Brand Audit Final_6

Vodafone Brand Audit Project

Submitted By: Group 6

Jilendra Kuldeep Konrad Torrado Sujay Shetty Shishir Fawade Aishwarya Babbar Chaitali Tendolkar

Project submitted in partial fulfillment of the requirements for the course of Brand Management as part of the Post Graduate Program in Management 2009-10

Index •

Objectives of the Brand Auditing---------------------------------------------------------------------3

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Background of the Cellular Service Industry-------------------------------------------------------3

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Competitive Analysis of Cellular Services in India------------------------------------------------4

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About Vodafone------------------------------------------------------------------------------------6

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Vodafone’s strategic objectives-----------------------------------------------------------------------9

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Brand Elements of Vodafone -----------------------------------------------------------------------10

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Vodafone’s Brand Mantra----------------------------------------------------------------------------10

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Brand Value & Brand Personality of Vodafone--------------------------------------------------16

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Vodafone’s Personality Campaign--------------------------------------------------------------20

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Competitive Advantage --------------------------------------------------------------------------12

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Vodafone's marketing mix 4P’s------------------------------------------------------------------13

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STP Analysis ----------------------------------------------------------------------------------------------16

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Brand Positioning---------------------------------------------------------------------------------------18

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Brand Equity Evaluation of Vodafone------------------------------------------------------------------19

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SWOT Analysis of Vodafone-------------------------------------------------------------------------21

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PEST Analysis ---------------------------------------------------------------------------------------------22

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The VRIO Framework-------------------------------------------------------------------------------------23

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Porter Five Forces of Vodafone-----------------------------------------------------------------------26

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Promotional Strategy Evaluation ---------------------------------------------------------------------28

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Marketing strategy----------------------------------------------------------------------------------------31

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Sponsorships----------------------------------------------------------------------------------------------36

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Distribution------------------------------------------------------------------------------------------------37

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Exploratory------------------------------------------------------------------------------------------------38

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Suggestions for re-positioning Vodafone------------------------------------------------------------41

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Recommendation & Implementation-------------------------------------------------------------44

OBJECTIVES OF THE BRAND AUDITING •

To know the current market scenario of the Vodafone Cellular Services w.r.t. not only the Indian, but also for the world – wide Cellular Services.

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To know the Marketing-Mix of the Vodafone Services.

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To find out the customer response for the Vodafone Services.

BACKGROUND OF THE CELLULAR SERVICE INDUSTRY In November of 2006, India reached 100 million GSM subscribers. This places it at 3rd, behind China and Russia, in national subscribers to GSM. All told, there are 140 million cellular subscribers in India. With a total population of 1.1 billion, this means that 12.7% of the population uses cell phones. Compare this to China, with 449 million subscribers and a population of 1.3 billion, with 34.5% saturation. Both countries have cellular concentrations in their major cities, with some spotty coverage in outskirt villages. If you look at this graphic, you'll see that the major cities of Delhi, Mumbai, Kolkata, and Chennai make up about 20.7% of cellular usage.

Not only does the country have room for growth, but the government's goal is to have 500 million subscribers by 2010. GSM will provide the pathway for this growth as will expansion of companies like Texas Instruments. With that in mind, finding an entrance into the Indian cellular market can be difficult. So, many of the companies have operations in other countries and are not a pure play. Hutchison Telecom Int Ltd (HTX) is a multinational corporation based in Hong Kong, whose Indian operation, Hutchison Essar, has an impressive 25% market share in Delhi, Mumbai, Kolkata, and Chennai. They also have an impressive presence in the smaller cities and more rural areas of India. Their business in India is just a piece of the puzzle, as Hutchison Telecom has operations in a number of Asian markets. HTX isn't the solution to enter into this market, as they are looking to sell off the Hutchison Essar division, for 14 billion USD. Maxis Communications BHD [5051.KU], U.S. private-equity company Texas Pacific Group [TPG.XX], Vodafone Group PLC (VOD), India's Reliance

Communications Ltd. [532712.BY], and India's Essar Group are among those interested in buying the company. Whoever buys this division will benefit from the strong market presence, GMS capability and growth potential. A company with a small footprint in the cellular market is Mahanagar Telephone Nigam Ltd (MTE), which trades in ADRs on the NYSE. Unfortunately, they have a small market presence (2.3 million subscribers) and offer cellular service only in Delhi and Mumbai. Land-line phone services bring in the majority of their revenue. Revenue from mobile services only brought in 10% of their revenue in the last fiscal year. Between March and November, their cellular subscribers have grown 21%. The cellular market in India stands to benefit their business and if they can increase the scope of their internet services, the potential of that market will also benefit them. COMPETITIVE ANALYSIS OF CELLULAR SERVICES IN INDIA

Airtel is ranked number one in terms of building brand equity. Vodafone is ranked second in maintaining reliability, knowledge, esteem. The close competitor of Vodafone is Airtel followed by Idea, Tata, Reliance and BSNL. Brand equity can be managed by stressing on brand loyalty, creating brand responses .i.e. how customers respond to the brand marketing activity, focusing on the customers personal opinion and evaluation, by increasing brand quality .i.e. services that are been provided by Vodafone ,brand credibility .i.e. the company should have a good reputation in the minds of the customers.

Airtel is better than Vodafone in terms of Brand Recall value.

Vodafone is having highest Brand equity value in the Indian Cellular Services Industries.

