Category: Vodafone

Introduction

Vodafone Group Plc is a company based in England; it provides telecommunication services and operates worldwide. The company is listed in the London Stock exchange primarily but has a secondary listing on Nasdaq. This paper has analyzed the financial reports of the company, compared it with its peers, and evaluated the risks of investing in Vodafone Plc. On the ratio analysis, four types of ratios were analyzed: solvency, profitability, valuation, and liquidity ratios. For solvency ratios, the debt-to-equity analysis found that Vodafone was in the safe zone. ROE is the profitability ratio that was analyzed; it revealed abysmal performance from the company. Valuation ratios such as PB showed that Vodafone had a low return on equity and assets. Efficiency ratios analyzed were asset turnover, where Vodafone was found to have a moderate rate of converting assets to revenue. A look at the company’s financial statements showed that, ironically, 2020 was a better year for them than 2019 and that the company could be in a better position to recover from the effects of the pandemic. In comparing it with its peers, it was revealed that the rosy 2020 results were not an industry-wide phenomenon. It also revealed that its ratios are within tolerable industry averages. On the valuation of its stock, Vodafone stock is a buy since it has been on sideways movement for quite some time and is doing some restructuring that could increase its revenue.

Company Overview

Vodafone Group Plc is a telecommunications company from the UK with headquarters in Newbury, England. Some of the regions in which it operates include Africa, Asia, Europe, and Oceania; the company operates in 20 countries as of 2020 and has partnerships in 48 others (“Vodafone”). Vodafone Global Enterprises is the organization’s global division and provides IT and telecommunication services to more than 150 clients. Vodafone’s primary listing is the London Stock exchange where it is part of the FTSE 100; it also has a secondary Nasdaq listing. Vodafone employs over 93,000 people as of 2020, and its CEO is Nick Read, while Jean-Francois Van Boximeer is the chairperson (“Vodafone”). The company reported €44.974 billion in revenue, €4.099 billion operating income, €455 million in net income, and €62.625 billion in total equity (“Vodafone Group Income”). This paper will look at the company’s financial reports, compare them with its peers and evaluate the risks associated with investing in them.

Vodafone has seen a lot of developments lately and is in the process of listing its mast division. As of March 31, 2021, Vodafone stock was trading at £132.66 with a volume of 18.563 million (“Vodafone Group Historical”). Over the past 52 weeks, the highest stock price was £142.44, while the lowest was £87.11 (“Vodafone Group Historical”). The company is said to initiate another stock buyback program over the coming year.

The company has already arranged with Morgan Stanley to launch the buyback that is supposed to be launched on March 22th. The company has allocated £330 million for the plan and the number of ordinary shares to be bought should not be more than 256.8 million (“Vodafone Group Historical”). Vodafone’s Vantage Towers is set to launch an IPO with a revised price range of between 24 and 25 Euros, according to the bookrunner (“Vodafone Group News”). Vodafone projects to raise $3.3 billion from the towers listing. In Italy, Vodafone is seeking €1.1 billion from damages after the country’s competition watchdog ruling over market abuse allegations (“Vodafone Group News”). Nevertheless, under infrastructural news, France’s Orange is said to seek more partnership with its European counterparts Vodafone and Deutsche Telekom after the firm exited the towers business.

Ratio Analysis

Solvency Ratios

Solvency ratios measure an organization’s ability to meet its long-term debt obligations. The metrics are used mainly by prospective lenders of the company. As of March 2018, Vodafone Plc had a debt-to-equity ratio of 1.12, which increased to 1.25 in March 2019 and further to 1.69 as of March 2020 (“Vodafone Key Metrics”). This means that the company was using more debt to finance its operations. The ratios are consistently above 1.00, indicating that they had multiple years where long-term debt was more than shareholders’ equity. This means that if they were to liquidate, they would struggle to pay their debts.

Profitability Ratios

Profitability ratios are financial ratios used to assess a business’s ability to generate revenue compared to its assets, costs, and shareholder’s equity. As of March 31, 2021, Vodafone had a Trailing Twelve Months ROE of 1.89 and an annual Return on Assets of -0.28. ROE indicates a company’s ability to turn equity into income; 12%-15% ROE is considered desirable. Vodafone had an abysmal result with 1.89 ROE (“Vodafone Key Metrics”). It also had a negative ROA indicating a negative rate of turning assets into income.

Valuation Ratios

Valuation ratios indicate the attractiveness of a company to investors. The stock price of a company defines its valuation. Vodafone had an annual Price to Book (PB) ratio of 0.68, Price to Earnings (PE) excluding extra items of nil; the same metric for TTM was 18.23 (“Vodafone Key Metrics”). The company had a nil EPS because of low EPS. The PB ratio indicates that the company’s market capitalization is a fraction of the actual value of assets minus liability; this shows that Vodafone has low returns on equity and assets. However, the ratios do not say much unless analyzed historically to deduce a trend or compared to industry peers to indicate outliers.

Efficiency Ratios

Efficiency ratios indicate a company’s internal usage of assets and liabilities. They are also called activity ratios; they analyze receivables turnover, liabilities repayment, usage of equity, and inventory usage. Vodafone Plc had an annual asset turnover of 0.29, a TTM asset turnover of 0.28, an annual inventory turnover of 47.24, and an annual receivables turnover of 5.75 (“Vodafone Key Metrics”). An asset turnover of 0.29 shows a moderate rate of converting assets into revenue (“Vodafone Key Metrics”). The ratios are best compared horizontally or against industry peers.

Liquidity Ratios

Liquidity ratios are financial ratios that indicate a company’s ability to meet its debt obligation without needing to raise external capital. Examples of liquidity ratios are the current ratio and quick ratio. From the latest financial report, Vodafone has a current ratio of 1.01 and a quick ratio of 0.99 (“Vodafone Key Metrics”). The two ratios calculate short-term debt against current assets, but the quick ratio excludes inventory in its calculation. The two results show that Vodafone is in a safe position since even for the more dire quick ratio, they have 99 cents worth of current assets to pay off their current debts.

Financial Information and Valuation

Income Statement

From figure 1 above, total revenue decreased by 6.24% in 2019 but increased by 3% in 2020. This drop in revenue was accompanied by a similar trend in gross profit which had decreased by 2.13% in 2019 but had increased by 5.82% in 2020. The revenue figures further support the operating expense figures, which had remained relatively constant in 2019 – only increasing by 0.07% – but had dropped by 43.45% in 2020. In 2019, Vodafone had posted a 6.91% drop in operating income, but this had increased by 120.58% in 2020. Pre-tax income had plunged by 167.38%% in 2019, and further continued to slump by 130.42% in 2020. Net income had dipped in both 2019, and 2020 posting drops of 428.82% and 88.93%; noteworthy, 2019’s fall was far more dramatic than that of 2020. Basic EPS was 0.09 in 2018, -0.29 in 2019, and -0.03 in 2020.

Balance Sheet

From figure 2, there was a dip in total assets in 2019 by 1.89%, but an increase occurred in 2020 by 17.71%. Current assets increased by 4.315 in 2019 but plunged by 13.485 in 2020. Current debt had dropped by 58.75% in 2019 but had risen by 107.03% in 2020. Long-term debt had increased by 47.94% in 2019 and increased further by 10.54% in 2020 (“Vodafone Balance Sheet”). 2020 was a bad year for the global economy, where most companies posted losses. However, although 2020 was not a stellar year for Vodafone, it seems to have been a better year than 2019. In 2019, the company had reported a drop in revenue, gross profit, increased operating expense, decreased operating income figures which had shown opposite patterns in 2020. On the balance sheet, total assets had dipped in 2019 but increased in 2020.

It is not exactly clear why Vodafone had a good year in 2020 during a raging pandemic, but the explanation could be that they were recovering from a bad year in 2019 caused by other reasons unrelated to COVID-19. Thus, when they corrected the internal problem, the pandemic could not have had a worse effect than their issue in 2019. Another likely explanation is that it was a good year for telecommunication companies since most people worked from home, creating demand for communication products. The prediction for 2021 results is increased income since the world is recovering from COVID-19.

Comparison with a Peer

It has been established that Vodafone had a good year in 2020 despite the pandemic. It would be interesting to compare the results with those of its peers. This section will compare Vodafone’s statements with those of American telecommunication giant AT&T. Report show that the US firm increased revenue by 6.11% in 2019 but dropped by 5.125% in 2020 (“30 Year Financial”). According to “Vodafone Income,” gross profit had risen by 6.26% in 2019 but plunged by 5.375 in 2020. Operating income, on the other hand, had increased by 12.515 in 2019 but dropped by 14.03% in 2020.

Although net income had plunged by 28.22% in 2019, it had slumped by 137.23% in 2020. In 2019, EPS was 1.90 but was -0.75 the following year (“30 Year Financial”). On the balance sheet, AT&T had reported a 6.48% increase in total current assets in 2019, but this had dipped by 5.03% in 2020. Total assets also had increased by 3.72% in 2019 but decreased by 4.7% in 2020 (“30 Year Financial”). There was an increase in total liabilities by 3.485 in 2019 but a dip by 0.92% in 2020. Total shareholders equity had only increased by 0.07% in 2019, but the same plunged by 12.24% in 2020 (“Vodafone Balance Sheet”). The company seems to have followed a different pattern from Vodafone.

In terms of ratios, AT&T’s ROE for 2020 was -3.10%, while the ROA was -0.96%. AT&T had a PB ratio of 1.27 and a PE ratio of 0.00 (“30 Year Financial”). For liquidity ratios, AT&T had a quick ratio of 0.82 and a current ratio of 0.82; Vodafone had better liquidity ratios than AT&T, meaning they’re in a better position to handle their short-term debt obligations. AT&T also had a debt-to-equity ratio of 1.1, which is eerily similar to that of Vodafone at 1.12 (“30 Year Financial”). From the above comparisons, it is clear that Vodafone having a good year in 2020 was not an industry-wide phenomenon but rather an exception. A lot of financial ratios do not make enough sense by themselves unless compared horizontally or against peers; from the results of comparing Vodafone’s results with those of AT&T, one can conclude that Vodafone is not strikingly different from its peers and is performing well.

Stock Valuation

Above, figure 3 shows a plot of Vodafone’s stock highs against time for one year. The graph shows an increase of the stock price up to a local high of 141 on September 6, 2020; the stock then corrects to a low in the region between 103 and 113 around November 6, 2020 (“Vodafone Group Historical”). From November, the stock has been rising to a high of 136 on December 10 (“Vodafone Group Historical”). Since then, the stock has been moving sideways with no notable positive or negative correlation if a line of best fit were to be drawn. Figure 4 above represents Vodafone stock prices adjusted close for a period of 1 year from April 2020 to April 2021. The histogram indicates that the price is not normally distributed. It shows that the price is skewed to the left on the lower side.

The asymmetrical distribution indicates that the stock is volatile. Historically, Vodafone seems to have had a better past and has all the signs of a struggling giant. For example, their shares peaked at about £403 at the turn of the millennium, although the spike did correct quickly, going back to the 140 range in 2 years (“Vodafone Group Historical”). The company’s stock price has been on a sideways movement for over a decade, although it did rise for some time peaking at £247 in 2014 when their profits were also increasing (“Vodafone Group Historical”). The pattern from 2017 is a downtrend which is discouraging for investors, but it seems to have bottomed.

Dividend Discount Model Valuation

Divided Discount Model (DDM) is a quantitative mechanism of valuing the stock of a company. The formula is:

V0 = DPS / (r – g)

Where:

• V₀ – Current fair value of a stock
• D₁ – The dividend payment a year from now
• r – The estimated cost of equity capital (usually calculated using CAPM)
• g – The constant growth rate of the company’s dividends for an infinite time

In this calculation, there have to be assumptions:

• EPS TTM = 0.077
• Dividends Per Share = 0.08
• Assumed Growth rate = GDP growth of UK economy = 1.9%
• Cost of Equity = 4.27%
• DPS = £0.08 x 1.9% = £0.0816
• V = £0.0816/ (4.27%-1.9%) = £34.43

The weighted average cost of capital is equal to the cost of equity with the assumption that Vodafone has 100% equity capital. The result above indicates that Vodafone group, currently trading at £135, is overpriced. Because the value is overpriced, this shows that financial advice regarding Vodafone stock is a sell. However, this metric alone is not all it would take to invest/divest in a company since many factors are usually considered.

