Assessing Vodacom Tanzania Limited

Due to globalization and its own factors investment has been made easy. This is because many countries modified their political view towards business environment. Many governments encourage investor to come to their respected countries to do business. Likewise companies will not only invest in international country but also buy potential customer business in the sponsor country.

Emergence of Vodacom Tanzania Limited

The company was created in the past due 1999 as a subsidiary of Vodacom South Africa and it completed GSM infrastructure in 14th August 2000 and announced start of functions the next day. Vodacom is a jv between Vodacom group which has majority show of 65% and Tanzania shareholders, that are Planetel communication Limited and Capsian Building Limited sharing the rest of equity. The business became the most significant mobile operator through the year of launch and with up-to-date information it is still the best mobile communication operator in Tanzania. []

Ownership

As it has been mentioned above that Vodacom Tanzania is a subsidiary of Vodacom South Africa and Vodacom group being almost all shareholder with about 65% shares. The home shareholders are Planetel communication Limited and Capsian Construction limited who has the others of stocks. A collaborative alliance has been designed by Vodacom to help the company achieve its objective and better customer support. Examples of stakeholders are

Azania Loan company[]

Government

Customer

NB: The stakeholders mentioned above are not the one ones who are involved with Vodacom Tanzania operations.

Vodacom competitors

It has been 10 years since Vodacom began working in Tanzania but its dominance is still discover, yet it was not the first mobile operator in Tanzania. With favors of Tigo initially known as Mobitel and TTCL operating as landline operator respectively, still Vodacom could penetrate the marketplace. Other competitors

Zain Tanzania

Zantel

Market share

Growth was much strong in the year 2008 for the mobile operating companies nevertheless the overall total fell marginally by 0. 1%. Vodacom continued to enjoy the main role it founded right from the start with over 40% of the marketplace share. The below graph show the "cake" distributed by mobile communication providers.

Since its inception Vodacom has been leading the marketplace with reasonable margin over its opponents. Nevertheless Vodacom's competition are still maintaining pace as we've seen many of them are growing speedily for instance Zantel and the dominate of formerly Celtel to Zain. The strategy of these two companies has revamp competition in Tanzania mobile communication operators with unprecedented financing. [3]

Industry evaluation - SWOT Analysis

Although telecommunication industry is not extremely tapped both mainland and island Tanzania and Zanzibar respectively research demonstrates some industries are growing so is the technology. The fixed range sector which TTCL has been the primary operator since the season 2000, the mobile operator is significantly growing rapidly in the past ten years. With six companies working two more are expected to join the competition hence high competition. [4]

SWOT Analysis

Strength

Foreign ownership

Expert from South Africa

Weakness

Unpredictable strategies

Tanzania investors offering shares

Opportunity

Market share

Technology

Infrastructure

East African configuration

Threats

New companies entrants

Government procedures and regulation (TCRA)

Tight competition

East African configuration

Table 1. 1

Summary

Strength

As it's been mentioned throughout this assignment the foreign possession the company is being operated on. There are several shares held by Vodacom group located in South Africa only a few shares are being held by local Tanzania buyers. So the international ownership is what is dominating the operations of the Vodacom Company with 65% talk about and rests participate in the local buyers. Vodacom Tanzania is the next company in Africa, to go to 3G High-speed downlink Packet gain access to (HSDPA).

Another strength that the company is relishing is experts from South Africa the delivery host to Vodacom. This also shows about the culture of the company in the sense of experiencing good working process compare to the coordinator country. For instance the handling director Romeo Kumalo who is a Southern African bringing South African experience and culture to Tanzania.

Weaknesses

Yet the business is having weaknesses that are still pressuring the performance. Unpredictable strategies that counter the aims of the business, for case the recent marketing strategies "cheka time". The strategy has a appealing future but still the certainty of total success would rely upon competitors' counter-top strategies strength. In addition the strategies might not just work at all scheduled bad market forecasting i. e. not knowing future effects of for example economic. [5]

Tanzania investor advertising shares

Another intimidating weakness that may halt Vodacom activities is the announcement local shareholders seeking a way out. This move would impede Vodacom Company to sustain its long lasted market share. The investors have already approached the Tanzania communication regulatory power. Different shareholders wouldn't bring bring about short-run. As per the TCRA plans that for licensing to be given for telecommunication one shareholder must have Tanzania originality.

Opportunity

Vodacom Tanzania has been the market leader since its inception in Tanzania. This is an opportunity that should be retained by any means by Vodacom Tanzania. The distance is huge to be covered by Vodacom's competitors in a nutshell run basis. The competitive edge that that company is enjoying came into being having good strategies.

The opportunity has been further understood when the government of Tanzania made a decision to become a member of the east African settings. The laws of doing business in your community have been revised to encourage free market movements and also factor freedom.