Airtel This company was established in 1995 by Sunil Mittal as a Public Limited Company, Airtel is the largest telecom service provider in Indian telecom sector. With market capitalization of over Rs. 1,360 billion, Airtel has 31% of total market share of GSM service providers. Providing GSM services in all the 23 circles, Airtel was the first private player in telecom sector to connect all states of India. Also, Airtel is the first mobile service provider to introduce the lifetime prepaid services and electronic recharge systems. After establishing itself in the domestic market, Airtel is now spreading its wings in US by providing its mobile service under the name 'call home' to the NRIs. Having achieved huge success in mobile services- postpaid and prepaid- Airtel has now entered fixed-line telephony providing broadband services in 92 cities across India. The company has an optical fiber network of 35,016 km and a customer base of 35,440,406 GSM mobile and 1,819,083 broadband subscribers.

About Vodafone The company was formed in 1984 as a subsidiary of Racal Electronics. By 1991, it was a separate organization, known by its present name, and with its first controlled overseas operation in Malta.

A combination of acquisitions and partnerships with other networks has made Vodafone the world’s largest mobile telecommunications company, with equity interests in 26 countries across five continents and partnerships in another 14. Vodafone is teaching itself quickly to have a deeply ingrained customer understanding in order to make it nimble while developing the scale, scope, and power of a large multinational. The focus on customer understanding and segmentation knowledge is highly important to insure that Vodafone doesn’t get sluggish and is able to deliver on customer needs rapidly. Vodafone is the world's largest mobile telecommunications community, employing over 65,000 staff and with over 130 million customers. The business operates in 25countries worldwide across 5 continents &40 partner network with200 million customer worldwide. Vodafone is a public limited company with listings on the London and New York stock exchanges.

Global recognition of the Vodafone brand is growing as the company rolls out its identity into new markets. However, it retains local names and imagery in markets where this is essential to maintaining the trust of customers. To help promote its image worldwide, Vodafone uses leading sports stars from high profile global sports, including David Beckham and Michael Schumacher. Basically our objectives were to find out the behaviors of the consumers towards the Quality of the product. •

After the price of the product.

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After the good presentation of the product which includes the servicing.

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If the consumer is after or comes for particular product and why, either because of effective advertisement on the media like television or news papers or other means of advertisement.

Vodafone Essar in India is a subsidiary of Vodafone group & commenced operation in 1994 when its predecessor Hutchison telecom acquired cellular licenses for Mumbai. Now it has operations in 16 circles covering India's mobile customer base with 34.1 million customers. Vodafone Essar under hutch brand has named the most respected telecom company best mobile service in country. They are most effective &creative advertiser of the year. Vodafone has partner with Essar group as its principal joint venture partner for Indian market. Vodafone launched there brand across in India on 21st September 2007

Essar group has diversified Business Corporation with interest in manufacturing as well as service sector.

o Steel o Energy o Power o Communication o Shipping &logistics o Constructions

Mission Statement “We will be the communications leader in an increasingly connected world” Vodafone Group Plc is the world's leading mobile telecommunications company, with a significant 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 Group's mobile subsidiaries operate under the brand name 'Vodafone'. In the United States the Group's associated undertaking operates as Verizon Wireless. During the last two financial years, the Group has also entered into arrangements with network operators in countries where the Group does not hold an equity stake. Under the terms of these Partner Network Agreements, the Group and its partner networks co-operate in the development and marketing of global services under dual brand logos.

At 31 December 2008, based on the registered customers of mobile telecommunications ventures in which it had ownership interests at that date, the Group had 289 million customers, excluding paging customers, calculated on a proportionate basis in accordance with the Company's percentage interest in these ventures.

The Company's ordinary shares are listed on the London Stock Exchange and the Company's

American Depositary Shares ('ADSs') are listed on the New York Stock Exchange. The Company had a total market capitalization of approximately £74 billion at 31 December 2008.

Vodafone Group Plc is a public limited company incorporated in England under registered number 1833679. Its registered office is Vodafone House, The Connection, Newbury, and Berkshire, RG14 2FN, England.

Vodafone is the world’s largest provider of voice and data communication services to consumers and enterprise customers. The company employs about 66,000 people around the world. The company headquarter is situated in Berkshire, UK. Vodafone operates through single reportable business segment: supply of communications services and products. At the end of March 2007, the company had 206 million customers worldwide. (Vodafone, 2007)

VODAFONE’S STRATEGIC OBJECTIVES •

Revenue stimulation and cost reduction in Europe

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Innovate and deliver on our customers’ total communication needs

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Deliver strong growth in emerging markets

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Actively manage our portfolio to maximize returns

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Align capital structure and shareholder returns policy to strategy

Key issues and problems Key issues and problems for Vodafone include how the company manages to coordinate its growth and to maintain its competitive advantage in the dramatically changing market environment of the dynamic telecommunication sector.

BRAND ELEMENTS OF VODAFONE

VODAFONE’S BRAND MANTRA

Vodafone’s internal brand mantra is simple and memorable. It stands for Passion, Reliability and Innovation. It is referred to throughout all business activities across the globe.

BRAND VALUE & BRAND PERSONALITY OF VODAFONE

A series of new corporate values and four desired brand personality traits for Vodafone were identified: •

Energetic

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Passionate

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Proactive

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Expert

To instill the new brand personality traits within the attitudes of employees at Vodafone, NKD chose a teaching method that involved hands-on "experiential learning" using a range of sensory techniques. At each learning event, employees were immersed in a friendly, themed environment which exuded the new Vodafone brand personality. NKD focused on three core programmers to reinforce the new company branding. A series of live events called Winning Together was used to inspire the company's 400 retail employees and equip them with world-class sales skills. This has since become the induction program for all new retail employees. All shop managers and regional area managers attended a two-day session called Leading Together, which provided leadership and management skills designed to be applied back in the workplace. Staying Together was a live review of key people processes, transforming them - where necessary - to reflect the new retail promise, brand personality and company culture. VODAFONE’S PERSONALITY CAMPAIGN Strengths


Relevant




Consistent




Integrated

Weaknesses




Not own able




Not sustainable

Vodafone’s brand essence is: Red: For the passion and spirit. Rock Solid: dependable and empathetic Restless: always challenging to improve and being funny.