Debt Free Cash Free Valuation

Vodafone DFCF = Market Cap + (Preferred Stock + Long-Term Debt & Capital Lease Obligation)

= £37.47 B + £64.07B

= £101.54 B

Debt Free Cash Free is a type of valuation that assumes that if a company were to be sold, the valuation of the company is the enterprise value, and the seller would take responsibility for all their debt and all their cash. DFCF valuation is similar to the enterprise value of a company. The assumptions for this valuation are that the company has no debt and no cash. The interpretation for the above value is that the market capitalization for Vodafone is £37.47B, but since DCFC valuation assumes that the company has no debt and no cash, these are added to the market cap to obtain the enterprise value.

Risks of Investing in Vodafone

The risks of investing in Vodafone arise from the global economy’s outlook as it continues to recover from the COVID-19 pandemic. It is becoming evident that the pandemic will change the world forever with the possibility of unrecoverable damage to the world economy. Vodafone is a global company that operates in many countries, including developing ones, many of which do not seem to have the pandemic under control. Vodafone may have some respite after the withdrawal of France’s Orange from tower business, leaving a wider market for them. The company is looking to list its Vantage Towers business and raise some money to offset piling debt. Investors should be cautious about investing in companies that are selling their segments to generate cash. This means that the concerned organization may have engaged in mindless expansionism that has misfired and is looking to correct its errors.

Conclusion

This paper has looked at Vodafone Group Plc, a publicly traded telecommunication company based in the UK. From the company’s profile, it is evident that they are a gigantic company with a global footprint. From the financial analysis, it is clear that the company has been struggling for the past decade. It seems like a classic case of legacy companies that expanded heavily but are now bloated.

Works Cited

“30 Year Financial Data of AT&T Inc.” Guru Focus, Web.

“Jio and Airtel Consolidating Market Share; Vodafone Idea Likely to Lose RMS. ” Business Today, 2020, Web.

“Vodafone.” Companies History, Web.

“Vodafone Group PE Ratio 2006-2020”. Macrotrends, Web.

“Vodafone Group Plc. News ” Reuters, Web.

“Vodafone Group Plc. Key Metrics” Reuters, Web.

“Vodafone Group Plc. Balance Sheet” Yahoo Finance, Web.

“Vodafone Group Plc. Income Statement” Yahoo Finance, Web.

“Vodafone Group Plc. Historical Data” Yahoo Finance, Web.

Introduction

International marketing refers to a method of promotion designed to capture global markets and exploit commercial prospects in other nations. Promotion strategy adopted by an organization depends on the features of the countries targeted by the company. International marketing entails all processes of promotion that include performance of market research, development of a campaign strategy, determination of the target group and analysis of sales results.

A significant facet of international marketing is the effects of differences in cultures, languages and other environmental conditions on a company’s products (The Times 100, 2012). These conditions affect how products appeal to different people in diverse regions.

Promotion environment consists of factors external to an organization. These external factors affect promotion strategies that organizations use. Organizations cannot control these factors.

However, companies can influence some of the factors to their advantage. Some of the external factors that have influence on companies’ promotion strategies include population, economic features and political processes (The Times 100, 2012). On the other hand, there exist factors that companies can control to improve their competitive advantages. These include technological prowess and competitive conditions among others. Globalization has forced companies to compete internationally.

Marketers have to ensure that they understand factors that affect the competitiveness of their companies in different countries. Therefore, they must scan the markets that they operate in and develop effective promotion strategies. This paper compares the effects of environmental factors on marketing strategies used by Vodafone in India and Kenya.

Company Background

Vodafone is a leading international brand worldwide. It is positioned as the eleventh largest telecommunications organization in the world and second in the European region. The company has its headquarters in the United Kingdom and operates in numerous countries (Celtnet Telecommunications Companies, 2012).

The company operates in different countries via its subsidiaries. In India, the company operated under the brands Vodafone India and Hutchison Essar. Currently, it operates as Vodafone Essar in India. Through the subsidiary, the company controls the telecommunications market in India. In Kenya, it operates under Safaricom as its subsidiary. Safaricom is the leading telecommunications company in Kenya (Krause, 2008).

It provides pre and post-paid services and sells different handsets. It offers high quality mobile services in Kenya. Moreover, it is a creative and successful advertiser and marketer (Celtnet Telecommunications Companies, 2012). The company has also created employment opportunities for Kenyans. It provides Kenyans with business opportunities through its mobile money transfer services.

Social Environment

Social environment in India and Kenya affects the promotion strategies that Vodafone uses. Social environment comprise conditions linked to groups of people in the society. It includes factors such as the population, behavior patterns, beliefs and practices.

A change in the social environment determines the marketing strategies that a company uses (Vitullo-Martin, 1997). A social environmental change has the potential to increase or reduce the size of a market. Notably, a change in the social environment directs consumers’ behavior and preferences.

Demographic environment is the magnitude, distribution and increase of segments of individuals with diverse characteristics. International marketers normally consider the behavior patterns of countries. They consider the age groups, poverty levels, cultures and household organizations. India has an extremely large population (Vitullo-Martin, 1997). Vodafone serves approximately 35 million people in India currently.

The total population of India is approximately 1.2 billion people (Kumar, 2010). This creates growth opportunities for the company. The marketing strategies that it uses in the country aim at increasing the customer base since there exists untapped market. It is predicted that the country’s population will increase to 2.6 billion by 2050. This further creates opportunity to increase business activities in India. The company uses aggressive advertisements and provides more value added services to capture untapped market.

However, in Kenya, the company uses a different promotion strategy. Kenya has a total population of about 40 million people. Safaricom has a customer base of about 5 million people. The company faces stiff competition from other service providers like Telcom Kenya and Airtel.

However, it is the leading telecommunications company in Kenya. The marketing strategies of the company in Kenya aim assisting the organization to maintain leadership in the market due to the low population and stiff competition. It engages in aggressive advertisements and price wars. Additionally, it offers value added services to different segments of the market.

The other demographic feature that Vodafone considers in the two countries is poverty. The two countries have high poverty levels. Many people in India and Kenya cannot afford some of the services that Vodafone offers.

However, India’s large population presents opportunities for growth despite the existence of high poverty levels. Vodafone provides low-cost handsets in India. Through the provision of low-cost handsets, the company increases its sales through massive distribution (Wang & Kishore, 2010). In contrast, the company targets towns and cities with its products in Kenya.

Poverty is highly widespread in the rural areas than in urban areas. Hence, the company targets people in urban centers who can afford different varieties of products. The products are highly differentiated to enable people of different poverty levels access the services that the company provides. Finally, the company markets itself through corporate social responsibilities in the two countries.

Cultural Environment

Cultural environment is the second social factor that marketers consider in international promotion (Vitullo-Martin, 1997). Cultural environment comprise conditions connected to how individuals live and act. It includes values and beliefs, traditions and attitudes. International marketers must establish significant features and movements in different countries that their organizations have business operations.

Cultural differences affect the nature of products that different groups in a society desire (Vitullo-Martin, 1997). Cultural environment in India and Kenya has influenced the marketing strategies that Vodafone employs in the two countries. India operates under the caste system of classification. Individuals in India are grouped into social classes. The caste system is rigid and encourages poverty. It has also resulted into cultural rigidity.

India can be categorized as a collectivist society. The low flexibility of culture in India results into resistance to economic growth. This affects the ability of Vodafone to increase market share and sales volume. The marketing practices that the company uses in India also try not to conflict with beliefs of different social classes in the country. Hence, the company’s promotion adverts, like Zoozoo, appeal to Indians.

Conversely, Kenya’s culture is flexible, and Kenyans adopt new ideas rapidly. Kenya can be categorized as an individualist society. The flexibility of Kenya’s culture matches with the speed of economic and technological growth. This boosts the rate of economic growth and attracts different international companies (Vitullo-Martin, 1997).

The flexibility of culture in Kenya has enabled Vodafone to develop effective marketing strategies. The company has used elements of Kenyan culture to develop marketing campaigns. In fact, the name Safaricom is derived from Kenya’s national language. Safaricom is derived from the word safari, which is Swahili.

Cultural diversity in the two countries has made Vodafone develop marketing adverts that use native languages. These adverts appeal to the citizens of the two countries. However, in development of the adverts, the company ensures that it does not offend customers. Hence, it has to understand the cultural beliefs and practices in Kenya and India (Brand Directory, 2011).

Economic and Competitive Environment

Economic environment comprise conditions connected to production of products and services and income levels (Vitullo-Martin, 1997). The economy relates to incomes, expenses and costs of business operations.

Demographic and cultural environments influence the volume and requirements of markets. Conversely, economic environment influences the ability of markets to purchase goods and services (Vitullo-Martin, 1997). Hence, high population growth rate does not necessarily translate into excellent market opportunities for businesses.

Markets must have adequate purchasing power for consumers’ needs to be satisfied. Economic conditions in a country affect the marketing strategies that companies use (Vitullo-Martin, 1997). Additionally, economic conditions in a country affect marketing strategies that companies use in other nations. For example, changes in production costs in the can affect the prices of telecommunication services in India. This then affects the marketing strategies that companies in India use.

India’s gross domestic product grew at a rate of approximately 7.1% in 2007 and 2008. However, unemployment level is high in the country. Many people cannot afford expensive services. Vodafone recognized this fact and decided to develop marketing strategies that target the poor. The company decided to distribute mobile phone handsets that cost $25 due to high unemployment and poverty levels.

The poor and the unemployed people in India can afford these low-cost handsets. The marketing strategies that Vodafone use in India rely on the high population (Wang & Kishore, 2010). Even though the purchasing power of Indians is low, the high population presents Vodafone with approximately 250 million consumers in the middle class bracket. Kenya also has high unemployment and poverty levels.

This affects the purchasing power of Kenyans. Vodafone employs product differentiation as its marketing strategy in Kenya. It also segments the Kenyan market through the provision of products that target different groups (Anderson, 2008). Hence, it sells products like the iPhone to rich people and Kabambe to relatively poor people. Kabambe is specially designed specifically for the Kenyan market.

Competition is the other economic factor that marketers consider in development of promotion strategies. Marketers must develop competitive strategies that can enable their organizations acquire large market share (Vitullo-Martin, 1997). Vodafone faces local and international competitors in India and Kenya.

Additionally, it is the leading telecommunications company in the two countries. The company uses almost similar promotion strategies to maintain leadership in the two markets. The company targets new and old customers. In addition, it continually introduces improved versions of old products in India and Kenya. The company also engages in price wars in India and Kenya (Wang & Kishore, 2010).

However, price wars are intense in Kenya due to the limited market. Furthermore, Vodafone achieves command in telecommunications market in India and Kenya through the establishment of niche markets (Anderson, 2008). In Kenya, it targets corporate organizations as a niche market. It then offers custom-made services to these organizations. Finally, the company creates market entry barriers through its promotion strategies in Kenya and India.

Technological Environment

Factors related to inventions and innovations that have an impact on development or improvement of products and services compose technological environment. Marketers must take technological viewpoint when they design promotion strategies and products (Vitullo-Martin, 1997).

Improvements in technology affect the ways through which Vodafone markets its products in India and Kenya. The company uses media in the two countries to market its products and services. In addition, it uses social sites in the internet to promote its activities in the two countries.

Many people in Kenya and India use social sites like Facebook and Twitter. Competition also makes the company improve constantly the technology that it uses in the two countries (UK essays, 2011). Hence, it has introduced other services like cloud computing to market itself. However, the two countries depend on technological supplies from other markets. Therefore, the use of technological advancements in the two countries in promotion depends on the pace of development in other countries.

Political Environment

The political environment comprises factors connected to governments’ activities and regulations that affect promotion strategies. Political environment is connected to both the social and economic environments. Social and economic factors like poverty and unemployment guide legislations designed to control companies’ promotion activities (Vitullo-Martin, 1997).

Government agencies implement laws formulated to control marketing activities that firms practice. Such legislations have affected marketing strategies that Vodafone uses in India and Kenya. In India, Telecom Regulatory Authority of India controls activities of telecommunications companies (Wang & Kishore, 2010).

In Kenya, the Communications Commission of Kenya controls business activities in telecommunications industry. Vodafone’s subsidiary in Kenya was once forced to avoid the creation of market entry barriers by the regulatory authority. The regulatory authorities in the two countries prohibit Vodafone from the use of deceptive promotion strategies.

Political stability and systems also affects the marketing strategies that companies use (Vitullo-Martin, 1997). India and Kenya operate under democratic political systems. Elections are held after every five years in the two countries (Wang & Kishore, 2010). However, sometimes, elections are held frequently in India. This affects business operations. Kenya experienced political instability in 2008, and this affected the operation of Vodafone’s subsidiary.

