredoo, the leaders of supplies in the area, had enjoyed a substantive monopoly in Qatar, which also made them the leaders in telecommunication in the area. However, Vodafone Qatar has claimed second in the market and, with time, may position itself as the leader if it adopts a strategic plan to counter the competitors and increase the market share.
The company enjoys a 22% share of the market at the expense of the competitors; it is continuously dominating the market (Vodafone Qatar, 2015). Evidently, the customer base of the company has progressively upsurged affecting negatively the competitors. If with time the company adopts proper strategies, it may overtake the leaders whom the residents do not prefer. Ooredoo, the market leader, has had a decline in clients due to the fact that many of its customers option for services and products offered by Vodafone Qatar (IBP, Inc., 2013). Undeniably, Vodafone will prove with time to be a great player in the Qatar market, and adoption of the strategic plan will have a great impact on the future undertakings of the company.
3. Analysis
3.1. External Environment Analysis
3.1.1. Vodafone Qatar PESTLE Analysis
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Environmental factor |
Comments |
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Political |
Qatar had a monopoly in the telecommunication industry, and this led to the limitation of the entrance to the market by other players. Indeed, Ooredoo was the only firm that provided telecom services in the country (Oxford Business Group, 2012). However, since 2008, the government liberalized the market leading to other companies in the sector entering the market. The liberalization has enhanced growth in the sector, and many businesses can now enjoy a share of the telecommunication sector in Qatar. Ooredoo with time has built its market share as it did not face any competition; this is a disadvantage to Vodafone Qatar and other companies. However, in the provision of liberalization in the sector, the government locked out small entrepreneurs in the industry hence enabling competition to be undertaken by the large corporations only (Business Monitor International, 2015). Qatar government has relevant credit policies, which provides a platform for the organization to borrow costs to expand their business (Curwen & Whalley, 2013). Vodafone Qatar is continuous to take advantage of the policies put forth by the government in quest of market expansion. In many cases, laws and regulation affect foreign investments of international organizations. However, in Qatar, foreign investments are only restricted to 49 % in the shareholding of foreign companies giving the local businesses a stake in foreign international companies. In fact, Vodafone surpassed this with the IPO and ownership by local Qatar Foundation (Jeffreys, 2014). |
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Economic |
Qatar is one of the developing economies that continue to expand their operations within the countries. The country has a liberalized economy controlled by the forces of demand and supply, which gives a competition platform for organizations. The nation has a combined international stable economy, with revenues from natural resources placing it as the third emergent economy. Qatar faced a financial crisis, but this did not cause any decline in the development of the economy. A tight financial administration has enhanced the commercial development of Qatar. The emergent in the economy has provided a platform for the telecommunication industry to increase its market share (Business Monitor International, 2015). A stable economy for Qatar has produced low inflation and interest rate, and Vodafone Qatar can borrow money for expansion purpose, without a worry in increased interest and payment. The stability in inflation has led to the telecommunication companies having stable prices thus resulting to clients’ confidence in their products and accessories. The demand for telecommunication services and the product is elevated due to the growing populace in anticipation of future activities. The country will host the world cup in 2022, and this has led to many international companies moving to Qatar (Business Monitor International, 2015). The need for telecommunication products is high among individuals and organizations, and this will increase the market share of telecom in Qatar. |
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Socio-cultural |
Women in Qatar do not have concerns in terms of roles as they still believe in old traditions. The Islamic customs and the countries’ laws have a restriction on women in regard to working. Undeniably, this poses a disadvantage to Vodafone Qatar in its quest to promote gender role in the company. Going against the beliefs of residents may have an adverse effect on the enterprise; therefore, this might lead to adopting the culture of the residents (IBP, Inc., 2013). There is open discrimination of employees who are non-Muslims (Curwen & Whalley, 2013). Without a doubt, the company has equality in its employment criteria, and discrimination is avoided in many instances. However, nonresidents are discriminated concerning education opportunities, and this leads to the fact that the organization can return to the society by having scholarship where women and residents living in Qatar can have more opportunities. |
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Technological |
The growth of telecommunication industry requires continuous innovation. Vodafone Qatar has adopted various approaches in the provision of technology to the market. The company has adopted a 3G network with the time, which serves the populace. The open broadband internet has seen the company providing households with good internet packages (IBP, Inc., 2013). Vodafone had the opportunity to offer WIMAX services to the nation, and this provided a technological opportunity for the organization. The government accorded the company with the license, and the firm has policies to use WiMAX in association with fiber founded to provide integrated services of telecom in the country. With no doubt, Qatar embraces technology and borrows some of the successful innovations adopted by Qatar group, such as money transfer (Business Monitor International, 2015). |
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Legal |