COMPETITIVE ADVANTAGE The competitive advantage of Vodafone Services was that, that it is equally strong as Mobil ink but at an affordable price. This service possesses some kind of uniqueness which the other brand does not possess. Which differences to promote Not all brand differences are meaningful or worth-while not every difference makes good differences are meaningful or worth-while not every difference make a good differentiator. Each difference has the potential to create company costs as well as customer benefits .therefore; the company must carefully select the ways in which it will distinguish itself from competitors. A difference is worth establishing to the extents that it satisfies the following criteria:

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Affordable: “Our services are a unique in many aspects; one of them is the price. We have offered our communication services at low price than the other services. We are able to do this because of the new technology, equipments, and accessories. The modern techniques help us to minimize the cost in the tea production.”

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Important: The difference delivers a highly valued benefit to target buyer.

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Superior: The difference is superior to other ways that customers might obtain the same benefit.

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Communicable: The difference is communicable and visible to buyers.

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Preemptive: Competitors cannot easily copy the difference.

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Profitable: The product must provide a real benefit to consumer.

With a large market share in India's major cities and presence outside of the cities, they will be able to capitalize on India's cell phone expansion. Hutchison has said that it will not accept anything less than 14 billion and many think that the offers are creeping closer to 20 billion. Vodafone is a major player in this acquisition, but they have some hurdles to overcome. Vodafone has put forward a non-binding offer of 16.5 billion, but Essar has a chance to match this, and with the backing of Reliance Communications, the ante could come close to 20 billion. Essar Group's current 33% stake in the company gives them substantial power if Vodafone were to try to make changes to the company post-acquisition.

If Vodafone does indeed acquire Hutchison Essar, the share price might drop pending the final purchase price. I would wait and see the outcome of this before making a move on Vodafone. If its shares drop when the offer is announced, I would pick them up. The street thought Vodafone spent too much when it acquired Turkey's Telsim Mobil Telekomunikasyon, but Vodafone quickly turned that company around and it is in a much better position. Facing cellular saturation in the European market, Vodafone has found great growth potential in emerging markets and acquiring Hutchison Essar would only strengthen its business as India's cellular market begins to explode. VODAFONE'S MARKETING MIX –4P’S A longer term marketing strategy is underpinned by careful planning and a successful marketing mix. The marketing mix is a combination of many features that can be represented by the four Ps. •

Product - features and benefits of a good or service

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Place - where the good or service can be bought

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Price - the cost of a good or service

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Promotion - how customers are made aware of a good or service.

Product •

A product with many different features provides customers with opportunities to chat, play games, send and receive pictures, change ring tones, receive information about travel and sporting events, obtain billing information - and soon view video clips and send video messages.

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Vodafone live! Provides on-the-move information services.

Place •

Vodafone UK operates over 300 of its own stores.

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It also sells through independent retailers e.g. Car phone Warehouse.

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Customers are able to see and handle products they are considering buying.

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People are on hand to ensure customers' needs are matched with the right product and to explain the different options available.

Price •

Vodafone wants to make its services accessible to as many people as possible: from the young, through apprentices and high powered business executives, to the more mature users.

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It offers various pricing structures to suit different customer groups.

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Monthly price plans are available as well as prepay options. Phone users can top up their phone on line.

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Vodafone UK gives NECTAR reward points for every £1 spent on calls, text messages, picture messages and ring tones.

Promotion Vodafone works with icons such as David Beckham to communicate its brand values.

Above the line •

Advertising on TV, on billboards, in magazines and in other media outlets reaches large audiences and spreads the brand image and the message very effectively. This is known as above the line promotion.

Below the line •

Stores have special offers, promotions and point of sale posters to attract those inside the stores to buy.

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Vodafone's stores, its products and its staff all project the brand image.

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Vodafone actively develops good public relations by sending press releases to national newspapers and magazines to explain new products and ideas.

BRAND AND CUSTOMER COMMUNICATIONS

Among all the Brand most powerful brands ranking is Ranked 9th globally. Vodafone has continued to focus on delivering a superior, consistent and differentiated customer experience through its brand and communications activities. A new Marketing Framework has been developed and implemented across the business, which includes a new vision of expanding the Group’s category from mobile only to total communications “to be the communications leader in an increasingly connected world”. Brand and customer experience continues to implement Vodafone’s promise of “helping customers make the most of their time”. The brand function has also developed a methodology to develop competitive local market brand positioning, with local brand positioning projects now implemented in 12 markets. To enable the consistent use of the Vodafone brand, a set of guidelines has been developed in areas such as advertising, retail, online and merchandising, all including detail on how to make the brand work across every touch point. Since June 2006, eight markets have implemented the global retail design.

In September 2007, Vodafone welcomed India with the “Hutch is now Vodafone” campaign. The migration from Hutch to Vodafone was one of the fastest and most comprehensive brand transitions in the history of the Group, with 400,000 multi brand outlets, over 350 Vodafone stores, over 1,000 mini stores, over 35 mobile stores and over 3,000 touch points reframed in two months, with 60% completed within 48 hours of the launch. Vodafone regularly conducts Brand Health Tracking, which is designed to measure the brand performance against a number of key metrics and generate insights to assist the management of the Vodafone brand across all Vodafone branded operating companies. This tracking has been in place since 2002 and provides continuous historical data against key metrics in all 19 Vodafone branded operating markets. Each operating company manages a study that complies with the standards and methodology set by Vodafone Group Insights. An external accredited and independent market research organization provides global coordination of the methodology, reporting and analysis. As a result of these activities the Vodafone brand is now ranked number 11 in the Brand Top 100 global brands list, recently published in The Financial Times, with an estimated value attributable to the brand of £18.7 billion. For the 2008 financial year, Vodafone brand preference among its own users reached 81.9%, up 2.0 percentage points on the previous financial year, and a performance level that is 1.0 percentage point higher than its closest competitors. In addition, the brand consideration among non-users of the brand has increased in the 2008 financial year to 33.5%, 1.8 percentage points above its market share. STP ANALYSIS Segmentation 1. Income 2. Age 3. Service usage