Institutional Environment

The institutional environment comprises companies concerned with the promotion of products and services of other organizations. These companies are promotion agencies, research firms, retailers and wholesalers. Vodafone uses some organizations to improve its position in Indian and Kenyan markets. These organizations assist Vodafone to increase the visibility of its products and services in the two markets. Vodafone Essar uses Ogilvy and Mather to develop adverts. Ogilvy and Mather is a South African advertisement and public relations firm.

The firm assisted Vodafone to develop the Zoozoo advert that has become popular in India. Over 30,000 people on Facebook in India like the Vodafone’s advert. In Kenya, the company uses several retailers to distribute its products (Brand Directory, 2011). The use of retailers has made the firm popular in the Kenyan market since the retailers are over a million in the country. The company also brands retailers’ premises to increase its visibility.

Through its M-Pesa product, the company has managed to popularize all the other products and services that it offers (Krause, 2008). It provides individuals with opportunities to own businesses through agency. The company expects retailers to promote and sell other products that the company offers. M-Pesa is a mobile money transfer service that the company developed and is currently used worldwide (Krause, 2008).

Conclusions

International marketing involves promotion of a company’s products and services globally. Political, economic, social, cultural and technological environments of different countries influence international marketing. Marketers must consider these factors when their organizations enter new markets.

They must also consider these factors when they develop promotion strategies that aim to enable their organizations maintain leadership in foreign markets. This paper compared the influence of social, cultural, economic, technological and political factors on promotion activities of Vodafone in India and Kenya.

Vodafone is a leading telecommunications company in the world. It is also the leading telecommunications company in the two countries. India is a fast developing third world country and has significant influence in the world economy. It has a high population and offers business opportunities for international organizations. Conversely, Kenya is a small and stable African country. It controls business activities in East and Central Africa.

High population has made Vodafone target poor people in India and Kenya. It also uses product and price differentiation in the two countries. Cultural and social factors like poverty have also influenced promotion strategies that the firm uses in the two countries. The company uses high technology and agencies in management of promotion activities in the two countries.

Regulatory authorities in the two countries also influence the promotion activities of Vodafone in India and Kenya. The use of advertisement and public relation agents is also a promotion strategy that the company uses in the two countries.

References

Anderson, J. (2008). Vodafone’s drive for differentiation in rural India. Global Telecoms Business. Web.

Brand Directory. (2011). Vodafone. Web.

Celtnet Telecommunications Companies. (2012). History of Vodafone. Web.

Krause, R. (2008). Vodafone targets emerging markets, Investor’s Business Daily. Web.

Kumar, A. (2010). Half of India’s population lives below the poverty line. Web.

The Times 100. (2012). Business Case Studies: International Marketing. Web.

Vitullo-Martin, J. (1997). The Global Marketing Environment. Web.

Wang, C. & Kishore, A. (2010). Comparative research on the marketing strategies of telecommunication industry in China and India. Web.

Introduction

International marketing is a form of marketing that is conducted across borders (Doole & Lowe, 2001, p. 25). This marketing cuts across national boundaries. The principles of marketing used in the home country can be applied in the international marketing with slight adjustments or improvements.

Therefore, international marketing aims at retaining markets in foreign countries besides expanding their markets to gain a competitive edge over their competitors.

In international marketing, it is imperative for multinational companies to put into consideration various environmental factors in executing their marketing strategies (Johansson, 2000, p. 21) because every country has different dynamics that must be observed to survive in the market by remaining competitive.

In this case, Vodafone Company, which is a multinational company, needs to consider these factors in the various countries it operates. The company is one of the fast-growing telecommunication companies. This paper delineates on two countries namely the UK and Egypt where this multinational company operates.

Overview of Factors

There are various environmental factors including culture, politics, economic situation, and government regulations that affect smooth operation of multinational businesses. The factors may affect the marketing management strategy of the company (Cateora & Ghauri, 1999, p. 6). Therefore, the strategy to be adopted to ensure that the company remains competitive in these two countries will be different.

According to Zhilin, Su and Fam (2012), it is important for those firms that manage international marketing to conform to or work as per the local business practices of the countries to gain social acceptance, also called legitimacy (p. 41). The claim is valid because the marketing strategies used face a different institutional environment that requires conformity to the local practices.

Furthermore, Magnus, Katsikeas, and Robson (2011) assert that international marketing allows exportation of products and services in other competitive markets thus helping to cut on expenses while maintaining flexibility of the company at the same time (p. 17).

Therefore, to achieve positive results, putting into consideration these environmental factors is important. Some similarities, as well as differences, will be experienced in the marketing management strategy for the two countries.

Similarities

The marketing management strategy in these two countries will have some similarities in the plan and objectives that the company wants to achieve. The managers in the countries are different though they are headed by one executive manager who overseas the functioning of the company in all countries.

Therefore, because the company is one, it has some set objectives and threshold. The goal that these two marketing managers aspire to achieve is to be competitive in the market place besides recording a high number of customer subscriptions. Even though they might employ different strategies in their plans, the major goal is one: being at the top of the market in their operations

Contrasts

Multinational companies work in different countries, which have different regulations and situations that require adjustment of strategies for the company to succeed in its operations (Krafft, 2007, p. 2). Every multinational company is aiming at expanding its markets.

This effort is the reason behind their opting to go beyond borders to sell their products and services. The fact that Vodafone is operating in different countries means that it has to employ or use different marketing strategies to remain competitive in the market. These differences in marketing strategies cut across almost all environmental factors like culture, for instance.

Culture

The two countries have different cultures. Majority of people and customers in Egypt are Muslims. Therefore, they have their way of communication and associating with one another. On the other hand, most people in the UK are Christians. The difference has to be factored in the marketing strategy to ensure that the needs of the two people are addressed adequately (Zhang, Song & Qu, 2011, p. 40).

For instance, the marketing strategy in Egypt should conform to the cultural dimensions of the Egyptian people. The language and values of the customers should be understood to enable employment of the right marketing strategy to communicate with customers in the best way that they understand.

Likewise, the same case is required in the UK. The people of the UK are English and Christians. Thus, the marketing management strategy should be in complacent with this fact.

Politics

Politics is a very important factor in marketing. Political stability is a key factor in determining the success of a marketing strategy. In these two scenarios, political stability of the UK is stable. Therefore, the stability will give the marketing manager an easy time to convey his/her message to the customers.

On the other hand, marketing in a politically unstable country is very challenging. For instance, during the political instability that was experienced in Egypt last year, it was difficult to market Vodafone products due to conflicts across the country.

Economic Situation

Economic situation is yet another important factor that marketing managers need to consider in marketing Vodafone services in the UK and Egypt. The two countries experience different economic situations. Therefore, this strategy must be different in the two countries. For instance, in the UK, where the economic situation is good, a lot of spending or funds can be channeled to marketing strategies to promote increased use of the Vodafone products.

However, in Egypt, the economic situation is not good. Therefore, the company will have to adapt those marketing strategies that can be accommodated within the available funds. It is also important for marketing managers to consider factors such as inflation in their countries of operation.

Government Regulations

Different countries are governed by different systems of government. These include democracy, dictatorship, and monarchy amongst others. Therefore, every government has its specific regulations that it uses to function or carry on with its activities. In international marketing, it is salient for marketing managers to look at these differences closely before formulating their plans.

Some of these regulations include taxations systems or requirements and foreign trade agreements among many other regulations (Cavusgil, 2012, p. 2012). In this case, the two countries have different governments and trade regulations laws.

Therefore, every country will have to institute marketing strategies that are in tandem with the government regulations. Vodafone Company in the UK will be required to submit its annual taxes as per the requirements of the government of the UK, as well as the company in Egypt.

Conclusion

In conclusion, it is very important for any multinational company to understand the requirements and regulations of a foreign country before deciding to invest in such countries. This understanding is paramount in reaching an amicable decision on whether to invest in the country or not, as revealed by the case of Vodafone Company in the UK and Egypt.

Reference List

Cateora, T., & Ghauri, P. (1999). International Marketing. London: McGraw-Hill Publishing Company, European Edition.

Cavusgil, S. (2012). Reflections on international marketing: Destructive Regeneration And multinational firms, Journal of the Academy of Marketing Science, 40(2):202-217.

Doole, I., & Lowe, R. (2001). International Marketing Strategy – Analysis, Development And Implementation. New York: Thomson Learning.

Johansson, J. (2000). Global Marketing – Foreign Entry, Local Marketing, and Global Management. New York: Johansson, International Edition.

Krafft, M. (2007). International Direct Marketing: Principles, Best Practices, Marketing. Facts, Science & Business Media, 1(1), 1-6.

Magnus, H., Katsikeas, C., & Robson, M. (2011). Export Promotion Strategy and Performance: The Role of International Experience. Journal of International Marketing, 19(4):17-39.

Zhang, C., Song, P., & Qu, Z. (2011). Competitive Action in the Diffusion of Internet Technology Products in Emerging Markets: Implications for Global Marketing Managers. Journal of International Marketing, 19(4), 40-60.

Zhilin, Y., Su, C., & Fam, K. (2012). Dealing with Institutional Distances in International Marketing Channels: Governance Strategies that Engender Legitimacy and Efficiency. Journal of Marketing, 76(3), 41-55.

Australian Telecommunications Company has continued to expand to address the demands of the market. It has remained a key player in the country’s economic growth, having generated close to $37 billion in 2008 and $98 billion revenue in 2009. The industry has over five hundred thousand employees across the country, working in various capacities (IBISWorld, 2011).

It has arguably been considered as a stimulant for employment in almost every sector of Australian economy. It has local and international companies which contribute to this tremendous global recognition. Among these are Optus and Vodafone which are considered as key players in the market.

This paper gives a critique of the performance of these companies based on their weaknesses and threats with reference to the entire telecommunications industry in Australia.

Vodafone is a UK-owned company and the leading telecommunications company around the world operating in more than twenty five countries including Australia. Vodafone Australia is the third largest Telecommunications Company in Australia, behind the giants Telstra and Optus.

The company runs a GSM mobile network which is approximated to cover 92% of Australian market (Vodafone, 2011). It also boasts of a Globalster satellite which enables it to cover the entire population. Even as the company continues to thrive in an ever-expanding economy and market, it has had its fair share of weaknesses and threats triggered by intertwined factors in the telecommunications market.

Vodafone Australia has experienced one of the worst network problems in the Australian market. Towards the end of 2010, the company registered pitiable quality in its calls, data speed, SMS reliability and voicemail services. It was faced with a class action suit for demonstrating incompetence in serving Australian people.

To maintain its business reputation, the company responded by blaming customers for using faulty software on their handsets and use of Smartphones (Vodafone, 2011). Although Vodafone CEO offered an apology, the interruption saw several customers terminate their contracts with the company to seek better services.

Additionally, expansion of the company has been achieved by direct regulation of its operations. Through mergers and acquisitions, the company has not realized organic growth. As a result, the company has a stable customer base at the expense of proper management of its subsidiaries (Vodafone, 2011).

With its operational structure centered in UK, Vodafone Australia has failed to address needs of the market allowing effective competition from smaller companies.

Moreover, Vodafone Australia continues to experience several threats as permitted by market trends and its ability to effectively serve Australians. Competition from major players and upcoming companies is seen as a major threat for the company.

Telstra which is the leading player in the market, previously possessed by the government runs most of the copper network, offering landline, broadband and mobile services (Vodafone, 2011). Immense global penetration of internet companies further threatens Vodafone’s ability to penetrate the market in future.

It is important to note that though saturated, the market still offers opportunities in terms of the aging population and changing needs for customers. Through strategic plans like simple phones and friendly pricing plans, the company stands a chance of favorably competing in market (IBISWorld, 2011).

On the other hand, Optus is ranked second in Australian telecommunications market and is owned by Singapore Telecommunications Company. Headquartered in Sydney, Optus has retained SingTel services and products like Boost Mobile, Virgin Mobile Australia, Uecomm and Alphawest (Optus, 2011).

In serving its customers, the company runs its own network infrastructure together with the use of other companies’ services like Telstra Wholesale. It has two channels of service delivery where it directly serves customers in the market and as a wholesale agent for smaller companies.

The company also provides internet services through dial-up and broadband services. It mainly serves the government, business owners and residents of Australia.

Like other players in the Australian telecommunications market, the company has weaknesses and continues to experience threats from a wide range of areas. Being owned by Singapore Telecommunications Company which has concentrated its operation in Australia, Optus is exposed to high competition from local players and other bigger players in the market.

In addition, Optus is faced with management issues manifested through labor strikes experienced before (Optus, 2011). This affects its reputation in maintaining a competitive advantage and customer base. Lastly, service delivery has not been up to date with customers complaining of low network connection speed and Cable TV services.

