PESTLE analysis of Vodafone

Introduction

PESTLE stands for political, economic, social, technological, legal & ecological environment. PESTLE analysis is that tool which is used in the analysis of an organization’s macro environment. It warns and inform a business about the external factors on which the business has no control over. The article presents PESTLE analysis of Vodafone.

Presenting the PESTLE analysis of Vodafone

Political Environment

An important element of the PESTLE analysis of Vodafone is the political environment. Political environment analyses how the political factors affect a business and this factor of PESTEL suggests how to deal with them and work in such political environment. Political issues such as tariff, tax rate, fiscal policies and many issues can harm the profitability of a business. Vodafone operates business in many countries and the political factors of all country harms their business. For example, in Europe they have to pay high tax rate. It seems that the operational cost in Europe is higher than the countries where tax rate is lower. Vodafone gets influenced by the factors such as: corruption level, intellectual property protection, pricing regulations, interference of government in technology sector and many more. Political stability, freedom of opinions, level of democracy etc. are perceived to be at high levels in the UK; such situation has created positive business environment for Vodafone.

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Economic Environment

Another important element of the PESTLE analysis of Vodafone. Economic environment of PESTEL signals the profitability of the market and suggest a business how to behave in such environment. Financial abilities of a country and its customers influence an organization’s profit level. Vodafone has their long standing service in the UK. They provide their telecommunication service by identifying the financial stability, inflation rate and other economic factors of a country. GDP of UK in 2019 was $2.829 trillion which is among world’s top 5 economies (IMF 2019). GDP growth of the country is almost 1.8% in Q1 in 2019 and the inflation rate is only at 1.8% (ONS, 2017). These economic indicators imply that UK is world’s one of the most prosperous countries. These factors have helped Vodafone to plan and grow their business with future possibilities. For example, British customers have world’s one of the highest per capita income with 44,177 British Pound (IMF, 2019). This has motivated Vodafone to emphasize on superior quality service with premium pricing.

Social Environment:

Social environment shows the social factors, opportunities and threats originated from social environment. Also, it navigate a business to act in right way. Telecommunication industry is growing fast because technologies are getting more advanced. Increasing number of population using smartphones is the positive aspect for Vodafone because most of the people use technology and it increase the demand of their telecommunication service. At the same time, such growth also creates more competitive threats from other service providers. Vodafone designs their marketing message by considering the shared beliefs of host country’s people. It helps them to attract more customers and build attachment with them. For example, the company passes marketing messages by considering the culture of host country and it shows people that Vodafone respect their culture.

Technological Environment

An important element of the PESTLE analysis of Vodafone is the technological environment. This factor navigates a company technological bottlenecks and opportunities and help a company to utilize the opportunities. For example, transportation sector has become so much developed in recent days in the UK. Uber is growing fast with the technology and people are enjoying their services. People can get car for a trip by using software of the company and operates through mobile. Mobile industries and these type of industries are working together to provide better service and become profitable. Advancement of technology has made the telecommunication industry successful. Vodafone uses advanced technology to provide their customer fastest wireless connection and the fastest speed of the service increases their demand. Low speed consumes time and fast speed helps people to use telecommunication service smoothly.

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Legal Environment

Legal environment of PESTEL warns a business about the legislations, rules and regulations of a country and helps them to make right legal decision. Vodafone is a global company and they should maintain the law such as: employment law, consumer protection law, discrimination low and other laws related with their service. If they do not consider the factors, they will face problems in executing business. They should pay minimum wages to their employees, consider consumer protection, anti-trust law in wireless industry and other laws of each country to prevent the difficulties of legal issues. Vodafone will maintain copyright, patents and intellectual property law to preserve their right and it will not permit competitors to copy their service.

Ecological Environment

The last important element of the PESTLE analysis of Vodafone is ecological environment. Ecological factor of PESTEL informs a business about environmental issues and helps a business to make decision to protect the environment. Viewing the concern for environment globally, Vodafone have to execute business in ecological way and stay aware about their impact on environment. They are concerned about environment pollution and maintain the law related environmental issues. They try to use environment friendly production process to decrease global pollution. It helps them to increase reputation by contributing in reducing global pollution. They should consider the environmental issues such as: weather, climate change, and recycling, waste management in technology sector, regulations of air and water pollution regulations in telecommunication industry to operate business without any difficulties.