4. Nature of customer 5. Life of service 6. Geographical condition Targeting Vodafone is adopting a multi segment approach. They are offering a series of differentiated products to their respective market. 1. Home calling cards for the family of those professionals who used to work abroad. 2. Rs. 10 recharge for small users. 3. Cheap SMS facilities for youth. 4. Facilities for circle users. Positioning -”Where you go network follows you.” 1. Hutch as a brand always tried to connect with consumers in simple honest & real manner, while Vodafone is more young &fun brand. So consumers will see a shift reflecting a more vibrant brand. 2. The pug & actor Irfan Khan will be retained for the brand promotion. 3. They are talking about the exclusively of the network & services they are offering to customers. 1. Stores 2. Mass media coverage 4. Innovative distribution to reach customer 1. Exclusive shops 2. Hubs &spoke 3. Associate distributor

5. Customer service 1. Shop &call centers 2. Vans 3. Help desk

BRAND POSITIONING OF VODAFONE IN 1997-98

Brand Positioning of Vodafone currently

VODAFONE’S POSITIONING OPPORTUNITY


Differentiate the market using two dimensions: 'service' and 'consumer mindset.'




Telstra, as the traditional market leader, was perceived to have an audience comprising a conservative and older mindset. Its communications reinforced this perception.




Optus with a service focus was increasingly becoming a conservative 'son of Telstra.'

BRAND EQUITY EVALUATION OF VODAFONE

Vodafone stands 9th position among all over the world’s brands in the terms of brand value.

Points of Parity and Points of Difference of Vodafone & Airtel

Points of Parity 1. Both the brands have same pricing strategies. 2. Both the brands have same market segmentation. Points of Difference

1. Target customers of Vodafone are middle class people whereas Airtel targets the elite and up market class people. 2. Airtel positions itself as a lifestyle brand whereas Vodafone positions itself as common man’s brand.

SWOT ANALYSIS OF VODAFONE

Strengths •

Diversified geographical portfolio with strong mobile telecommunications operations in Europe, the Middle East, Africa, Asia Pacific and to some extent the US

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Network infrastructure

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Leading presence in emerging markets such as India

Weaknesses •

Little focus of impact of mobile on climate.

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Negative return on assets (ROA) under perform key competitors like AT&T, BT Group, Deutsche Telecom

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US business not nearly as strong as European/rest of the world operations

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80% of its business is generated in Europe (see below for explanation)

Opportunities •

Improve accessibility to wide range of customers

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Focus on cost reductions improving returns

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Majority stake in Hutchison Essar in India

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Research and development of new mobile technologies

Threats •

Highly competitive market

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Still lags behind major competitors in the US

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Extremely high penetration rates in key European markets

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European Union regulation on cross-border cell phone usage by customers

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Airtel is the biggest threat in India, it has maximum market share in India.

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Meet the rising expectations of the brand loyal customers.

PEST ANALYSIS It’s an analysis of company at broad macro level &examines the company under heading of political, economic, social& technological factors. Political- governmental & legal issues affecting how company operates 1. Regulation 2. Infrastructure 3. Banning of phone in certain circumstances 4. Health issues Economical - Factors influencing the purchasing power of customer &companies post of capital. 1. Cost of 3G licenses 2. Cost of call being driven down. 3. Worldwide recession. 4. Third world countries. Social - Demographic & cultural aspects of environment witch influence customer needs & market size. 1. Health issue. 2. Demographic & social trends. 3. Picture phones.

4. Mobile Etiquette. 5. Saturation point. Technological – Modernization & innovativeness over a period of time leading to new & advanced technology. The cellular services has been started new technologies like following1. 3G 2. UMTS (2.5G) 3. GPRS/WAP 4. SMS/MMS

The VRIO Framework

Network infrastructure Diversified revenue base Leading market position

Value

Rarity

Imitability

Organization

Yes

No

No

Yes

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Competitive implications

Competitive parity

Temporary competitive advantage Sustained competitive advantage

Network infrastructure One of Vodafone’s key technologies and resources is the strong network infrastructure that supports its operations. To be able to provide mobile services, a strong network infrastructure is fundamental for the company. Vodafone operates 2G networks, through GSM networks, in all its mobile operating subsidiaries, offering its customers services such as voice, text messaging and basic data services.

All the networks operate GPRS or 2.5G as well, which enables wireless access with mobile devices to data networks like the internet. Vodafone also controls 3G networks offering its customers mobile broadband data access services allowing data download speeds of up to 384 kilobits per second. 2006 launched High Speed Downlink Packet Access (HSDPA) technology shortens download times significantly with data transmission speeds of up to 3.6 megabits per second and makes the usage of mobile broadband services much more pleasant for the customers. HSDPA is enabled in the existing 3G network with after software updates. (Vodafone, 2007) The strong network infrastructure is a valuable resource and enables the company to respond to the growing customer needs with high quality services now and in the future. This valuable resource is not a rarity in the wireless telecommunication industry and therefore it cannot be costly for the competitors to imitate. Many of the world’s large mobile operators have the same access to the same technology as Vodafone and a control over massive networks. Vodafone is very well organized to exploit the full competitive potential of the network infrastructure by providing the employees a productive and safe working environment with attractive performance based incentives. This resource is an organizational strength and generates a competitive parity. Diversified revenue base By acquisitions, stakes in companies, and partner networks Vodafone has strategically expanded its presence to consider the whole world. The company has equity interests in 25 countries. Vodafone’s partner network arrangements extend to a further 38 countries. (Vodafone, 2007) Vodafone has significant mobile operations in countries such as Germany, Italy, Spain, UK, Egypt, Kenya, South Africa, Australia and New Zealand.