Even though the company is ranked second in Australian telecommunications industry, it faces stiff competition from Telstra and Vodafone among other key players and upcoming companies. It therefore suffices to mention competition as the company’s major threat.

Nevertheless, Optus prides on a number of opportunities in the telecommunications industry. With ever-changing technology, the company has a chance to expand its service and product delivery in order to address the needs of its young customers.

It also plans to increase its customer base through TV mobile services by the end of 2012 by use of FetchTV (Optus, 2011). Additionally, the company seeks to access government license to offer provisional satellite services that will cover Australian Broadband Network. This will win new customers across the country including remote regions which are not well covered by its competitors.

In general, a survey of Australian telecommunications market indicates various viewpoints with regard to the performance of companies like Vodafone and Optus. It is evident that the two companies have weaknesses which have continued to affect their performances. Nevertheless, there are countless opportunities to be utilized in maintaining competitive advantage.

References

IBISWorld. (2011). Mobile Telecommunications Carriers in Australia: Market Research Report. IBISWorld. Web.

Optus. (2011). Media Center. Optus. Web.

Vodafone. (2011). Vodafone Company. Vodafone. Web.

Vodafone Group Plc is a telecommunication company with most of its branches in Europe, Africa, United States of America, and the Middle East. In Australia, it is under Vodafone Hutchison Australia with a 50% share by Vodafone Group Plc and 50% share by Hutchison (Vodafone Group Plc, 2010).

This company now provides 3G coverage services to 94% of Australians; these services are affordable and accessible by consumers. However, Vodafone operates in an environment where competition is high; there are other companies such as Optus, which provide similar products and services. Therefore, Vodafone should improve in the way it delivers its services to customers.

Telecommunication industry operates in a challenging economic background and despite this, and the rising unemployment, the industry has continued to offer attractive services. This industry has remained resilient; however, it is not immune to changes in the economy because it renders services that are essential for work and social use.

Despite the ups and downs of this industry, companies such as Vodafone and Optus remain innovative in their products and services, and still make reasonable profits (Vodafone Group Plc, 2010).

Vodafone experiences slow growth in its voice and messaging market following competition from other companies such as Optus, and regulatory pressure. However, there are still opportunities for Vodafone in broadband markets and enterprising. This is because of the increasing demand for integrated solutions in Australia.

Vodafone offers varieties of devices, which include handsets mobile USB modems, as well as data cards. The handsets take care of customers with different tastes and preferences and offers handsets with different price points and designs. The devices launched by this company include Blackberry Storm touch screen and iPhone (Vodafone Group Plc, 2010).

Vodafone also offer mobile broadband, which enables customers to access the internet, the broadband has speeds of up to 2.0 Mbps uplink and 7.2 Mbps downlink. The company offers laptops of different models integrated with a 3G broadband and SIM cards. This is fit at the point of manufacture.

The USB modems together with their stick are designed to use “plug and play” software. Netbooks are also available in a small and lighter design; this includes Dell mini 9 netbook (Vodafone Group Plc, 2010). Customers who would like to use broadband fixed services are provided with DSL routers in wireless and wired designed.

Vodafone also offers voice services, which constitutes the largest part of the company’s revenue; this service ensures that customers make and receive calls from the same network and the other network. The fees paid for outgoing calls are at termination rate, which is regulated by the local regulators.

The coverage of this service has been expanded internationally; therefore, customers can make and receive calls from the other operator’s mobile networks when they are abroad. There are also messaging services, which allow customers to receive and send messages, video, music, sounds and pictures using their handsets (Vodafone Group Plc, 2010).

Vodafone has other services, which help customers to access data services such as television, games, music and Internet. This is made possible through laptops, mobile phones and use of broadband modems. Customers also enjoy fixed services such as fixed line voice, fixed broadband and office phone solutions.

All this services are delivered through a well established network infrastructure where mobile and fixed voice, as well as data and message services, are delivered to customers. Customers are linked to the core network through the access network, and it is through the core network that calls are routed, messages transferred, and data connections made (Vodafail.com, 2011).

The mobile networks use 2G networks which operate through ‘GSM’ networks, this allows messaging, voice and data services. Vodafone also utilizes ‘GPRS’ network for receiving and sending data using an IP network and access to services such as email and internet access.

This company also has GPRS advanced version, which offers speeds above 200 kilobits per second to their customers. Vodafone continues to expand its coverage in Australia and upgrade its transmission infrastructure; this is to ensure that all its customers receive quality services.

Vodafone distributes its devices through stores located in various points, in Australia, these stores are reviewed constantly to make sure that they meet market expectations (Vodafail.com, 2011). Products are sold through dealers and franchise, and their promotions are done through the Internet, which reduces promotion costs for Vodafone.

Vodafone still need to pursue growth in Australia, and its target is in the provision of mobile data, broadband as well as enterprise. Most businesses in Australia require integrated solutions, therefore, the demand for devices such as broadband is rising; this would boost its revenues because it is a customer base that needs regular use of data services (Vodafail.com, 2011).

When compared to other companies Vodafone is well established in core mobile services, it can use this advantage to broaden its market by offering fixed and mobile services and products to small and medium size businesses in Australia.

Vodafone has been losing its customers because of poor service delivery; this is a weak point that might have come to open up the company’s eye and make it realize the standard of service demanded by the Australian people.

The company should capitalize on customers’ complaints and come up with a strong and reliable service delivery system than that of its competitors, and this will bring back customers it had lost and retain as well as attract more from the other companies.

Vodafone is a foreign company based in Australia, this means that it could have problems with the local people adapting to its way of service delivery and adopting the products they offer. To solve this problem Vodafone has increased its strength by partnering with Hutchison Australia, a local operator in Australia.

This move has enabled Vodafone to market its products and services in the territory of Hutchison Australia and under the cooperation of the two companies’ development and marketing of products and services is easy (Vodafail.com, 2011).

The partnership has also helped Vodafone to gain loyalty in Australia and create additional franchise fees without any requirement for equity investment. This put Vodafone on the same level as the local companies such as Optus

Vodafone faces threats in Australia and these threats are initiated by intensifying competition from other companies offering similar products and services. In the recent times, Vodafone in Australia has faced problems with the network quality, quality of customer service, quality of products they sell and their distribution channels (Vodafone Group Plc, 2010).

These problems have reduced the rate at which Vodafone has been adding customers, lead to loss of customers to other competing companies offering the same products and services, and reduced its market size.

This is a massive threat for Vodafone because all it has worked for in Australia might go to drain if drastic measures are not taken to restore the quality of service and products offered to their customer or even improve them more (Vodafail.com, 2011). This might turn up to be costly for Vodafone because after improving its transmission infrastructure and quality of products, it has to re-advertise the products and services.

This might take up much of its funds set aside for innovation, and research and development; the company might lose its competitiveness in the Australian market without the aspect of research and development. Therefore, Vodafone should be careful in the way it handles the situation.

The messaging and data revenue for Vodafone is declining because of frequent changes in mobile phone technology; changes in technology delay adoption of new services because of availability of new mobile phones and new content services. Instability in this service affects the profit margin of Vodafone (Vodafone Group Plc, 2010).

Optus is a telecommunication company in Australia with large fleets on domestic satellites. This company offers services such as internet, radio, satellite based TV and voice mail and data services. Optus has D2 satellite which expands the existing satellite fleet; this helps Optus to provide communication services that do not much any company in Australia (Optus, 2008).

The company also provides broadcasting, broadband services as well as giving wholesale access to customers who deliver internet and subscription TV services to others. Optus have stayed in the telecommunication industry for more than twenty years, and despite its continuous success, the company still continues to invest in Australia to improve its services to customers.

Optus has also faced competition in the telecommunication industry especially in the mobile market; however, it still added 150,000 new mobile customers and increased its customers of smartphone and wireless broadband during the second quarter of the year 2010. All this is owed to differentiation of mobile offerings, strong network coverage and focus on customer experience.

The network coverage of Optus was enhanced to reach close to 97% of Australian population who use voice and data services (Optus, 2008). Optus still experienced a devastating problem caused by floods in Queensland and Cyclone Yasi, however, Optus network was strong enough to go through unaffected.

This shows that Optus has a strong network and people who work tirelessly to make sure that services are restored back to normal within a short time. This is as opposed to Vodafone which takes time to restore its services; this is an issue that has made them lose its customers to its competitors (Optus, 2010). This is a weakness Optus can capitalize on to defeat Vodafone.

Optus registered another increase in its customer in the quarter that followed; 4.8 million customers joined Optus with 1.2 million using broadband subscribers.

Optus has continued to differentiate its products in the market by launching different innovative services; these products include enhanced TV together with video application, which give Australians a free live streaming on their mobile phones (Optus, 2008). Optus has also partnered with TrueLocal.com.au, which allows the company to advertise its business online.

Optus has also shown its commitment by supporting corporate customers through launching Optus Cloud Solution. This service offers scalable and flexible approach of managing IT resources and at the same time reduces costs incurred in infrastructure (Optus, 2010).

Optus Cloud Solutions is a virtual computer with a storage capacity available on demand through a secure network connection. The company has also recorded a growth in on-net revenue from consumer and SMB fixed, and by the end of December 2010, on-net broadband customers increased to 946,000.

Optus receives a customer’s experience as a measure of their performance against their competitors, which can be measured in seven dimensions: customer service, price, billing, network, point of sale and reputation. They analyze qualitative and quantitative data from customers and other customers as well as from their expertise in these dimensions. Optus has also developed their own KPIs, which they use to measure their performance against their competitors.

When it comes to fixing performance problems as well as improving customer experience, Optus has initiated 40 significant projects with 20 already completed, and 20 are under construction (Optus, 2010).

According to Optus management understanding customers’ expectations and experience should be given a priority, and with close to 8 million customers, they have designed survey programs used to capture views and requirements and forward the information to the company.

This is done through regular interviews with customers and focus groups with the following aims: to find out whether their services are up to their customers expectations, their level of customer service when compared to their main competitors.

Optus acknowledges that customers cannot always have a satisfactory experience with the company, which results in a complaint, and since their objective is to fulfill customers’ experience, they have to handle the complaints efficiently and effectively. Optus focuses on business operations in handling of customer complaints.

They also consider the need to maintain productive relations with TIO and a feedback loop for continuous improvement of services (Optus, 2010). Their operations are directed to identifying the causes of complaints, managing it and ensure that the process has achieved their customer experience objectives. Complaints should be resolved at first contact with the customer, it not the complaint is referred to a team leader or TIO.

Fig1. Service delivery process for Optus Company

Vodafone has its own way of dealing with customers and handle their complaints. The company has received several complaints concerning the amount charged for services which was found to be incorrect by customers (Vodafail.com, 2011). These problems were blamed on unreliable Vodafone’s billing system; this system has had outages from December 2010 to January 2011.

After reporting the problem, the person concerned checked the bills and confirmed the mistakes and customers were refunded. However, the source of the problem was not investigated; therefore, it was not solved. This means that there is a possibility of the problem recurring and every now and then, and if the trend continues some customers will get tired and shift to a more service efficient company.

Sometimes customers experience dropping of calls and are charged a flag fall and every time they retrieve their calls they charged a minimum charge for it (Vodafail.com, 2011). This has resulted in high monthly bills and after monitoring the bandwidth it was realized that there was a higher usage than that of Huawei software.

This issue required that the billing services be investigated to ensure that the billing was done fairly, however, according to some customers Vodafone staff suggested to them to shift to a plan that was more expensive, and did not inform them about the new 24-month contracts (Vodafail.com, 2011).

There are other customers who signed up for three months free service, but according to others, the three months were not free because they were counted the fourth, fifth and sixth contract. This experience was not appealing to customers, and if such complaints are not well taken care of customers would not hesitate to move away from the company.

There are some cases where customers experience reception and are unable to make calls; this issue distress customers because they cannot make urgent and emergence calls and some cannot contact their families. Those who use such a service for doing business have to deal with the financial impacts associated with the technical problem (Vodafail.com, 2011).

When customers try to conduct the customer care using the given number they congest lines making it difficult for some of them to report their problem to the company.

Some Vodafone employees have not been able to solve reported problems with others denying the existence of network issues while others dismissed the problems as handset related; employees in the customer care department should report any problem that is beyond their capacity (Vodafail.com, 2011).

All this problems recurring and experienced by several customers show that Vodafone does not attend to customers complaints with the urgency, efficiency and effectiveness they deserve, and yet the problems can be easily solved through better communication between customers and company’s staff (Vodafail.com, 2011).

If the company realizes any technical problem that might disrupt their service to their customers, the first thing is to inform customers earlier through their handsets, they should handle the problem within the shortest time possible assuming that customers depend on their service alone. After the problem has been solved entirely, they should inform customers about returned normalcy as they try to monitor the systems.

