DHIKA MAHAPUTRA

STRATEGIC MANAGEMENT

INDUSTRIAL ENGINEERING - 5

Vodafone Porters Five Forces Analysis

Force 1 : Rivalry Among Competing Firms
As the European telecommunications market is highly saturated and regulated because the
competition in Europe is high and this is more favorable for Vodafone. There are many
competitors of Vodafone in the telecommunication market such as O 2, T-Mobile, and 3. O2 is
a Spanish telecommunications company and it has more than 140 million customers in total. TMobile has strongly increased its presence within the European area. It has 12 direct and
indirect shareholdings in mobile communications companies worldwide and has around 120
million customers at the end of 2007 and T-mobile is growing rapidly. 3 is a new competitor in
Europe. The strategy of this company to enter the market is one of low price and it is expected
to remain unchanged for the next couple of years
Force 2 : Potential Entry of New Competitors
New initiatives from outsides are not likely in an industry that is highly regulated and protected
by significant barriers to entry. The increasing between mobile network operators and online
entertainment providers leads to a redefinition of the industry boundaries. It makes
communications usage and purchases will also increasingly intertwine with those of other
digital goods. This is already happening now with VoIP (Voice over Internet Protocol), cablecos,
and Internet access providers. Simultaneously, retailer will entering the business market in the
form of the virtual operator network concept and competing on commodity services.
Force 3 : Potential Development of Substitute Products
The increasingly vague scope of the market boundaries has drawn considerable interest within
the industry. Fixed-mobile line conversion is a real future prospect for network operators. At
the same time though, Internet calling services through VoIP such as Skype are experiencing
enormous growth. Skype essentially offers international calling at the price national calls.
Force 4 : Bargaining Power of Suppliers
The concept suppliers of the mobile network operators market should be redefined indicating
the providers of mobile devices. It is very important for mobile network operator and device
providers, so Vodafones global have an exclusive deal with phone manufactures. Yet, Vodafone
develop its own from mobile network operator and device. In phone market, it will reducing the
firms dependence and making its offering more complete.

DHIKA MAHAPUTRA

STRATEGIC MANAGEMENT

INDUSTRIAL ENGINEERING - 5

Force 5 : Bargaining Power of Consumers

The main factor that have marked recent developments in the mobile services market is the
enlargement of subscriber bases in the developing economies, particularly in the major
emerging markets but also in the industrialized countries, despite already high penetration
rates. In the mature operators market face competition and consumer demand for more
features, minutes and texts, for less money. So, the companies trying to cut costs and these
benefits in the form of price cuts to consumers to make consumers are becoming increasingly
sophisticated and make use of the wider range if services that mobile operators have to offer.