In 2007 the largest geographic region was Germany with a contribution of 17.1% to the total revenue, followed by UK 16.3%, Spain 14.1%, Italy 13.5%, and other Europe 13.5%. Arcor and Pacific contributed 9%, Middle East, Africa and Asia 8.2%, and Eastern Europe the rest 9% of the revenues. (Datamonitor, 2007) Vodafone’s global reach and geographically diversified revenue base is a valuable resource for the company.

This valuable resource helps the company to compensate its risks and losses. As diversified as Vodafone’s revenue base is it is a rarity within the wireless telecommunication industry. Vodafone’s strategy is to actively manage their portfolio by investing into markets that offer a strong local position.

With strict financial investment criteria Vodafone maximizes its and its shareholders returns. (Vodafone, 2007) Vodafone’s competitors would not face a cost disadvantage in trying to imitate this resource. It is more about the strategy that a company implements than about the financial resources. Vodafone is well organized to exploit the full competitive potential of this valuable and rare resource.

The Board’s goal is to make sure that the company’s employees are aware of Vodafone’s strategic goals and mutual obligations. This resource is an organizational strength and distinctive competence and generates a temporary competitive advantage.

Leading market position Vodafone is the world’s leading mobile telecommunications company. Vodafone operates in Europe, the Middle East, Africa, Asia Pacific and the US by subsidiary undertakings, associated undertakings and investments. In countries with significant operations Vodafone’s market shares are impressive; Germany 36%, Italy 33%, Spain 31%, UK 26%, South Africa 58%, US 25%, Egypt 48%, and Australia 18%. (Data monitor, 2007) A strong market share with the market leader position is an extremely valuable and rare resource which improves the company’s brand image and gives it a solid foundation to enter new potential markets. This resource is imperfectly imitable and the competitors would face a cost disadvantage in obtaining or developing it. Vodafone’s market leader position is based on the passion and effort of the company’s employees.

The company is well organized to manage effectively its employees to reach their full potential and benefiting themselves and the company. This resource is an organizational strength and sustainable distinctive competence and generates a sustained competitive advantage.

Porter Five Forces Of Vodafone

Rivalry The threat of rivalry in this business is impacted by the low number of big firms in the market. There are a few numbers of large firms worldwide that competes for the market share; this lowers the threat of rivalry. The firms that are in the business however are very competitive and because of a relative slow market growth in this industry the firms fight over the market shares that are out there and that increase the threat. There is also a low level of switching costs to the consumer and a low level of product differentiation and this further brings the threat level of rivalry up. So in the mobile network industry the threat of rivalry is fairly high.

Substitutes The threat of substitutes for voice and data communication over the traditional network is moderate. People calling over long distances could instead of picking up a phone go to a computer and call through that. The low costs of computer calling could potentially take over most long distance calling. The more local calls and business calls would be more secure for the mobile market, although cell phones with the ability to use the internet to make calls are being made available and will soon take a considerable market share of calls made. The threat of substitutes can be reasonable high in this industry.

Buyers The threat of buyers in this industry can be considered fairly low. The individual buyer has no impact on the price of the products offered. Suppliers: Supplier’s power in some aspects of this industry is high. In the cell phone part of the business the suppliers of the phones can have a big impact on the price of products and the condition of

the deal they make with the provider. One clear example of this is when apple launched their new I-phone. They made an exclusive contract with AT&T so they had the exclusive right to be the service provider to their phone in America. So the supplier’s power in this industry is high.

New Entry The threat of entry is highly influenced by the economy of scale of the existing companies. The large well established companies that have a strong foothold in the market and a known brand name would make entry for a new company costly. Although there are some new arrivals the larger firms control the market and will put pressure on any new entries. The threat of new entries is fairly low for the bigger companies.

Vodafone and Linksys 3G/Wireless Router Opens New Market and Demonstrates Strategic Collaboration Launched in Spain in September 2005, the Vodafone and Linksys 3G/Wireless Router is now available in Australia, Austria, Germany, Greece, Ireland, Italy, the Netherlands, New Zealand, Portugal, Spain, South Africa, and the UK. It is the first solution of its kind to be widely available through established third-party distributors and resellers, supported by an extensive customer service infrastructure. The team believes it is at least 12 months ahead of competitors.

Using Vodafone’s Mobile Connect 3G/UMTS (Universal Mobile Telecommunications System) data card in combination with the Linksys WRT54G3G Wireless-G Router, it is a “plug-and-go” solution that works wherever there is 3G/UMTS coverage (or the lower-bandwidth General Packet Radio Service [GPRS]) and a power supply. The technology enables wireless networking for up to five users and access to additional devices, such as printers, via Ethernet or wireless connections. Access to e-mail, remote corporate networks, and the Internet operates at up to384 kbps over 3G/UMTS.

The Vodafone and Linksys 3G/Wireless Router brings together two tried-and-tested technologies to create a solution that crosses traditional fixed/mobile boundaries, born of the growing user demand for fixed/mobile substitution and convergence.