Vodafone staffs seemed unaware of the steps to follow to solve a problem in a service system; therefore, each one feels not responsible for problems in the service system and again no one feels responsible for solving the problems (Vodafail.com, 2011).

The two companies should understand that effective service delivery requires constant interaction with customers; this will help them to understand the experiences of customers and their expectations, as well as their level of satisfaction.

After collecting information about customers’ experiences and expectations, these companies should be able to adjust the way they deliver their services, and services they offer to their customers so as to meet their expectations (Vodafail.com, 2011).

The companies should also understand that their customers cannot be satisfied all the time; therefore, they should expect complaints from time to time, and, in fact, these companies should treasure complaints because they give them a chance to improve on services they offer and how they offer them (Singtel, 2005).

Complaints also help them assess how efficient they are in offering their services, compared to other companies offering the same services.

The companies, therefore, should include feedback to customers in their service delivery systems any time they are handling a complaint. This is to ensure that the problem has been solved fully, and the customer is satisfied.

Fig, 2. The recommended blueprint

After the customer has reported a problem with the service he or she is receiving, the customer care should review the case to see if he or she have a capacity to solve the problem or offer assistance to the customer, if there is any technicality involved that is beyond his or her ability then the case should be forwarded to the team leader for solving problems or the TIO (Optus, 2008).

As this team work hard to solve the problem, they should maintain a feedback loop to ensure that the problem is solved effectively. Additionally, the customer should not be left in the dark regarding the problem because he or she feels the effect the most, constant feedback should be given to the customer to assure him or her that the problem is being taken care of, and the service will return to normalcy soon.

The companies should also realize that it is not only the customer to report anomalies in their service delivery, but also the technical team. Therefore, in case of a technical problem or a forecasted problem, the company should take an initiative of informing the customer before he or she notices any problem, this would help the customer plan for an alternative or use the service before it is disrupted (Hoffman, 2010).

This will reduce the inconveniences caused by the company and maintain customer relations. The customer should be informed of any interruptions of service prior to the actual interruption.

Reference List

Hoffman, D. (2010). Services Marketing: Concepts, Strategies and Cases. New York: Cengage Learning.

Optus. (2010). Australian Communications and Media Authority public inquiry: Reconnecting the Customer. Web.

Optus. (2008). Business. Web.

Singtel. (2005). News Release: Strongrevenue growth of 6% across Singapore and Australia. Web.

Vodafail.com. (2011). Vodafone’s situation: yesterday, today and tomorrow. Web.

Vodafone Group Plc. (2010). Annual Report For the year ended 31 March 2009. Web.

Executive Summary

The problem of long waiting lines is an issue of major concern to many companies operating in various sectors. Vodafone, a global telecommunications company, faces this problem, especially in relation to the provision of customer care services. The following report proposes a solution for the long waiting periods witnessed at Vodafone’s Berkshire branch. The problem arises when the customers experience a prolonged delay before they can access services.

The report proposes a multichannel single phase waiting line model as a way of resolving the problem. The model is enhanced by a mathematical formula, which can be used to manipulate the various elements in it. The proposed waiting line model and mathematical formula can be effectively used to reduce or eliminate the problem experienced at Vodafone’s Berkshire branch.

Vodafone Telecommunications Company

Vodafone is one of the leading global telecommunications companies in the world. It provides a wide range of services in the mobile communications industry. The company operates in more than 30 countries worldwide. It has entered into partnership with more than forty networks in different parts of the world (Vodafone Limited, 2014). The company has a customer base of approximately 360 million subscribers. The employees working for the organisation are more than 8000 (Vodafone Limited, 2014). The company has made significant investments in the industry. It is associated with innovativeness and the provision of award-winning customer care services.

Some of the products offered by Vodafone include mobile phones and telecommunications coverage (Vodafone Limited, 2014). In addition, the organisation hosts online shops from where customers can purchase these products. Consequently, many customers make calls to Vodafone service centres seeking some form of assistance or making enquiries about various products.

Problem

The problem of clients waiting in long queues arises either due to jammed traffic or as a result of inadequate customer care service assistants. As a telecommunications company, Vodafone faces challenges associated with these long queues in its networks. The management understands that rises in the volume of calls made to the customer care centres may take place any time.

Staffing to cater for anticipated seasonal changes proves difficult for the company. To make matters worse, unpredictable rises in the volume of customers may damage the reputation of the global organisation. The erratic changes may result from such factors as the introduction of new products and power outages. Severe weather conditions and staff shortage may also lead to increased call volumes and waiting time. Consequently, these factors impact on the ability of Vodafone to satisfy the needs of the callers. They also affect the company’s goal of effective cost management.

The current report addresses the problem of customers waiting in long queues either to buy products or to get services in one of Vodafone’s stores. The store is called Vodafone House and is located in Newbury Parish in the county of Berkshire, England. Improvements made in information communication technologies have eased the queuing problem to some extent. However, a lot needs to be done to eliminate or reduce the problem.

Scope of the Report

The report explores some of the various techniques used in addressing long waiting queues in different industries. Queuing theory and waiting line models are explored in relation to Vodafone’s Berkshire branch. The theory and the model are analysed with regards to their applicability in the telecommunications industry. To this end, their viability in Vodafone Company is reviewed.

There are various approaches that can be adopted to address the issue of long waiting lines in the telecommunications sector and other industries. One of them is the mathematical model, which is proposed in this report.

Definition of Concepts

Queuing System Defined

According to Gross and Harris (1974), the queuing system is made up of three major components. The first component includes the source population. In the context of this report, the element refers to the customers making calls to Vodafone service centre. The second component is service system. The system refers to call lines and customer service. The third element consists of customers who are exiting the system.

The queuing system at Vodafone’s Berkshire branch consists primarily of the waiting lines and the number of servers used to attend to the callers. As such, addressing the problem of the long lines begins with the analysis of the company’s queuing system.

Queuing Theory and the Waiting Line Problem

According to Kleinrock and Gail (1996), a waiting line problem arises under two conditions. The first is when clients are made to wait before their issues are dealt with. The delay can be brought about by a shortage in servicing facilities. In Vodafone, the problem arises when customers ‘overwhelm’ the servicing facilities (servers and operators) through increased call traffic.

The second condition leading to waiting line problems is realised when servicing facilities remain idle (Prabhu, 1997). Idle time can result from a low number of customers. It can also result from the nature of time spacing between customer arrival and the duration they have to wait before they are served (Prabhu, 1997). Both conditions mentioned above lead to a waiting line. In the first scenario, the queue is made up of clients waiting to be served. In the second case, the waiting line is brought about by facilities or personnel waiting to serve the customers. In Vodafone, the first condition is more apparent than the second one. Customer calls are put on hold as they wait to be served.

The waiting line problem involves altering the behaviour of arriving units, the service facilities, or both (Kleinrock & Gail, 1996). Effecting these changes requires the manipulation or control of such factors as order of service, arrival rates, and number of service facilities (Prabhu, 1997). The logic behind the manipulation of these elements involves striking a balance between the pertinent features entering the process in an efficient and economical manner.

Application of the waiting-line theory and the formulation of solutions for the problem rely on such features as the average length of waiting line and the standard time spent in the queue. Other features influencing the measure include the average service rate and the standard arrival rate. All the factors constitute the functions of input and output.

Queuing System Designs

There exists various queuing system designs that Vodafone can adopt to reduce the problem associated with long waiting lines. According to Render, Stair, and Hanna (2012), service systems are categorised based on the number of channels or servers. In addition, the number of phases that customers go through before they are served is considered when classifying system designs. Queuing system designs are also referred to as line structures.

The line structure constitutes the basic step in addressing the challenges that come with long waiting lines. The selection of a particular queuing system is informed by a number of factors. To some extent, the choice depends on the volume of customers to be served and the restrictions arising from sequential requirements. The requirements govern the order followed in providing services.

The queuing system design can take different forms. It can be single channel or single phase. In this case, customers access all the services they require from one service centre (Kleinrock & Gail, 1996). The other category is single channel multiphase system. Here, the clients are served from one access point (Prabhu, 1997). Multichannel single phase design involves numerous servers. Each of these servers is used to provide the customer with all the services they require (Prabhu, 1997).

Other designs include multichannel multiphase and mixed system. The former involves numerous servers that serve customers in stages (Prabhu, 1997). The second design combines a number of the other line structures to suit the needs of a particular organisation.

The various queuing design systems or line structures can be depicted as follows:

In light of these queuing line structures, management at Vodafone Berkshire requires to select the most appropriate model that will address the unique queuing problem of the company. The table below shows some of the common waiting line models that the company can choose from:

Table 1: Properties of specific waiting line models. Source: Prabhu (1997).

Proposed Solution to the Long Waiting Queues at Vodafone Berkshire

Proposed Queuing Model

Multi-channel single phase system is the model proposed to resolve the queuing problem at Vodafone Berkshire (see figure 2 below). The basic components of any queuing process include the rate of arrival, time taken to serve the customer, and the queue itself (Kleinrock & Gail, 1996). In the proposed model, the service rate is not tied to any specific distribution. However, the arrival rate assumes the Poisson distribution system (Render et al., 2012).

Factors Influencing the Queuing Problem at Vodafone Berkshire

The various attributes of the customer service centre determine the nature of the waiting line problem experienced by the company. The element of customer service at this branch justifies the queuing model proposed. The factors affecting the waiting problem include the queuing environment at the centre, which exhibits infinite calling population. In addition, the customer service centre has multiple channel facilities.

The other factor is rate of arrival as far as calls at the centre are concerned. The calls are largely unpredictable. The erratic nature can be described through Poisson distribution, which supports the proposed model (Brown et al., 2005; Whitt, 2005). Service time, which refers to the rate at which calls are processed at the service facility, exhibits exponential distribution. It is also unpredictable.

Other factors include the waiting time for calls made to the centre. The time is infinite and all the customers wait on a single queue. Clients who access the centre are served on a first-come first-served basis. All arriving events join the queue. None of them is prioritised (Hillier & Yu, 1981).

The Operating Method of the Proposed Queuing Model

The proposed model minimises and eliminates waiting with regards to arriving events. The method supports multiple service channels. When customers contact Vodafone Berkshire, the calls arrive at an average rate of λ. They follow Poisson’s probability distribution (Render et al., 2012).

On the other hand, service calls are different. They assume an average rate of μ calls per minute for each and every channel. Consequently, the arriving calls seek to be served from any of the service channels. Alternatively, each and every call is switched automatically to the open server. In the case where all channels are busy, the arriving calls may be denied access to the system. Since there is no ideal man-made system, calls that arrive when the system is blocked or full are cleared and considered as abandoned (Render et al., 2012).

According to Render et al. (2012), the following formula can be used to calculate the probability of the channels being busy:

Where:

• λ= the mean arrival rate.
• µ= the mean service rate for each channel.
• k = the number of channels.
• P_j= the probability that j of the k channels are busy for j = 1, 2,…,k.

Charnes, Cooper, Lewin, and Seiford (1995) advance the following formula in relation to the one above:

L =l/μ (1-P_k).

Where L= average number of events within the system.

P_k shows the probability that all channels are busy. On a percentage basis, the element indicates arriving calls that are blocked and abandoned (Charnes et al., 1995). In addition, the component indicates the average number of events in the system. The events are the same as the average number of channels being used (Render et al., 2012).

The two formulae above can be used to calculate the quantity of channels or servers that can be used to handle a given number of calls. The number of incoming calls at Vodafone Berkshire can be estimated. As a result, the management can provide the correct number of servers based on the proposed model. The service rate in the model can be computed using the formulae and adjustments made to facilitate efficient service delivery. Ultimately, the problem of long waiting lines at the centre can be minimised or eliminated.

The model proposed for Vodafone Telecommunications Company’s Berkshire branch is referred to as the mathematical approach. The proposed equations can be manipulated to address the various elements of the process. The findings made can be integrated into the physical facilities.

Economics of the Waiting Line Problem

The main challenge associate with any waiting line revolves around making trade-off decisions (Bard & Bejjani, 1991). The management has to take into consideration the added cost involved in the provision of improved services. The decisions involve the acquisition of additional communication facilities. The costs involved are weighed against the inherent expense of the clients waiting in the line. In most cases, the cost-trade off decision is straight forward.

In the case of Vodafone Berkshire, the costs incurred by customers when they hold calls as they wait to be served can be mitigated by using more channels. The costs can be defined in terms of dissatisfaction, forcing the clients to go to the competitors (Davis & Maggard, 1990). Vodafone can acquire more channels and servers, satisfying and retaining the customers in the process.

