Our Vodafone PESTLE Analysis examines the Political, Economic, Social, Technological, Legal and Environmental factors that influence the company.
No matter where you live in the world, chances are that you have at some time in your life come across a Vodafone commercial on your T.V set. It does not come as a surprise because Vodafone has done remarkably well for them. A multinational telecommunication company hailing from Newbury, Berkshire, England, Vodafone currently operates in 22 countries around the world and has partners in 48 others.
It is majorly active in Asia, Oceania, Africa, and Europe. Vodafone’s existence began in 1981 when Rascal Electronics, a company specializing in military radio technology formed a joint venture by the name of Racal with Millicom. This joint venture, later on, became Vodafone. As of 2020, they have 93,000 employees working worldwide.
Interestingly, the name Vodafone is derived from the words ``Voice Data Fone”. Nick Read is the current CEO of the company and he took over in 2008. The Vodafone that we know today began on 16th September 1991 when the Telecom group and electronics group separated. We know that the brand has a good history behind it, which is why it is still relevant but is that all? In the following Vodafone PESTLE Analysis, we will see the actual standing the company has in business terms.
Political Factors
Some companies like to steer clear of politics but not Vodafone. They are actively engaged with governments around the world for their business activities. They engage in dialogues with important groups to make sure that taxation policies are fair.
In 2018 they sat with The European Roundtable of Industrialists (ERT), which they are also an active member of, to discuss policies on taxation and finance. They are also a part of similar groups in other countries; in India, they are members of the Cellular Operators Association.
In Italy, they take part in taxation policies via the Assotelecomunicazoni and the Confindustria Digitale. They are also involved in such schemes in Germany, South Africa, and more.
This tells us that Vodafone has enough influence in the world to be able to literally affect political policies like this. There aren’t many companies bold enough like this one to take such initiatives.
The company is not doing too great in India though because Mukesh Ambani’s rival telecom company Reliance has posed a big threat. Vodafone Idea is a merger that exists with Bharti Airtel but it is dwindling and in a huge amount of debt.
The Indian government is very serious about trying to save this venture and many analysts predict that the government might buy stakes in it as a remedy.
India is a very big market for Vodafone so this threat can become a huge blow for the entire company if they do not focus on sorting this mess out.
Economic Factors
Being a multinational corporation, it is a fact that such companies have stakes in global economies. Vodafone has employees around the world, they take part in taxation policies and they invest in many countries.
They have contributed €12.4billion either directly or even indirectly to governments around the globe alone in 2020.
The Indian Vodafone Idea group has faced significant losses from the first quarter of 2020 to the first quarter of this year; they have dropped in their revenue approximately by 14% from Rs. 10,659.3 crore to Rs. 9,152.3 crore during the year.
The Covid-19 pandemic was hard for every business around the world but Vodafone did not suffer much because it is a Telecom; people have increased their dependence on mobile networks during the pandemic as a source of being connected to their loved ones around the world.
Despite it all, Vodafone has had impacts on their revenues because, on one hand, people have stopped traveling as frequently as they did before.
This change in traveling has affected Telecoms because people do not need to use phones as often to stay connected with their workplaces and families.
As a result during 2020, their economic condition has remained somewhat flat, neither improving too much nor declining severely.
Sociocultural Factors
A commendable thing about this company is its dedication towards society at large. Their efforts of curbing discrimination and educating people are explained here in detail.
Vodafone was prompt to realize its role in helping people, businesses, and society to stay afloat ever since the pandemic hit the world.
For this, they developed a plan in which their priority was to have no issues with their connectivity because cellular networks are the primary source of communication in today’s world.
They also teamed up with many hospitals to provide them with fast connections and technology to enable them to have remote consultations with patients to avoid unnecessary interaction and travel.
They also are working on providing home-based businesses some tips and pointers on how to best make use of whatever resources they have available.
Vodafone has a very inclusive culture where they are strictly against discrimination of any sort. People belonging to all genders, sexualities, races, and age are associated with the company in every role.
They also plan on making a digital society where every user will feel safe and protected in terms of their information.
In 2021, shortly after the death anniversary of George Floyd, Vodafone UK was quick to become even more sensitive to Black people and other ethnic minorities working for the company.
They launched many programs which included many insightful conversations with the affected community so that their voices are heard and represented.
Vodafone is responsible for their advertising so much so that they now have a policy to withdraw their association with any media outlet or group which advertises them if the advertising entity is prone towards hate speech of any form or false narratives.