Vodafone launches own-brand push email Vodafone has announced the first network-designed email service from an operator – Vodafone Business Email. Alongside Vodafone Business Email, Vodafone will make Blackberry Connect and Microsoft Windows Mobile-based devices and email service available in the near future. These three new services take pride of place alongside the successful BlackBerry from Vodafone and Vodafone Mobile Connect services, giving customers greater mobile email choice. BlackBerry Connect allows new and existing Vodafone enterprise and SME customers, via BlackBerry Enterprise Server, to benefit from proven and popular BlackBerry features, such as push email, attachment viewing and secure encryption on a broader range of handsets. The application extends the availability of mobile email and PIM across the organization without changes to hardware or the need for further IT planning. Alongside these new email solutions, Vodafone will soon offer all Vodafone smart device customers access to enhanced customer service support. PROMOTIONAL STRATEGY EVALUATION

Brand Identity Improvement of Vodafone over a period of time 1. At most beginning – only Product/Service

2. Start Branding

3. Branding started with strategic management

4. Came –up with Marketing Mix

5. Brought IMC (Integrated Marketing Communication) with innovative promotional strategy

6. Current Scenario of Vodafone

Marketing strategy Advertising Vodafone works with icons such as David Beckham, Irfan khan to communicate its brand values. Advertising is largely done on TV, on billboards, in magazines and in other media outlets which reaches large audiences and spreads the brand image and the message very effectively. Besides Stores have special offers, promotions and point of sale posters to attract those inside the stores to buy. Vodafone actively develops good public relations by sending press releases to national newspapers and magazines to explain new products and ideas.

Nothing has been as popular as cricket during cricket seasons in India. The recent ads of Vodafone, telecom provider in India, named ‘ZooZoo’ have got an exception to it. The ZooZoo ads have melted the millions of Indian hearts making it more popular than India Premier League (IPL – Twenty20 cricket). In 2007, Vodafone acquired 67% stake in Hutchisson and re-branded Hutch telecom into Vodafone. Following is the story told by the ads it of how Hutch’s brand image transitioned to Vodafone’s brand image while pulling along the consumer’s perceptions and preference towards the Hutch brand.

The Hutch Brand – ‘Wherever You Go Our Network Follows’

Hutch had a very strong brand personality. The slogan “Wherever you go our network follows’, was closely tied up with the Hutch – Pug campaign. The Hutch network was personified as the adorable pug dog following the owner, who is normally a very cute kid. Let’s look at these ads. After watching these above ads, one would definitely fall in love with the brand. The ads had a very simple message that was communicated through the dog with backdrop of a beautiful song. The Hutch network was personified as the dog and the Hutch brand automatically drew the brand personality of being adorable, cute. The dog was named Hutch dog and became very popular in India. The dog became the brand ambassador and a great brand asset to Hutch. Hutch leveraged this popularity of the dog and used the dog in its websites and in all its communications. Hutch was able to make a close connection with the people through this Hutch- Pug dog campaign and will this relationship sustain after its acquisition by Vodafone? The Vodafone Brand – ‘Make the Most of Now’ Vodafone ads are also very good. Though both Hutch and Vodafone ads are captivating, they are in different ways. When Vodafone acquires Hutch, will the Hutch’s brand personality of being cute fade out and become more funny and youthful?

Vodafone – India Launch

Vodafone spent around 50 million USD ( 250 Cores INR) for this brand transitioning. Vodafone very well understood that Hutch dog represents the network and communicated the change to Vodafone beautifully without losing the charm present in earlier Hutch ads. Later, Vodafone continued to use the Hutch dog in their commercials, but, in different way. You might have noticed that the new Vodafone ads liked girls than boys and have changed the song. Yet, these ads resembled Hutch ads closely.

Vodafone differentiates itself from other telecom operators through its value added services (VAS) and it wanted to educate the customers about it. Unfortunately, the hutch dog had its

limitations and was fired from the commercials and Vodafone brought in traditional commercial with adults to stress on the VAS. These ads didn’t appeal much although communicated the message very well. The ads were no more sweet and cute although they had a wider appeal owing to the young generation in the ads and the intentional humor. But just when everyone thought that these cute ads have grown into adults there come the savior – Zoo Zoo ads by O&M. They simply did the job of communicating the various VAS in a fascinating way. I can say they are simply the best. The Vodafone’s services were personified as quirky and lively personalities named Zoo Zoo. The comical way of communicating the message brought in the good old connection what Hutch earlier had with people. I can hear the whispering that the Hutch’s ad are ‘cute’ again or even ‘cuter’. Vodafone India understood what Hutch stood for and tried to connect to people in the same way. Vodafone could have forced its global appeal to Indian market but, it didn’t, rather it created a whole new persona for itself in the Indian telecom market. This confirms that there are no global brands but there is definitely global brand management. Hats off to Vodafone are for being glocal (Global and local) in their approach. I would say the Hutch to Vodafone brand transitioning is one of the greatest brand transitions in this world of brands. Vodafone is continuing to invest in the mobile advertising market .Vodafone already has an offer of advertising spaces aimed at advertisers and advertising agencies covering various formats on offer on the Vodafone live portal that is header banners, channel sponsorship and sponsorship of free MMS alerts. Various brands have been contacted to advertise via this new medium, which has great interactive potential and a very wide audience. Advertisers such as CGD, Nestlé and Worten, and agencies such as Zenith Opt media, in association with Creative Partner, and Media Contacts, have risen to this challenge and designed advertising campaigns especially for this medium and created mobile websites for the brands they are promoting on the Vodafone live portal.

Vodafone aims to strengthen its relationship with media agencies and advertisers to ensure that all players in the market are aware of mobile advertising solutions. The Vodafone Group already offers mobile advertising solutions in 19 countries around the world, confirming the growing importance of the mobile advertising business worldwide.