Figure 3 below illustrates the trade-off relationship that results from typical conditions of customer traffic:

When the service capacity is minimised, the costs associated with waiting line are maximised. Increasing the service capacity has the opposite effect. It reduces the number of clients that are kept waiting. It also reduces the time it takes to serve them. The overall effect is a decrease in waiting line costs (Davis & Maggard, 1990). The negative exponential curve represents variations in this function. The ideal optimum cost is achieved at the crossover point between the waiting and service capacity lines.

An analysis of figure 3 makes it apparent that the cost of services increases when firms try to raise their capacity. Managers at Vodafone Berkshire can vary the firm’s capacity by maintaining ‘standby’ personnel or other service facilities (Whitt, 2005). The standby channels and servers can be assigned to specific facilities.

Conclusion

The long waiting lines at Vodafone Berkshire are a major issue affecting both the company and its customers. Failure to address this problem can result losses for the organisation. For example, Vodafone may lose the customers to competitors. Clients develop loyalty based on how well they are handled. The proposed multichannel single phase system queuing model provides the ultimate line structure that can used to effectively serve the customers calling Vodafone Berkshire. The model, together with the mathematical approach, allows for the manipulation of various elements in the system.

Developments in communication technology can provide efficient solutions to the waiting line problem. As such, Vodafone should embrace these technologies to strengthen its position in the market. In the meantime, the system proposed in this report can be used to solve the waiting line problem.

References

Bard, J., & Bejjani, W. (1991). Designing telecommunications networks for the reseller market. Management Science, 37(9), 1125-1146. Web.

Brown, L., Gans, N., Mandelbaum, A., Sakov, A., Shen, H., Zeltyn, S., & Zhao, L. (2005). Statistical analysis of a telephone call centre: A queuing science perspective. Journal of the American Statistical Association, 100, 36-50. Web.

Charnes, A., Cooper, W., Lewin, A., & Seiford, L. (1995). Data envelopment analysis: Theory, methodology, and applications. Dordecht, Netherlands: Kluwer Academic Publishers. Web.

Davis, M., & Maggard, M. (1990). An analysis of customer satisfaction with waiting times in a two-stage service process. Journal of Operations Management, 9(3), 324-334. Web.

Gross, D., & Harris, C. (1974). Fundamentals of queuing theory. New York: Wiley. Web.

Hillier, F., & Yu, O. (1981). Queuing tables and graphs. New York: Elsevier Science Ltd. Web.

Kleinrock, L., & Gail, R. (1996). Queuing systems: Problems and solutions. New York: Wiley. Web.

Prabhu, N. (1997). Foundations of queuing theory. Dordecht, Netherlands: Kluwer Academic Publishers. Web.

Render, B., Stair, R., & Hanna, M. (2012). Quantitative analysis for management (11th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall. Web.

Vodafone Limited. (2014). Our company. Web.

Whitt, W. (2005). Engineering solution of a basic call-centre model. Management Science, 51(2), 221-235. Web.

Risks

With the expansion of globalization, many businesses have begun to consider the possibility of expanding. Vodafone, an initially British company, also is following such ideas and has decided to start operating in Brazil and India.

When expanding to India, the company is likely to face issues that deal with the foreign exchange rate fluctuation, as Great Britain and India have different currencies. Interaction with India’s bureaucratic government system can also turn into a critical issue because the company will have to adjust to it. Operating in a country with a poor population and poor security, Vodafone may be unable to achieve the expected profit. Poor transport infrastructure and child labor can also make it more difficult to conduct business operations. In Brazil, Vodafone can face financial issues because of the high cost of living and expensive currency. Recent corruption scandals and a poor transport system can prevent the company from reaching diverse populations. Low purchasing power will not allow the company to reach its potential (Beath, Fan, Frauscher, Jarvis, & Reis, 2008).

These risk analyses reveal cross-cultural factors as they consider all critical spheres, including culture, finances, infrastructure, customer behavior, economy, and politics. The emphasis is made on the differences in the framework of each sphere, while similarities are not likely to require any significant adjustment.

Recommended Plan

It would be better if Vodafone prepares for expanding not only through business alterations but also through cultural ones. This means that the human resource management team should develop a training program for employees to know how to act in the new environment and to interact with people around them so that their relations improve and the goal of attracting customers can be obtained.

Thus, it is vital to develop guidelines for professionals to understand how to operate in a class system. When interacting with customers and other shareholders, this information will ensure that no misunderstanding will occur and that business relations will not be spoiled, as there is a possibility to offend people from the upper classes by not knowing how to greet them appropriately, etc. In addition to that, by knowing diverse issues of the population, Vodafone will be able to develop the most beneficial marketing strategies and improve advertising, which will provide an opportunity to win competitive advantage and will affect its revenue positively. Thus, human resource managers should educate British employees regarding sophisticated communication patterns (Goodman, 2014).

Exit Strategy

If Vodafone fails to reach success in the new market, the company should exit it. Considering the fact that this organization is not a start-up and is already operating in many countries all over the world successfully, it seems to be advantageous if it transfers its products back to Great Britain in case they are not bought by the representatives of the general public. The company can also try to reconsider its target audience and offer some discounts. For example, both countries have a great gap between rich and poor people. Focusing on those who are rich and offering them some products that are advantageous for business purposes as well as rather prestigious, Vodafone can possibly sell a lot of them. Then the buildings owned by the organization should be sold to friendly buyers. The overall success of Vodafone worldwide is still likely to attract the attention of local businesses and make them willing to preserve the company’s legacy (Robbins, 2016).

References

Beath, A., Fan, Q., Frauscher, K., Jarvis, M., & Reis, J. G. (2008). The investment climate in Brazil, India, and South Africa: A comparison of approaches for sustaining economic growth in emerging economies. Washington, DC: World Bank.

Goodman, N. (2014). Six steps for successful expatriate training. Web.

Robbins, S. (2016). Exit strategies for your business.Entrepreneur. Web.

Introduction

Financial statements are reports of an organisation’s budgetary operations. These statements display the outcome of accounting exercises during a fiscal year. They display the income and financial position of an organisation. Financial statements are prepared to demonstrate profit and loss operations and to evaluate the monetary position and income status on specific dates (Alcouffe & Gibassier 2018). Budgetary explanations or financial statements report the aftereffects of exercises (Aderemi 2017). In this manner, they are called the authentic records of an organisation. As a result, the statements furnish entrepreneurs with the essential information for deciding how well their investments perform. These announcements are brief reports intended to condense budgetary exercises for particular periods (Alcouffe & Gibassier 2018). Investors and stakeholders can utilise financial statement examination to assess the past and current financial operations of their business, analyse an existing money related issues, and gauge future patterns in the firm’s budgetary position (Aderemi 2017).

This paper will analyse the financial statement, financial objectives, and how it satisfies personal objectives. Consequently, the paper will appraise the accountant’s role in achieving the financial goals. Armed with this analysis, the paper will use Vodafone Qatar as its case study. The financial statement of the telecommunication company will be assessed to ascertain its performance. As a result, Vodafone’s financial performance will be tested using accounting ratios and investment appraisal methods. Finally, the paper will discuss the firm’s performance and its share price.

Vodafone Qatar is a telecommunication service provider with regional branches in the Arab Emirate. The telecommunication corporation provides mobile services and landline communication channels to millions of subscribers. It offers mobile products and postpaid services, voice and information transfer, call conferencing, and mass SMS transfer. The organisation provides convenient Internet, broadband subscriptions, which support new service-based client recommendations, and income flow. Vodafone Qatar was established in 2008 with its head office in Doha Qatar. It important to note that Ooredoo telecommunication is a rival service provider in Qatar.

Vodafone’s capital structure is based on its products, shareholders percentage, and innovation. For example, the demand for wireless data is a major source of revenue generation. The firm’s goal and objectives stretch beyond its services. The organisation believes in genuine investment in corporate social responsibility as it affects financial, natural, and social value (Alcouffe & Gibassier 2018). Vodafone’s commitment includes child safety, women empowerment, and public service. Vodafone’s central goal is to help clients and groups to adjust and flourish as new patterns and innovation reshape the world. Based on these assumptions, the company provides valid accounting reports in accordance with full disclosure standards (Alcouffe & Gibassier 2018). As a result, the firm’s financial statement shows detailed accounts of its stewards.

Vodafone’s capital structure describes how it funds its operations and expenditures using different avenues of income. Thus, shareholders consider short-term and long-term debts during payments. Despite challenging monetary conditions and expanding job insecurity, telecommunication investments seem to be appealing. Although revenue generated from its services is expanding, there is a market drive for wireless data technology.

Importance of the Financial Statement

Evaluate Business Operations

Financial reports cannot be inspected in a vacuum; however, they are contrasted with past articulation to decide changes to the organisation’s operations. Authentic survey permits the proprietor to categorise its success in the right context. Therefore, comparing present and past events enables its management to survey what has enhanced or declined, distinguish issues or regions of quality or shortcoming, and decides why income or costs might not have changed as expected (Alcouffe & Gibassier 2018).

Create Objectives for Future Projections

Vodafone’s past and present financial reports create indicators for future projections. In the event that Vodafone Qatar shows 10 percent growth in profit, the management could utilise that figure as a benchmark for resource allocation.

Aid Staff Assessment

The monetary statement gives a target device to evaluate staff productivity. Entrepreneurs frequently compensate representatives for their commitments to expand income and revenue (Bebbington & Thomson 2013). Regardless of whether the organisation provides incentives for staff performance, changes to employee remuneration should be considered based on performance (Avakmovic & Avakumovic 2016). Thus, financial reports provide an indicator for wage increase, staff rewards, and compensation.

An indicator for Decision-Makers

Vodafone’s financial statement can be used to examine business operations. However, the ratio analysis is a complicated process. By extension, financial ratios need to be incorporated with numerous monetary proportions, including approaches that enhance similarity with a goal to comprehend conceivable components (Bebbington & Larrinaga 2014). There are two issues in utilising financial reports for business analysis. Ratio procedure is a challenge in performance evaluation. Consequently, the subjective alternative of financial ratios to evaluate the firm’s performance is another challenge (Bebbington & Thomson 2013). This comprehension is vital because a single ratio analysis may invalidate the firm’s evaluation. Therefore, ratio analysis provides a comprehensive method for cross-examination.

Importance of Financial Statement Analysis

Financial statement analysis is imperative for various reasons, which include the shareholding, operational decisions, credit expansion and investment decision.

Shareholding

Based on the assumptions that investors are proprietors of the organisation, they may have to take choices, whether to end that agreement or provide additional funding. As a result, financial analysis is imperative, as it gives important data to support the investor’s decision-making process (Bebbington & Larrinaga 2014).

Operational Decisions

The company’s management control activities and operations of each transaction. By extension, they require regular evaluation of operations to assess its status. Thus, money related examination is essential to the firm’s management.

Credit Expansion and Investment Decision

Lenders are the suppliers of credit cash flow to the company. Therefore, lending institutions take decisions based on the firm’s financial analysis (Bebbington & Thomson 2013). By implication, financial statement examination gives critical data for loan approval. Potential investors are individuals who have surplus cash flow to put resources into different investments (Bebbington & Larrinaga 2014). They are required to choose whether to contribute their capital in the organisation’s offer. The financial statement investigation is imperative since they gather valuable data to assist the decision-making process.

Financial Objectives of Vodafone Qatar

Vodafone’s financial plan is a set of objectives that are measured in monetary value. Revenue generation is as important as service quality. Therefore, the organisation seeks to be a leading name in the Qatar telecommunication market. As a result, the financial objectives are designed to improve its overall performance. The organisation’s financial objectives are based on four principles. Vodafone’s financial objective includes revenue maximisation, capital maximisation objective, value maximisation and “others” maximisation objectives (Caron & Fortin 2014).

Revenue Objectives

Revenue is a theory in monetary hypothesis (Bebbington & Thomson 2013). In line with the economic theory, profit minimization is an objective for a competing firm. Ooredoo telecommunication is a major competitor in Qatar. Thus, Vodafone’s management should create conditions that would strengthen its financial base. Under these conditions, revenue maximisation as profit becomes a source of dividend for shareholders (Bebbington & Thomson 2013). Consequently, the power of rivalry enforces revenue maximisation for a firm to survive. Since profit is the distinction amongst income and expenses, once income and expenses are distinguished the supposition of profit objective empowers expectations to be made on daily operations and investment transactions. Additionally, given recognisable profits, the methods of traditional optimization facilitate the decision-making process. The conduct of the firm can be displayed as though the firm was amplifying profit (Bebbington & Thomson 2013). It has customarily been contended that the goal of an organisation is to generate revenue; therefore, the aim of financial management is to reduce losses and increase profit.