They have even backed out of advertising on Facebook at one time when the Christchurch mosque mass shootings took place.
Technological Factors
Telecoms usually are very ahead in the use of various forms of technology because their entire business is based on it.
Vodafone has very impressive technological feats under its belt. They have used technology to make a single digital core to connect the global HR systems for the company.
They have also successfully implemented the use of SAP S/4HANA to further improve their operations across all of their business units including finance, IT, and supply chain.
Vodafone is also working on rolling out its new 5G technology across the world. They have selected Samsung to be their initial rollout partner. Initially, Samsung will be deploying this technology in rural areas of the South West of England and Wales at 2500 different sites.
The brand has also launched a start-up by the name of Vodafone Smart Tech which has been making use of IoT (Internet of Things).
They have successfully launched two products for GPS tracking which have been a hit with the customers; the Curve smart GPS tracker and Curve Bike light & GPS tracker.
Vodafone also claims to be the global 5G leader because of its extensive reach thereby making it possible for them to roll out 5G to many areas easily in the future. This is most definitely one of the most amazing things Vodafone has going on for them at the moment.
Legal factors
India just does not seem to be doing well with Vodafone in many aspects. In 2020, the Indian government lost a case they made against the corporate giant for being paid Rs 22,100 crores in taxes.
They had some sort of a legislative basis of making the claim but it went against the pact of bilateral investment protection the government has with the Netherlands.
Vodafone Idea in India is also facing trouble with the courts over their adjusted gross revenue dues. The company believes that the stated AGR dues have been miscalculated and are considerably lower than what they appear to be.
They took the matter to the courts but unfortunately they were denied any amendments in the stated amounts. This ruling has hurt the stock price of the company in India by a decline of about 7.5%.
Environmental Factors
The world has a very careful eye on global businesses to see how serious their efforts are in maintaining their corporate social responsibility. Vodafone has been working endlessly to reduce its impact on the environment.
They have set a goal of using only 100% renewable electricity in Europe which they wish to achieve by 2025.
Their target of becoming net-zero by 2040 has been scientifically approved and is in light of the Paris Agreement of fighting climate change. By 2030, they plan on reducing emissions from their operations to a net-zero to keep the warming to a maximum of 1.5°C.
By 2040, the company plans to make its entire global footprint in terms of carbon emissions become zero. They originally had a plan of making this achievement possible by 2050 instead, but now they have further constricted their target goal by a whopping decade.
This is truly amazing, to be able to achieve that. The confidence that Vodafone has in its abilities is awe-inspiring.
They also want to work with their customers to promote safer practices for lesser greenhouse emissions. Currently, they are building technologies and services which will enable their customers to produce less harmful emissions.
By 2030, the company will make it possible for all of their business customers to successfully reduce their carbon emissions by an approximate total of 350 million tonnes globally.
Vodafone is one of the corporate giants that are seriously dedicated to reducing their carbon footprint all over the world. Their efforts are truly effective.
Vodafone PESTLE Analysis: Final Thoughts
If you have stuck with this article to the very end then pat yourselves on your back. Not only do you see a PESTLE analysis being performed, but you also understand the company much more deeply.
Vodafone has been around for many decades now if we consider the start from the ’80s. The brand surely has some amazing victories under their umbrella which surely outweigh their weaknesses.
Despite the sore spots for the company being considerably low, they do have serious issues, especially in India. Problems of all types and magnitudes are occurring for Vodafone in India which if not checked promptly will damage the company at large.
They have some brilliant initiatives, the most impressive being their technological advancement in the shape of their 5G rollout plan and their ecological preservation efforts for a safer and healthier climate.
All in all, they do have some problems that need full attention from them but their continuous achievements are impossible to ignore. Vodafone is here to stay for the foreseeable future at least.
A PESTLE analysis is a very useful tool to both understand as well as implement. It basically identifies the key macroeconomic factors which have a considerable influence on the well-being of businesses, organizations, and even countries depending upon the scope of one’s investigations.
We cannot emphasize enough the importance of knowing how a PESTLE analysis works. It does not matter if you aren’t a business student or a business person by profession, you still should be able to understand the various businesses around the world for potential investment opportunities or even for the sake of having knowledge.
If you are just getting started, it is recommended to give some type of a PESTLE analysis template a try; it will make it super easy to work on an analysis without spending too much of your time.
However, if you believe that you already have what it takes to work on a PESTLE analysis by yourself, we encourage you to go for it! A PESTLE framework is also very useful for presenting and arranging your research in a precise manner.