SPONSORSHIP

Vodafone’s global sponsorship strategy has delivered a strong set of results across all Vodafone markets. Central sponsorship agreements, including the UEFA Champions League and the title sponsorship of the Vodafone McLaren Mercedes F1 team, have supported multiple business objectives and enabled Vodafone to provide customers with differentiating brand and product experiences. The strong performance of the Vodafone McLaren Mercedes F1 team during the 2007 season enabled Vodafone to maintain a dominant presence in one of the world’s most popular annual sporting events. Vodafone successfully integrated the sponsorship into a wide variety of business activities including communications, events, content and the launch of three bespoke handsets. In Vodafone’s first year as a sponsor of the UEFA Champions League, Vodafone became recognized as a leading sponsor of the competition (Source: TNS Soccerscope, May 2007) and used this association to showcase a variety of products and services in a manner designed to build greater affinity with football fans across all relevant territories. In January 2008, Vodafone became a global partner of the Laureus Foundation, which tackles various social challenges worldwide through a program of sports related community development initiatives. This agreement complements Vodafone’s long standing relationship with sport and aims to help Laureus to use sport as a catalyst for inspiring positive social change. To maintain a relevant and strategic role for global sponsorship investments, Vodafone is continually reviewing the portfolio to maintain pace with business and customer needs. On this basis, Vodafone has decided to discontinue the UEFA Champions League sponsorship at the end

of the 2008/9 competition and increase emphasis in global music opportunities. Music’s broad appeal and product relevance provides a host of new and exciting opportunities for the business and the Group’s customers. DISTRIBUTION Direct distribution Number of directly owned stores 1,150

Vodafone directly owns and manages over 1,150 stores. These stores sell services to new customers, renew or upgrade services for existing customers, and in many cases also provide customer support. A standard store format, which was tested in 2006, was rolled out in 11 markets during the 2008 financial year. The store footprint is constantly reviewed in response to market conditions which resulted in, for example, Vodafone opening a further 90 stores in Spain and 21 stores in Romania during the year. Additionally, all stores in India were re branded as Vodafone and over 40 stores were refurbished to the Group’s standard format. The Group also has 6,500 Vodafone branded stores, which sell Vodafone products and services exclusively, by way of franchise and exclusive dealer arrangements. The internet is a key channel to promote and sell Vodafone’s products and services and to provide customers with an easy, user friendly and accessible way to manage their Vodafone services and access support. As a result, a specific Group wide program is currently being rolled out across all controlled markets, in order to ensure Vodafone websites have state of the art online capabilities and provide the customer with an excellent and consistent online experience. Additionally, in most operating companies, sales forces are in place to sell directly to business customers and some consumer segments.

Indirect distribution Number of branded stores 6,500

The extent of indirect distribution varies between markets but may include using third party service providers, independent dealers, distributors and retailers. The Group hosts MVNOs in a number of markets. These are operators who buy access to existing networks and resell that access to customers under a different brand name and proposition. Where appropriate, Vodafone seeks to enter mutually profitable relationships with MVNO partners as an additional route to market. Vodafone’s Campaign Strategy


Develop a personality-led campaign that would inject attitude into the Vodafone brand, break from the serious and rational category formula, and make the Vodafone brand more relevant and motivating to its new target, 18 to 39-year-olds.




The brand personality manifested itself via the character of 'Kramer' (from the TV series Seinfeld and played by Michael Richards) to appear in all television, radio, print and point-of-sale executions.




Results were needed quickly and couldn't wait for Vodafone's brand personality to build over time. A character like Kramer would give the Vodafone brand instant personality

Brand Exploratory of Vodafone Questionnaire

1. Which cell phone service provider is the best? a. Idea b. Vodafone c. Airtel

d. Reliance e. Tata f. Other

41 of the sampled opined that Airtel was the best in the business while idea stood second at 29 Vodafone came third at 28. This indicated a clear shift towards Airtel, with Idea and Vodafone at neck and Neck.

2. What Cell phone service provider do you subscribe to? a. Idea b. Vodafone c. Airtel d. Reliance e. Tata f. Other Of the samples collected most people were subscribers of Airtel and Vodafone with 37 and 35 responses each. Idea was nest at 18 the rest were the others.

3. Why are you with your service provider? What makes it special? a. Value for money b. Coverage & Quality c. Switching costs d. Schemes & Benefits e. Others __________ While most of the Vodafone users 17 selected switching costs, a few of them also indicated Value for money 7 and Schemes and Benefits 5 respectively. Airtel users indicated value for money 20, and

coverage and quality 7. This indicated that Vodafone customers were in it only because of the high switching costs associated with a switch in cell phone operators.

4. What comes to mind when you think about Vodafone a. Red & White Scheme b. Walk n Talk c. Pug d. Zoo Zoo e. F1 & Louis Hamilton f. Happy to Help g. Express Yourself h. Make the most of now i. Others____________. Most selected the pug at 96 while zoo zoo and the Red and white scheme brought in 56 and 54 ticks respectively. Express your self was the most wrongly ticked association and the same can be attributed to the proximity of colour scheme that Airtel shares with Vodafone.

5. Which comes to mind when you see the following

a.

b.

c. 100 percent polled for the pug with Vodafone and only 72 associated Vodafone with the logo. Zoo Zoo reminded 78 people of Vodafone.

6. What impedes Vodafone from being the best Cell phone service provider a. Coverage & Voice clarity b. Customer Service quality c. Pricing d. Schemes e. Others______________ Most people felt that Vodafone had customer handling issues. This would not go well with new “Happy to Help” tagline. Vodafone’s customer relationships have been the bone of contention for a long time.

7. Recommendations & Suggestions

A few people recommended that Vodafone started with 3G related services and improve on their coverage. But most suggestions were related to Customer service and other related complaints.