Capital Maximisation Objective

Capital maximisation objective enhances the net value of the firm’s investment (Caron & Fortin 2014). The net value of an investment is the contrast between the past and present estimation of its profit and expenditures. A business transaction that has a positive net value generates revenue for the organisation (Caron & Fortin 2014). However, a business transaction that has a negative net value should be rejected. Therefore, management should adopt operations that generate positive net value. Capital maximisation is conceivable by settling on choices that generate income, which surpasses its costs (Varley 2014). Since income is the contrast amongst revenue and expenses, profit maximisation promotes capital maximisation. The detachment of possession of service and the expansion in rivalry has prompted the redefinition of profit maximisation of Vodafone Qatar. As stated earlier, the essential budgetary target of corporate finance is profit maximisation for shareholders.

Since investors get their investment returns through profits and dividends, investor’s income will increase by expanding the estimation of profits and dividends (Avakmovic & Avakumovic 2016). Investor’s capital maximisation objective states that management should increase the present estimation of future investments. The present estimation is characterised as the current value of future cash inflow at a discount rate. The firm’s discount rate considers revenues accessible from elective venture openings during one fiscal year. Capital minimization objective also consider the risk alternatives for business investments. In the event that additional risk is associated with future monetary profit, higher rebate rate is embraced (Varley 2014). Since an organisation is a coalition of gatherings, which includes proprietors, managers, workers, providers, clients, income expansion should be shared based on their proportions. Thus, capital maximisation objective is based on the firm’s growth, shareholders welfare, dividend payment, risk valuation, future payments, earnings per share, and stock value (Avakmovic & Avakumovic 2016).

Value Maximisation Objective

Value maximisation objectives describe the firm’s goal to expand its shareholder’s equity. Vodafone’s shares traded in the stock market represent shareholders’ value. Thus, the objective is to amplify the market value of its shares. Therefore, the share price represents the company’s performance index. By extension, the firm’s capital increases when its share value is maximised. Based on this analysis, Vodafone’s corporate strategy is to improve its financial objectives, which generate profit and income. Thus, the management seeks to increase its share value.

Others Maximisation Objectives

Vodafone’s “others” maximisation objectives include sales, growth, return on investment, and social objectives.

The interests of the organisation are enhanced by its sales, which come with growth and development. Consequently, the firm’s size, brand differentiation, and innovation are associated with sales maximisation objective. The company’s administrators look for targets that give them fulfilment, for example, wage compensation, professionalism, income status, and security (Avakmovic & Avakumovic 2016). However, Vodafone’s shareholders are worried about the stock market price, ROI, and profit maximisation.

These contrasting arrangements of goals are accommodated by focusing on the company’s growth, which brings higher pay rates for directors, income, and share price for investors. The key point of a business venture is to generate returns on investment (ROI). Estimating verifiable performance on investment requires an evaluation of the revenue earned by capital utilised. The rate of return is dictated by partitioning net benefit or salary by the capital utilised or investment made to accomplish that income (Robinson et al. 2015). ROI analysis gives a solid motivating force for effective resource allocation (Avakmovic & Avakumovic 2016). It encourages administrators to acquire resources that will generate a positive ROI. In choosing among business investment and capital projects, the ROI gives an appropriate measure for appraisal of income of every proposition (Robinson et al. 2015). Vodafone Qatar is an essential industry of the nation (Avakmovic & Avakumovic 2016). The company returns the benefits and rights by encouraging child safety, women empowerment, and corporate social responsibility (Varley 2014). This analysis reveals the firm’s desire to sustain its role in the telecommunication industry.

Financial and Personal Objective Appraisal

Financial objectives are goals created by the business arm of an organisation. They contain numerical estimates with timelines for execution (Varley 2014). The financial objectives are based on four cardinal points. The firm considers cost minimization, cash flow, return on capital, and shareholders’ returns. Financial objectives improve coordination, efficiency, decision-making tool, evaluation tool, and benchmark for success. Based on this premise, Vodafone’s financial objectives align with other sectors of the organisation. Finance, human resources, operational factors, corporate objective, resource allocation, products, and services influence the financial objective (Caron & Fortin 2014). Consequently, suppliers, market factors, and competitors influence the firm’s objectives externally. It satisfies my personal objectives because it aligns with investments frameworks. Business sustainability relies on an effective management system. The system is controlled by resource allocation, which is the goal of the financial objective (Caron & Fortin 2014).

Roles played by Accountants to Achieve Financial Objectives

The responsibility of accountants in guaranteeing financial disclosure cannot be over emphasised. Accountants regularly put their jobs on the line in defending the honesty of financial reports (Caron & Fortin 2014). Vodafone’s auditors and accountants are responsible for the budgetary data created by the organisation. In summary, accountants in organisations subsequently have the errand of safeguarding financial reports where the numbers and figures are created. By extension, the accountants in Vodafone Qatar contribute to its financial objectives. Like their partners in tax assessment or evaluation, accountants in business assume critical part that improves stability and performance (Caron & Fortin 2014).

A skilled accountant in business is a priceless resource for the organisation (Weribgelegha & Egoro 2017). They employ an inquisitive personality to their work established on the premise of their insight into the organisation’s financial operation (Solovida & Latan 2017). Utilising their capacities and understanding of the firm’s financial environment, accountants make testing inquiries (Robinson et al. 2015). Their preparation in bookkeeping empowers them to embrace a businesslike and objective approach in analysing issues. It is an advantage in Vodafone where accountants align with international reporting standards. Accountants in business help with corporate procedure, advice, and enable organisations to diminish costs, enhance their best line, and alleviate risk (Cho & Kang 2017).

As board executives, accountants in business represent the interest of the proprietors of the organisation. Their parts conventionally include, administering the association, for example, endorsing yearly spending plans and bookkeeping to investors and deciding administration’s remuneration (Endrikat, Hartmann & Schreck 2017). Accountants have oversight over all issues identifying with the organisation’s monetary status (Cho & Kang 2017). This incorporates making and driving the fundamental bearing of the business to examine, create, and convey financial information. As auditors, accountants provide affirmation to the administration that the risk plan and management process are efficient and effective (Maas, Schaltegger & Crutzen 2016).

Defenders of Public Interest

One of the financial objectives of the organisation is to protect its shareholder’s interest. A description of the multifaceted roles of accountants includes the obligation to defend the firm’s investors (Weribgelegha & Egoro 2017). As a discipline that has been offered a position in the public arena, an accountant manages an extensive variety of issues that has public interest (Robinson et al. 2015). Based on this premise, accountants should be confident and trusted to create public value. By implication, accountants could lose their integrity as defenders of public interest if they operate on personal interest (Cho & Kang 2017). Thus, public confidence in the financial statements prepared by accountants forms the core principle of the firm’s financial objective (Endrikat, Hartmann & Schreck 2017).

Components of the Financial Statement

The data found in the financial reports of a company are the basis of business accounting. Financial specialists and loan institutions assess the organisation’s level of monetary strength using information from the financial statement (Weribgelegha & Egoro 2017). The components of the financial statement include the balance sheet, cash flow, and income statement. Information found in the financial statement is utilised to ascertain essential budgetary ratios that give understanding into how the organisation’s funds are being overseen and issues to address (Endrikat, Hartmann & Schreck 2017). Financial statements are reports of an organisation’s budgetary operations. These statements display the outcome of accounting exercises during a fiscal year. They display the income and financial position of an organisation. Financial statements are prepared to demonstrate profit and loss operations and to evaluate the monetary position and income status on specific dates. The balance sheet, cash inflow and income statement provides valid information concerning the firm’s performance and profit margin (Weribgelegha & Egoro 2017). Therefore, an investor can decide when to invest in the stock market.

The Balance Sheet

The balance sheet displays information concerning the firm’s worth (Endrikat, Hartmann & Schreck 2017). The statement reveals aggregates of the organisation’s profit, liabilities, and investors’ value.

Mathematically, the balance sheet = Liabilities + equity. The balance sheet shows all transactions approved by the organisation. As a result, the organisation can acquire assets using its equity or liability. The liability comes as loans and receivables. Rather than indicating single operations, the balance sheet displays at the end of one fiscal year. An increase or loss in asset is recorded in the firm’s balance sheet.

The Income Statement

An organisation’s income statement displays the level of income earned and the costs identified with generating that income. An organisation identifies net income from item or services and after that deducts anticipated costs from discounts (Endrikat, Hartmann & Schreck 2017). Expenses incurred during sales are subtracted from net income to achieve the gross benefit. Consequently, the firm’s operating expenditures are subtracted from the gross benefit, which gives the operating income (Robinson et al. 2015).

The Cash Flow Statement

The cash flow statement displays money inflow and outflow throughout the accounting period. This monetary statement features the change in net income of the organisation (Endrikat, Hartmann & Schreck 2017). By extension, the profit and loss values are records in the statement of profit and loss, which is the income statement.

Vodafone’s Ratio Analysis

Ratio analysis is a technique, which can be utilised to assess the record of business (Varley 2014). It is an imperative part of the examination because it gives quick and simple analysis. The analysis assists investors to decide if the association is accomplishing its objectives and likewise assesses how its rivals are performing.

Profitability Ratios

Vodafone’s profit margin can be assessed by utilising the profitability analysis. The firm’s profitability ratio proposes the ability to deliver positive returns for shareholders and investors, which can be appropriated as profit and some portion can be held for future tasks (Oliver, Vety & Brooks 2016). By extension, profitability ratios are the result of effective and successful strategy management. For an association’s growth and expansion, profit and efficiency are vital indicators (Endrikat, Hartmann & Schreck 2017). In this manner, Vodafone’s profitability ratio can be surveyed utilising its gross margin, operating margin, asset turnover, Return on Capital Employed (ROCE), Return on Shareholders’ Funds (ROSF), gross profit margin, operating margin, and net profit margin.

Vodafone’ Qatar Gross Profit Ratio

Gross profit margin is processed by taking net benefit. It reveals the level of gross profit achieved by the organisation on net transactions (Endrikat, Hartmann & Schreck 2017). Higher gross margin prompts productivity and growth (Journeault 2016). For this analysis, we will use the financial statements for four consecutive years. The fiscal report for 2014, 2015, 2016, and 2016 will be adopted for the performance evaluation.

Mathematically, Vodafone’s gross profit margin = Income – cost of income/income.

It is found that Vodafone’s gross profit margin dropped significantly, which indicates poor growth index. The profit margin in 2014 was 55.99%. However, it started dropping in 2015, 2016, and 2017. Gross profit margins for these years were 54.05, 29.41, and 37.32. In synopsis, high cost of operations influenced its crumbling gross profit ratio. The association should lessen its operating costs to have higher gross net revenue.

Operating Profit Ratio

The operating profit is the generated income for a fiscal year it describes the company’s profit after settling the production costs. On the average, the firm’s operating cash flow is 498 million.

Mathematically, the operating profit margin = Operating income/Total revenue

Vodafone operating profit for 2014, 2015, 2016, and 2017 were -11.12, 43.9, -19.57, and -11.81. The value demonstrates dwindling income before tax deductions and interest. This approach is more suitable than the gross ratio as the outcomes are precise.

Vodafone’s Net Profit Margin

The most utilised estimation for evaluating an association’s financial strength is the net profit margin. Net profit margin represents the value after subtracting the firm’s expenses and operating costs (Endrikat, Hartmann & Schreck 2017). The cost of operations includes all immediate and aberrant consumption gathered during the financial year (Robinson et al. 2015).

Vodafone’s Net profit margin = (Net profit /net sales) x 100

The organisation’s net profit margin was -12.41 in 2014, -9.36 in 2015, -21.97 in 2016, and -13.08 in 2017. Vodafone net margin indicates poor financial strength. The values indicate poor financial returns for four consecutive years. This has affected the dividend rate for shareholders and investors.

Liquidity Ratios

These proportions are acquired from the balance sheet report and tell how effectively Vodafone can pay its obligation. Financial institutions such as banks and capital fundraisers are especially keen on these proportions. A company’s liquidity proportion portrays its capacity to meet every money related commitment (Endrikat, Hartmann & Schreck 2017). By suggestion, Vodafone’s liquidity proportion exhibits the administration’s ability to finance its working expense. Along these lines, liquidity is central to the proficient running of a business (Weribgelegha & Egoro 2017). In the event that the association has poor liquidity, it is hard to repay loans over short and long-term investment. An association’s liquidity ratio can be surveyed utilising its debt to equity ratio, financial ratio, solvency ratio, quick ratio, and current ratios (Endrikat, Hartmann & Schreck 2017).