Vodacom was main companies to come quickly to Tanzania beside Tigo that was primarily known as Excitement. Still Vodacom was able to surpass Tigo activities and be the leader, because of high technology and advanced infrastructure. For instance the 3G High-speed downlink Packet access (HSDPA) has helped the company to better its services and able retain its leading role. [6]

Vodacom Company has had the opportunity to create good infrastructure that is offering the business a step a check out the competitors. Federal government was required to intervene on companies' infrastructure setup due environment damage and debated healthy issues. Because of this involvement those companies who got already setup their infrastructure were better off unlike company like Zantel who have been legally required to collaborate with Vodacom infrastructure for a few period of time. Hence the treatment also helped Vodacom Tanzania to earn from the cooperation arrangement made between your two companies.

Threats

Vodacom Tanzania is facing a huge danger from the introduction of new companies such as Sasatel which just lately became a member of the industry. Similarly the company also offers internet service at an inexpensive and sensible price compare to Vodacom Tanzania. The coming of new companies would mean new competitive strategies release.

The Company is getting serious downsides from government's involvement of regulations and regulation through Tanzania communication regulatory expert (TCRA), for example the stoppage of setting up infrastructure due environments condition, the intensive of the job was shorten as a result.

Competition is increasingly growing especially from Zain after the takeover. This is providing Vodacom Tanzania a no snooze period but strategizing. Still the federal government must intervene if Vodacom somewhat practice unfair competition as result.

As much as east African configuration is undoubtedly an opportunity on the other side its menace to Vodacom Tanzania since mobile companies from community can freely get into the country and compete.

Events that impact industry structure

Competitors' move

Vodacom is the market head so her move is ever influential to the industry whether it be either negative or positive move. The more robust companies can contain the effect on the industry and push the less powerful companies to check out the way they didn't intend to follow. The competitors move rest much on the rates strategy and marketing strategies. If Vodacom Tanzania will try to change it's costing strategies the impact would be believed even to those market follower, the same appears to the market strategies.

Government

The government also can change the framework of the industry from the insurance policies it imposes to the companies. For example new entries to the industry are required to have at least one local shareholder. Any change of legislation then adjustment would be produced by the whole industry. Similarly industry can be evolved when the federal government chooses to privatize a few of its states resources e. g.

TTCL that was a government property.

Changes in economics

Recently there was a global economic problems which shook the business activities worldwide, but although economic downtown did not have a huge impact in Tanzania companies were safeguarding there interest. Despite assurance from the government that the country economy was not associated with international financial system still the most severe crippled in, making multinational companies close their operations. [7]

Shifting of customer preference

The predictability of consumer choice towards communication is unclear. Customers have a tendency to change their likings style wise. That is when there is certainly mass liking of new product or service making them adjust to the particular mass is onto at that particular moment. Hence chances of Vodacom Tanzania's customer shifting to other mobile operator are significant high.

Technology developments

A big potential risk to Vodacom is the advantages of Fibre-optic. Communication would be made easier when there's a fully operation of the job. Consumer like speedy and successful means communication which is fibre-optic is focused on. The risk to Vodacom Tanzania originates from not using their service but using internet as cheap method of communication in the foreseeable future.

Rate of market growth

This factor would not change communication industry in Tanzania, because the industry is having a very steady promising progress due to increase in inhabitants. The industry also is still in growing level yet in maturity stage that may we might think otherwise.

Collaborative strategies

When a company decides to invest in collaborative arrangements then the industry may have positive look because the company would be adding value to the city in different perspective.

NB: The seventh point is university student view somewhat than written academic theory.

Vodacom Strategy and Value creation

Vodacom Tanzania is known for its differention strategies. Companies that go because of this kind of strategies tend to have unique product and service. Within the other hand their customers perceive those goods to be sufficient compare to rivals' goods or service. The uniqueness of the Vodacom Tanzania mobile service is what's making them to ask for more to hide for the extra value that is added. Value is established by Vodacom Tanzania when the clients can have the ability to parallel associate with company strategy hence any either negativity or positives opinions would relate to them.

Marketing strategies

The company is applying its differention strategies through well prepared marketing strategies that assist in creating value and keeping the good reputation. The marketing blueprints established by Vodacom Tanzania are creating value to the business since company is still the leading on the market despite adapting differention strategies which seem to possess highest prices when modified. The uniqueness of these marketing strategies is exactly what gives the company better way to perform in the strategy (differention).

Pricing strategy

Vodacom show conditions their strategy through price the offer to customer and the service they add. The company offer different prices to the client the purchase price prices include low income earners and high income earners. The speed of which Vodacom charges its customer is what varies to other rivals who have removed for low priced strategy. Just lately Vodacom Tanzania has created something called "Cheka time", which let low income customer to cover the service at very cheapest price. This plan is being employed by the other mobile providers and it has proven successfully, but just lately the costing strategy has been falling in recognition, making the right for Vodacom Tanzania to reinstate the strategy position on the market.