SUGGESTIONS FOR RE-POSITIONING VODAFONE:

It is perception in the mind of the target customer. Positioning is the act of designing companies offer and image so that it occupies a different place in target customers mind. it involves in finding proper location in the mind of target customer so that they think about the product and service in the right and desired way. Vodafone’s positioning in the mind of the customer should be unique, distinctive, and consistent, it should be relevant to target needs .i.e. benefit oriented and should be coherent with other brand signals. As Vodafone’s customer service is bad they should concentrate on problem solution prompts and benefit driven positioning by focusing on clarity. And customer service though Vodafone gives out the message happy to help however their customer service is very poor. Their helpline number offers/schemes to customers but does not connect them to customer support manager.

Vodafone has positioned itself as common man’s brand. Vodafone is more young &fun brand. So consumers see a shift reflecting a more vibrant brand. Similarly Vodafone uses the pug, zoo-zoo & actor Irfan Khan will be retained for the brand promotion and now along with it needs to concentrate on customer service and good network coverage. It is important that Vodafone updates its brand positioning .not only this it should also follow it. Message given by Vodafone is that they are happy to help their customers however its customer survives is poor and the network coverage is also bad.

Main Problem Statement: How can we revolutionize the wireless telecom industry Strategic Option 1:

There is a lot of buzz in the telecommunication market about 2G and 3G networks. It was the dream of the CEO of Vodafone to bring the 3G network into the hands of the American consumers a few years back, but Vodafone’s partner in America did not want to invest in the new 3rd generation network.

The new technologies that are out in the market now can give Vodafone the opportunity to be in front of all the competition in the American market. What we propose that Vodafone enters the American market with a 6th generation phone and phone service for cell phones. The type of phone is a phone that not only works on the regular network used to day in America but can also use the internet to make calls, not only to other Vodafone customers but to all networks.

The technology is not new and exists today in America, but not in the mobile phone market. Vonage and Comcast offer their customers a phone service based over digital networks and not over standard phone lines. The way Vodafone is going to differ themselves from the existing firms is to offer this to cell phones.

The way that this system works is that instead of the cell phone using the regular network to connect the calls it makes, it uses any wireless internet access that it can connect to. This means that calling people from you cell is virtually free and you would only pay a monthly charge on you cell phone to Vodafone. If you cannot find a wireless network to connect to, the phone can use a regular phone network as a backup.

With a strategy to enter and take a market share in America like this one, you do not have to make large fixed investments in the hardware. Instead you have a 6th generation phone that can be operated on both the old networks and on digital networks.

To get these phones and plans out to a large customer group, Vodafone should concentrate on the big cities first, making a encrypted wireless network available in the city that only their phones can access. This way the company can see how the customers like being connected to a faster and better network with a more advanced phone then available in the American market.

The latest hype in the American cell phone market is the Iphone; this phone is looked into one carrier and can over the carrier’s network connect to the internet. The phone is locked to one carrier (AT&T) but can be hacked and used by others. The Vodafone would be configured so that you cannot hack it by the software allowing the consumer to connect and call for free to any phone in the world by simply not connecting that person to the Vodafone network. The phone could be free for all providers to sell but some functions on the phone like IP communication would be useless. Since this is one of the biggest selling points for the product you basically lock the customer in to your carrier. To be able to make money of you customers you set a fixed monthly payment for the plan and no extra charges for calling people over the wireless networks, but standard charges for regular charges made from the phones.

Strategic Option 2:

It is hard to try to develop a strategic option to revolutionize the telecom industry for a company that has already been involved in shaping the industry for many years. Option 2 will differ from Option 1 in multiple areas. For option 2 we propose that Vodafone enters the American market place as soon as possible as Vodafone the company instead of through subsidiaries. Vodafone has always focused their marketing efforts mainly through sponsorships of large sports teams such as Manchester United Football Club and McLaren Mercedes Benz Formula 1 team along with hundreds of others. We believe that Vodafone can copy many of the elements that European

customers have been satisfied with directly over to the American market which are currently lagging behind by almost five years compared to Asia and almost two years compared to Europe. Providing 3G service in the United States is needed and we believe that Vodafone could successfully gain market share in the United States. Vodafone has very high brand equity worldwide and we believe that it is time to establish a grip on the US market.

RECOMMENDATION & IMPLEMENTATION:

It is easy to see similarities between Vodafone and Sir Richard Branson’s Virgin Corporation, other than the fact that the logos look similar. They are both UK based companies that are very dynamic and the company cultures are similar. Both companies are not afraid to be innovative and to move in new directions. We therefore recommend that Vodafone choose to move forwards with Option 1. This option involves the most risk, but we firmly believe that the industry is moving more and more towards telecommunication via wireless broadband connections. Just take a look at the Apple iPhone which with just one push on the touch screen switches from WI-FI to pure telephone mode. The

iPhone does not provide IP-voice

communication yet but we firmly believe that it is just a matter of time before it and others will.

Implementing Option 1 we recommend that Vodafone establish strategic alliances with certain US based companies to be able to provide WI-FI hotspots that the handheld devices connect to. Also establish alliances or strengthen alliances with the phone manufacturers. We recognize that there are some privacy issues with Option 1 that needs to be solved, but this could not be done overnight and those issues will apply to the Vodafone’s competitors, such as AT&T as well. We choose to recommend Option 1 because we have identified an opportunity for Vodafone to become the industry innovator and leader also in the United States over time. And we believe that it is possible due to the fact that the company is dynamic and it is not afraid to explore new opportunities. The same level of brand equity can be achieved in the US as in Europe and Asia.

Suggestions for Competitive Response

Vodafone must now seek to integrate its WLAN and UMTS services, since a portfolio that touts separate data card products, separate pricing plans and separate billing processes for distinct technologies is no longer considered competitive. As a first step, Vodafone should fold WiFi usage into its "Unlimited" Mobile Connect 1GB offer for 3G/GPRS. Vodafone should offer ten Business E-mail handsets of its own; the existing two-device BlackBerry range looks a little thin and unappealing by comparison.