All the projects approved by the Qatar government are presumed to fit in the growth agenda of the nation. Undeniably, the licensing of Vodafone Qatar is an indication that the government has faith in the company to deliver products that are beneficial to the population. Payment of taxes is comfortable in the country as it is ranked second in the simplicity of revenue payments. A tax of 10% was introduced for organizations, which are foreign or with the foreign partnership (Jeffreys, 2014). Qatar is bound to the New York Convention and a member of ICSDI; the nation is obligated to solve any dispute that arises from investment through international arbitration (Curwen & Whalley, 2013). In fact, this is an advantage to Vodafone as any disagreement on the investment can be solved without any biases. The nation also has severe laws on the intellectual property providing a platform that enables the organization to safeguard the innovations and products. |
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Environmental |
The company can adopt corporate social responsibility by conservation of the environment. The environment is a critical issue in Qatar as many businesses involved in gas and oil cause harm to the environment. Certainly, adopting a conservative measure can help Vodafone increase the firm’s image and hence enhance the organization’s client base (Oxford Business Group, 2012). |
3.1.2. Industry Environment – Porter’s Five Forces
Industry Rivalry
The industry is highly competitive due to the liberalization. The telecommunication industry has the potential for huge revenues as each company tries to increase the market share. With time, Vodafone Qatar accomplished a 2G coverage in the entire country and the 3G network is spread at 98% within the whole country (IBP, Inc., 2013). Indeed, these measures were adopted to curb company’s competitors. Vodafone was the first provider of telecom retail outlet in the Pearl Qatar. Conversely, their rivals Ooredoo overtook the firm by securing a deal to administer TPQ, and this was an added advantage to the competitor. However, this was a setback to Vodafone quest to sell broadband in Qatar. Clearly, the rivalry of the provision of services is high in Qatar.
The Bargaining Power of Customers/Buyers
The Qatari has diverse products to choose from as well as various companies to choose services from. Indisputably, the Qatari has the necessary information about the market to be able to consider substitutes and make decisions on the right products and enterprises. The buyers cannot affect the prices of the products as the forces of demand and supply do not apply. Due to the buyers, companies differentiate their products and enhance the services provided to attract more customers (Business Monitor International, 2015).
The Bargaining Power of Suppliers
Being the second in the industry, Vodafone Qatar is portrayed as one of the price setters. Undeniably, the telecommunication industry in Qatar has independent providers. Vodafone Qatar has positioned itself as a cost leader, and this makes it operate in a margin higher than its rivals do. There is no doubt that being one of the leaders, the company engrosses the price elevated by the suppliers more easily than its opponents. By continuous working toward dominance in the telecom industry in Qatar, Vodafone can minimize the expenditures from the providers and make revenues when the rivalries are making average profits. Some of the principal suppliers that have an effect on Vodafone are organizations such as Nokia and Samsung Nortel Network (Oxford Business Group, 2012). Indeed, this firm provides mobile hardware, and without a doubt, the performance of Vodafone has effects on these organizations.
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Threat of New Entrants
Small telecommunication companies face difficulties in venturing into the Qatar market as the law prohibits small investments. Companies setting up business in Qatar are required to have a plan that is aligned with the development agenda of the country. Qatar government provides license for businesses, and this may restrict companies from venturing into the country. Seven years after Qatar liberalized the telecommunication industry, many firms have ventured into the market. Vodafone faces competition from new entrants as new companies may be considering having a share of the anticipated world cup on 2022 (Jeffreys, 2014).
Threat of Substitutes
Vodafone Qatar faces massive substitute in various sectors. Skype is a significant risk to the organization as individuals can communicate via the internet. In scenarios where the cost of cell declines, the clients use cell line as a substitute for fixed line. Undeniably, when Vodafone incurs expenditures, it will necessitate the organization to minimize the prices to avoid clients’ substitution with other products of rivalry. The market leaders and other competitors are developing company image to entice customers from other firms to elevate the threat of substitution (Jeffreys, 2014).
3.2. Internal Analysis
3.2.1 Company Vision, Mission, Goal/Objectives
Vodafone Qatar has the objective to provide the residents of Qatar with global transformation by having an aim of being the first in telecommunication industry in Qatar within a period of fewer than three years. The firm has an objective of retaining and increasing client base from various bases incorporating the revenues from expatriates, and the residents as well as nonresidents of Qatar. In addition, the company aims to lure away the customers of the market leader Ooredoo that was previously known as Qtel to Vodafone Qatar. Vodafone Qatar correspondingly antedates to exploit the accumulative inclination of operators to uphold identical SIM cards. A significant fragment of Vodafone enduring tactic comprises the disposition of congregated communications amenities. The approach of integrated services is in line with the provision of fixed line amenities did in the year 2010 (Jeffreys, 2014).
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Vodafone Qatar has plans to have an emerging general supply model founded on direct clients sales frequencies, online sales, stores and shops along with business deals channels. The objective is to provide customers with products useable immediately after acquisition. The company will also have deep ties with the international Vodafone group in the continuous provision of innovative goods and resolutions to the Qatari market (Vodafone Qatar, 2015). The company has had advancement in prepaid subscription in the year 2014, and its target is high-end postpaid customers. Both the market leader Ooredoo and Vodafone have experienced a decreased occurrence of postpaid subscription. Evidently, Ooredoo has had only a 13.2 % in postpaid subscription while Vodafone has had a lower figure of 8.8 % indicating that there is a substantial profit development probably in migrating (Curwen & Whalley, 2013).