Value Chain

A well designed and supervised value chain will absolutely determine the competitiveness of the business in question in this case Vodacom Tanzania. Value string assist managers affiliate their reference, knowledge and skills of the employees about the firm. These activities help the company to lessen cost or better up differentiation. Two aspects that are related but uniquely different are

Configuration

Vodacom as Multinational business seem to be a tremendous choice to find their value activities. This is because Multinational enterprise boosts their competitiveness by exploiting the untapped market in this case Tanzania. Vodacom Tanzania possessed made a good choice since our overall economy was undertaking in the right path due to the adjustment favorably of the next factors.

Economic

Political

Legal, and

Cultural

Factors that impact configuration in the worthiness chain with regards to Vodacom Tanzania operations

Cost factors

The different in salary, employee efficiency, inflation rate and federal regulation is what creates disparity in development cost in one country to some other. Success has been attained by Vodacom Tanzania by firmly taking advantage the cost factors and inspecting Tanzania environment. [8]

Business environment

Vodacom Tanzania has in a position to dominate the market with good settings on where to locate their businesses. Production cost by itself cannot determine the positioning of the business enterprise decision. When Vodacom arrived to the country, in those days, the business environment was conducive compare to now where companies are limited to with a great deal of limitations.

Clusters effects

Value creation is a lot affected also with this factor; an industry can be afflicted whenever there are no clusters on the market. Hence the company that has dominated the marketplace can monopolize the complete market. This isn't the truth for Tanzania communication industry where we've different companies.

Logistics

Vodacom does a great deal of product copy and also expert's ones. That is making logistics in Vodacom Tanzania important also. For value string to reach your goals the control of logistics should be achieved in well-organized manner. Vodacom Tanzania does logistics with Vodacom South Africa by stamping Vouchers and transporting them into the country.

Economic of scale

The Reduction of unit cost which really is a consequence of producing high volume of product or widening the service to other location is what's characterized as economic of size. For Vodacom Tanzania to be able utilize this factor utmost, the necessity to pass on to other location should be high in order to reduce cost for his or her service as one unit.

Buyers needs

The construction of service that Vodacom Tanzania has "structurized" is unquestionably what's making the business prosper. The customer needs are accepted in the first palm without lagging behind. The Vodacom can know the needs of its customer via profound research.

Coordination

Arguably, Vodacom Tanzania has a good coordination with Vodacom South Africa as the headquarter where the majority of the advanced universal tactical decision are made. The Company resources that add value and increase company's competitive advantage come from South Africa. Locally professionals organize things that relate to the sponsor country. Like configuration, coordination has some factors own its own that impact value string.

Core competences

Vodacom Tanzania central competence is the strategy that has been put in place. The various ion strategy has been working so well for the decade of operation. This has led to Vodacom leading the marketing to the long period with no sign of making the led slide. Moreover, the fast adoption of new technology is what is supporting Vodacom Tanzania establishing its operation basis.

Operation obstacles

Multi national enterprises always find hard to determine themselves further globally. This situation should seem to have equal effect on Vodacom Tanzania but no, Vodacom Evaluation and selection of where to operate seem to acquire been done well. This is because the company has managed to work in the country without stumbling blocks.

National culture

Globalization of the company's value string, such as promotion and advertising were able to be changed by Vodacom Tanzania in order to get many customers without interfering with their culture hence reaching the objectives.

Learning effects

This identifies the cost cutting down when learning is carried out. That is an essential requirement companies have a tendency to bring best reasonable practices from their company so that failing is never experienced. We've seen this from Vodacom Tanzania bring expert of their country, an example is the managing director Romeo Kumalo from South Africa also other important departments that require expert from the foundation company. [9]

Conclusion

We have observed throughout the assignment where in fact the company originated and the ever important ownership. Vodacom Tanzania has been owned by Vodacom Band of company but also local shareholders have their part to experiment with.

We have the neighborhood shareholders in the company also because the law and regulation state that for a overseas mobile company to operate in the country it will have at least one local shareholder. Were also seeing the marketplace share the business is enjoying from its inception, a reasonable margin is owned by Vodacom Tanzania.

We contain the industry analysis and its own good and bad aspect towards Vodacom Tanzania internally and externally. Vodacom Tanzania strategies have been reviewed and its benefits or value creation towards the business. The duty has explained incidents that can transform industry composition and lastly I possess looked at factors that impact configuration value string with regards to Vodacom Tanzania.

Recommendation

Even though there are many things that Vodacom Tanzania can cheer about still a lot of adjustment have to be made. The success that Vodacom has achieved shouldn't blind company to see the future.

The company by this time around should concentrate on local expert involvement. Since its inception Vodacom Tanzania has been having the international managing director who has been making the tactical decision. This concept should be regarded for company with an equal show of decision making. The areas that needs to be viewed are

Bringing producing machines in to the country to slice travelling cost.

Exploit the villages market

Basing much on the neighborhood culture that the company is operating

Reference and Bibliography

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