Global Business Context Vodafone

June 20, 2018 Business

A disadvantage is that the government controls the wages that workers receive. This means consumers cannot afford luxury goods and services, for example a mobile phone. A mobile phone in a mixed economy would usually be taken for granted. Countries that operate in a planned economy include Russia, Bulgaria and Romania. In a market economy the government ensures that the countries financial supply is stable. The government’s role is limited within this economy. They provide legislation in order to protect both businesses and consumers. Providing legislation means no business or organisation can restrict competition.

The prices of goods and services are determined by supply and demand. In a mixed economy there is a combination of both planned and market economies. The UK, USA and China are part of a mixed economy. Within this market structure the government contributes and controls some resources and the market controls the rest. Market economies benefit from technological innovation in many ways, as do the businesses and organisations that provide technological innovation. Market economies have ‘sophisticated users who want and expect new functions from their mobiles’ (Times 100, Ed. 14. p. 161).

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This means that companies such as Vodafone will need to try and meet their consumer expectations to stay competitive. Vodafone states that their business model is “market orientated and customer-focused. It researches customer needs and desires and produces products and services to meet those needs. ” The benefits that Vodafone are providing customers with include •Network coverage for calls and data across almost 100% of the population •A wide range of handsets and airtime plans to suit every type of customer and use •Access to messages, email, the Internet and the sharing of images, videos and music through mobile phones. (Times 100, Ed. 14. p. 163) By doing this Vodafone is keeping in-line with rival businesses such as O2, Orange and T-Mobile. A product extension includes adding new products to features in this case, mobile phones. The extension will keep the interest of existing customers and attract new customers. Consumers within a market economy can afford luxury goods, as the government’s role is limited. Vodafone could use product extension on their existing products in order to maximise their sales revenue. For example selling a headset with a mobile phone.

This can increase demand which contributes to economic growth and development. The effect on consumers has also been positive as having a landline or mobile phone allows families to stay in contact with each other as many are separated due to employment in central locations. The M-PESA system was set-up to provide consumers with a safe way to transfer money which would potentially allow small businesses to grow. By providing this system Vodafone and their partnership company Safaricom has; “ •Helped small businesses become more financially secure Provided a safe way for wage earners to send money back home to their families •Solved the problems of carrying around large amounts of cash ” (Times 100, Ed. 14. p. 164) Vodafone has helped more people to access and transfer money. This has vastly improved the economic growth and development of Kenya as people can now take advantage of employment opportunities which may be available. Overall improving the standards of living in Kenya. Bibliography •The Times Newspaper Limited and MBA Publishing Ltd 2009, Vodafone Using technology to improve economies, Available at:


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