3.2.2 Resources – How the Company Is Achieving Competitive Advantage
Vodafone Qatar faces enormous competition from the market leaders but has continuously had a competitive edge by utilization of various tactics. The company has flexible tariffs that have lured clients who are watchful of the prices. The competitive edge of the business is seen in three of its varieties of cell numbers consistent with the enhanced subscriber base. In addition, it also delivers a high-class consecutive numbers types for the business domain clients (Jeffreys, 2014).
Vodafone Qatar also uses innovations and provision of new products and services to be ahead in the market. In fact, the company launched a money transfer technology in collaboration with the Doha Bank (Curwen & Whalley, 2013). The innovation enables the user to send and receive money via their mobile phones. The Vodafone Money Transfer allows the clients to wire money through phones from Qatar to other countries instantly. Vodafone Qatar has the best workforce as it collaborates with the Vodafone group to have a contract between managers for the proper management exchange program. Continuous innovations in the sphere of internet and mobile phones have provided the company with a competitive advantage over the opponents.
3.2.3. Financial Analysis
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Ratio |
Year |
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2009 |
2010 |
2012 |
2013 |
2014 |
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Current Ratio |
0.6 |
0.5 |
0.6 |
1 |
1.7 |
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Asset turnover |
0 |
0.1 |
0.1 |
0.2 |
0.8 |
|
Cash Ratio |
0.2 |
0.1 |
0.1 |
0.2 |
0.8 |
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Return on Equity |
0 |
0.1 |
0.1 |
0.1 |
0.1 |
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Quick Ratio |
0.6 |
0.5 |
0.6 |
0.9 |
1.6 |
3.3. SWOT Analysis
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Strengths |
Weaknesses |
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· Authorization to provide telecommunication services enabling it to offer integrated services (Business Monitor International, 2015). · Has a multinational investor in Vodafone group and hence can borrow some successful innovative ideas to implement in Qatar. · Have had stability in growth of the market share. · Second in telecommunication industry in Qatar after a few years of inception. · Implementation of products that have been tested by the Vodacom group. |
· Have ventured into a market of fixed line that places Ooredoo as the key player and opponent. · The continued development has been attributed to only selling prepaid cards. · Ooredoo had victory over Vodafone due to launch of the 4G network (Oxford Business Group, 2012). · Lack of implementation of innovations in time. |
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Opportunities |
Threats |
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· Vodafone was a winner of the fixed line license and established fixed services. · Competition between Vodafone and Ooredoo provided a platform for the organization to enhance the market share. · Provision of a new smart phone model enabled incentive for increased users of internet services. · Agreements continuation of the management with Vodacom group from current year to 2018 is an opportunity for continuance of policy creation and execution (Jeffreys, 2014). |
· Fixed line achievement may result to constrain because of enhancement in cell substitute and development of IP telephony. · Upsurge entrance into the telecommunication market may cause a decline in the development of subscribers. · Reduction of revenues in Vodafone Qatar may be experienced due to new entrant. · Lagging behind in progressive cell data may be experienced by Vodafone Qatar due to Ooredoo advantage from inauguration of 4G LTE (IBP, Inc., 2013). |
3.4. Competitive and Corporate Strategy Analysis
The organization aims to adopt an innovative strategy to overcome the competitors. Indeed, Vodafone Qatar has a broad range of technologies from mobile money transfer to innovative accessories. Additionally, the company uses the approach of change implemented by the management team. The Vodafone group provides the Vodafone Qatar with management teams that stimulate the operations of the organization (Business Monitor International, 2015). Without a doubt, this tactic brings on board experienced workers to provide expertise.
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4. Options For The Company’s Strategic Plan
The company can adopt one of the two options to drive change in the future. First, the company can take universal tariffs for the business and individuals that will enable the company to learn about standard fixed rates on services. At the same time, the company can have various tariffs for their products but be dependent on the advancement (Business Monitor International, 2015). The company may have a research department that will focus on creating the advanced products all the time.
5. Recommendation
Vodafone Qatar can adopt the second method, which is to have a research and development sector that will focus entirely on innovations. New products will be introduced for a short period, and the company will be recognized for their technologies. Experts will be employed to provide the organization with innovative ideas about the new products. In addition, customers’ surveys will be frequently conducted to assess their needs and requirements, which will promote progress in the development of products.
6. Implementation
The organization will adopt the strategy of a pilot program for six months to assess its suitability and capability. Without a doubt, this will be a criterion for improvement of the operational processes of the company to enable competitive advantage.
7. Evaluation
Customers’ surveys will be conducted to evaluate their views on the enhanced products. Questionnaires will be delivered to clients, in particular to the handset and internet users to determine their satisfaction with the company.