Vodafone Qatar Current Ratio

A company’s current ratio is the value between the present assets and current current liabilities. The firm’s assets and liabilities are essential components of the operating capital. A positive current ratio indicates the company’s willingness to meet all financial obligations during the current fiscal year.

Mathematically current ratio = Current asset/ current liabilities

Based on the analysis, Vodafone’s current ratio was 0.56 in 2014, 0.44 in 2015, 0.51 in 2016, and 0.66 in 2017. The value demonstrates a progressive increase from 2014 to 2017. It infers that Vodafone Qatar has a higher number of liabilities to pay than its income.

Quick Ratio

A vital indicator of a firm’s financial strength is their ability to meet short-term obligations. The company’s capacity to turn liquid assets into cash for short-term obligation or stress represents its quick ratio (Weribgelegha & Egoro 2017). Assets that are not changed into liquid cash are deducted from the association’s assets and liabilities.

Vodafone’s quick ratio = (Cash + marketable securities + receivables – inventories) / current liabilities

Based on the calculations, Vodafone’s quick ratio was in 2014 0.54, 0.41in 2015, 0.14 in 2016, and 0.64 in 2017. As earlier stated, the firm’s may not meet short-term obligations because of its fixed inventories. It explains Vodafone dwindling operating revenue.

Vodafone’s Degree of Financial Ratio

The capacity to use fixed assets and equity measures a firm’s liquidity ratio. It represents the degree of change in preferred equity. Based on the analysis, the financial ratio was 1.3 in 2014, 1.34 in 2015, 1.42 in 2016, and 1.41 in 2017.

Vodafone’s Efficiency Ratios

An association’s efficiency proportion is assessed using a standard estimation. The efficiency ratio is an income over the normal estimation (Endrikat, Hartmann & Schreck 2017). Therefore, the association makes a standard estimation for its investment and operations. Accounts receivable turnover, return on investment, operating expense ratio, total asset turnover, accounts payable turnover, inventory turnover, and average collection period are components of the efficiency ratio.

Receivable Turnover

Receivable turnover is the time allowed to account holders to meet their obligations. By implication, it measures the efficiency of asset utilisation. The receivable turnover can be computed by separating net operations from aggregate assets.

Mathematically receivable turnover = Total net sales/Average receivables

Vodafone’s receivable turnover was 7.61 in 2014, 8.91 in 2015, and 5.77 in 2017. The report indicates efficient asset utilisation. In 2017, Vodafone can collect its receivables in in 6 days.

Vodafone Asset Turnover Margin

Asset turnover margin measures a firm’s capacity to utilise its assets to generate money for the organisation (Endrikat, Hartmann & Schreck 2017). The firm’s asset turnover was 0.25 in 2014, 0.3 in 2015, 0.29 in 2016, and 0.3 in 2017. It was found that the asset turnover margin is 0.31 (Table 1).

Investment Appraisal

The agency and feedback theories suggest that performance affects a firm’s liquidity (Bebbington & Larrinaga 2014). There are numerous hypothetical reasons in accepting that liquidity influences the execution of the organisation. A firm’s securities provide liquidity and voting to mention a few. Based on these assumptions, Vodafone’s performance has not been encouraging in the last four years. The liquidity outlook has been deteriorating, which shows poor management and fierce competition. Investment strategies are built on the company’s stock value. Thus, the firm’s P/E ratio describes the firm’s growth rate. The P/E ratio when compared with S&P 500 is 20.8%. Vodafone’s stock share price was 9.30 QAR as at 20 April 2018. The firm’s share earnings data showed poor performance. The basic earnings per share were -0.29 in 2014, -0.26 in 2015, -0.55 in 2016, and -032 in 2017 (Vodafone Qatar QSC 2018). Consequently, the dividends per share were 0.17 in 2014 and 0.21 in 2015. The firm did not declare dividends in 2016 and 2017. The firm’s stock value can describe its performance.

Recommendations

Vodafone Qatar has been operating in the telecommunication industry for years. However, the firm’s financial strength has not been convincing. The firm’s balance sheet for four consecutive years shows poor performance. It indicates ineffective coordination and aggressive marketing. Although the organisation has a fierce business environment with competitors, brand differentiation should be a competitive advantage (Kock 2015). The organisation met its obligations in short-term investments. However, a new strategy for generating profit and returns of investment should be considered. This low financial status has affected the firm’s investment drive. Investors are not confident in the stock and may not encourage new lines to invest in Vodafone’s stock. Therefore, past performance may not give valid information about its future yield.

Vodafone’s forward strategy is a business procedure that includes a vertical integration whereby business exercises are extended to incorporate control of the immediate circulation or supply of the firm’s product and services. The Forward strategy is an operational procedure executed by an organisation that needs to expand control over its providers, producers, or wholesalers, so it can build its market control (O’Dwyer & Unerman 2016). For a forward strategy to be effective, an organisation needs should acquire or merge an alliance with small firms in the telecommunication industry (Kock 2015). Based on the analysis, it is recommended that investors hold their decision to invest in the organisation. In summary, the firm’s business operations need ideas and innovation. The market capitalization drive should be strengthened with effective strategies.

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Appendix

Table 1: Growth Profitability and Financial Ratios for Vodafone Qatar QSC. (Vodafone Qatar QSC 2018).

The terminology used to describe Vodafone’s growth strategy is acquisition. Acquisition is the best strategy for growth to use in the delicate telecommunication industry. This strategy allows the acquiring company, enough leverage to have a controlling stake in the target company. This strategy allows the company to take advantage of the economies of scale as synergies take shape. These advantages are:

• Possession of skilled workers: The telecommunication industry in some countries faces a lack of enough qualified staff as the education systems do not prepare the students well in how to deal with challenges that come with being associated in the industry. The cost of training both in terms of time and expenditure is greatly reduced (Banzhaf, 2005).
• Increased buying power: Vodafone’s ability to purchase equipment manpower and other resources necessary for its operations is greatly enhanced when it acquires companies, as it now has more fixed assets that t can use as collateral when seeking new funding.
• Larger customer base: Vodafone is able to benefit from an increase in customers as it just acquires the former customers of the target company. This reduces the cost it was to incur in marketing if it was to start a new company.
• Possession of Technology: This strategy allows Vodafone to inherit already existing infrastructure. The only task that the company has to undertake is upgrading in cases where it is needed. This eliminates all costs of purchasing equipments which is a very expensive undertaking (Banzhaf, 2005).
• Direct Cash Flow: Since the acquired company has an already existing network, Vodafone does not have to wait for the network to be adopted by new consumers and this means that as long as the existing subscribers continue to use the network, revenue to the company is still being attained.
• Joint Overheads: Expenses within the two joint companies is shared this allows the company to invest in future initiatives. This allows the company to grow rapidly in a short time span.

Measures carried out by Vodafone in integrating companies in which Vodafone owns a controlling interest is by carrying out of branding initiatives which will address the existing company as a challenger of the national operator. Rebranding all the companies under the Vodafone program initiative, the company took steps by integrating the various cultures within the different countries in which it operates. All these are done through marketing and branding development (Banzhaf, 2005).This program was implemented through media in terms of office memos, internet and emails.

A principal is conceived and strictly followed that embodies the new culture that they are currently adopting. These are the ten business principles. Rotation programs are initiated whereby probable managers are exposed to all activities across all countries in which Vodafone has a presence. All the integration activities are conducted with the principal that the acquired company assumes autonomy and is independent. The company instills the core values of the parent company within the staff and this is replicated in all the countries Vodafone has companies. A new governance structure and an operating structure are put in place to replace the existing one. All these are done to enhance efficiency in both decision making and speed at which tasks are done within the company.

References

Banzhaf, J. (2005). Vodafone: Out of Many One. New York: ESSEC Business School.

Mergers and acquisitions refer to the corporate strategies to finance and manage a business entity by buying or combining two or more separate entities to grow without having to create one from the scratch. This paper looks at the mergers and acquisitions between Vodafone, Air Touch communications, and the Mannesmann group of companies.

Nature of the industry

It’s a cellular industry that dominates the European telecommunications market and they deal in a wide range of transmission of information through phone to phone, broadband media, cable systems, and data communications whereby these companies have been competitors.

Economic and financial rationale

Vodafone and Mannesmann had varying determinations of the value where Vodafone AirTouch valued Mannesmann at $138 billion while Mannesmann claimed that it was worth $350billion. The cellular industry was generally growing rapidly and in 1998 it had global revenue of above US $ 1 trillion which was 5% of the world GDP. The average revenue of the merger activities reached its peak in 1999 with 20-25% of the total revenue.

German corporate governance

It makes hostile mergers difficult to execute. It dictated that the board be divided into supervisory that would oversee the management and have the powers to appoint and dismiss board members. The management on the other hand would be charged with the responsibility of running the company. Voting restrictions in articles of association of the Mannesmann also deterred voting in excess of 5% which the German rules also adopted whenever decisions of merges, consolidations and spin-offs were to be made.

Roles of the hostile take-over bid

This is the takeover that’s done against the wishes of the board of directors by the acquirer giving attractive prices to lure the shareholders into accepting the offer against the wishes of the management. This destroys the company cultures as said by the chancellor and that it results in the borderless telephony markets.

Strategic and economic rationale for Mannesmanns acquisition of orange

Orange was the third largest telephone company in UK with a market share of 18% and 17.45% interests in Connect Austria and 45.5% in orange communications of South Africa. Mannesmann was willing to pay $6.4 in cash and 0.0965 in shares and this valued orange at with $31billion which was a premium of 17%. As a result Mannesmann share prices dropped from $154.1 to $141.3 which was a 8% drop. Hence it means that Mannesmann had overpaid Orange.

The Mannesmann decision to refuse being acquired by Vodafone AirTouch was unbelievable since it has been promised to be paid $232 per share by Vodafone which was a 20%premium. The CEO claimed that they were worth $350 a share and yet they were willing to issue the 117 million shares at $157.8 per share to fund their acquisition of Orange as at December 17. If I were a shareholder of Mannesmann I would press for AirTouch – Mannesmann – Orange merger that would increase the sales to $13 billion and operations in 25 countries and 42 million equity subscribers as opposed to Mannesmann- Orange merger that garnered $5, 76 sales volumes operating in only 7 countries with14 million subscribers.

The market values at 17 December

The market values at the December 17 was 117 million shares of $157.8per share in Mannesmann Company

Average exchange rate =1pd = 1.5789 euros

Revenue synergy- 50 + 155 + 469 +656 = 1330 * 1.5789 =2099.937

Cost synergy-80 + 200 + 500 + 656 = 1436 * 1.5789 =2267.3004

The UK equities returns were 7.7% (1919-1993) and 6.8% in 1970-1990. This may affect the managers’ decisions that they should be keener in mergers and acquisitions to reduce the unnecessary costs since competition has become tight as compared to earlier periods when the market was less sensitive to competition.

The hurdles which the Vodafone AirTouch is facing are to try convincing Esser, the CEO of Mannesmann to accept the merger offer by trying to demonstrate the importance of the merger. Gent, the CEO of Vodafone AirTouch should use the shareholders by convincing them to vote against Esser and allow the merger to take place for their own benefit hence the shareholders are going to be Gents major supporters. The managing group including Esser is not going to support Esser in the take over bid

Gent was so much involved in realization of the merger so that a better financial position is created by capitalizing on the new opportunities to obtain important synergies. Revenues would also be enhanced, cost savings would be attained and savings in the capital expenditures would be realized.

On the other hand Esser is fighting against the offer on the grounds that the merger is quite inadequate and added that Mannesmann had superior strategies and products than Vodafone AirTouch which did not own even one fixed operation line.

Some of the roles of hostile takeovers include reduction of costs of transport, improving technology and avoiding competition through monopolies creation. Also help in forming synergies by reducing fixed costs and also increases revenue. Companies would also be able to reap the economies of scale while reducing taxation

In the absence of hostile takeover bids, acquirers may friendly acquire the targeted company by engaging in mutual negotiations with the management. Mergers can also be undertaken where two relatively equal companies combine together.

The German corporate governance differ from that of the Anglo-Saxon in that the later encourages the managing team to increase the shareholders wealth by giving them stocks while the former believes that the entire stakeholders are responsible for increasing shareholder wealth and not the management only.

Conclusion

The mergers and acquisition by the bidders should not be done in a hurry but managers should study the economic conditions in the concerned industry and make decisions in respect to their expansion needs. Some viable prospects may be attained by expanding from within.

Reference

Semi Kedi (2003). Vodafone Air Touch’s Bid for Mannesmann.