B. Macroeconomic and Industry Analysis
Macroeconomics is the study of the behaviour of the economy as a whole based on key indicators to perceive the health of the economy. These indicators include national output, inflation and unemployment (Heakal, 2011).
The Vodacom Group Limited 2013 Annual Report stated that in 2012, Vodacom appointed the Economics Information Services to assess and document the broader social and economic contribution that the company has made to South Africa between 2006 and 2011. The purpose of this evaluation was to retrospectively measure Vodacom South Africa’s impact and contribution to the economy as an operator supporting economic transformation, an employer and a corporate citizen. The research was completed during …show more content…
Overall, the company has been continuously rated higher than its competitors in the telecommunication sector and have also managed to reduce their main competitive threat from MTN.
According to BusinessDictionary.com (2014), industry analysis is a market assessment tool designed to provide a business with an idea of the complexity of a particular industry. It involves reviewing the economic, political and market factors that influence the way the industry develops.
Vodacom is one of South Africa’s four licensed mobile operators. It faces rigorous competition from MTN, Cell C and 8ta, a subsidiary of Telkom. It was reported that in 2011, Vodacom responded to the competition by increasing promotional activities and focusing on adding value to their service delivery rather than focusing only on price comparisons to competitor services. Due to efficient strategies, Vodacom managed to increase data revenue for that financial year by 35.5% and their contract customers by 14%. Vodacom is also diversifying into other product ranges such as mobile money and music downloads (Vodacom, …show more content…
This is an advantage to Vodacom. There are certain licensing conditions that have to be fulfilled by any new competitor to enter the industry. These lead to the increased expenditure for any company, having a negative impact on the initial cash flow. Furthermore, already established firms such as Vodacom have positive cash flows. Local and international competitors would have to enter the market and compete with negative cash flows, a devaluing Rand (with capital expenditure in foreign currency and their revenue in Rands) as well as increasing local prices for site rentals and other costs. Any new operator will have to invest up to R8 billion and their return on investment may take a long time to be forthcoming (Mbendi,
Macroeconomics is the study of the behaviour of the economy as a whole based on key indicators to perceive the health of the economy. These indicators include national output, inflation and unemployment (Heakal, 2011).
The Vodacom Group Limited 2013 Annual Report stated that in 2012, Vodacom appointed the Economics Information Services to assess and document the broader social and economic contribution that the company has made to South Africa between 2006 and 2011. The purpose of this evaluation was to retrospectively measure Vodacom South Africa’s impact and contribution to the economy as an operator supporting economic transformation, an employer and a corporate citizen. The research was completed during …show more content…
Overall, the company has been continuously rated higher than its competitors in the telecommunication sector and have also managed to reduce their main competitive threat from MTN.
According to BusinessDictionary.com (2014), industry analysis is a market assessment tool designed to provide a business with an idea of the complexity of a particular industry. It involves reviewing the economic, political and market factors that influence the way the industry develops.
Vodacom is one of South Africa’s four licensed mobile operators. It faces rigorous competition from MTN, Cell C and 8ta, a subsidiary of Telkom. It was reported that in 2011, Vodacom responded to the competition by increasing promotional activities and focusing on adding value to their service delivery rather than focusing only on price comparisons to competitor services. Due to efficient strategies, Vodacom managed to increase data revenue for that financial year by 35.5% and their contract customers by 14%. Vodacom is also diversifying into other product ranges such as mobile money and music downloads (Vodacom, …show more content…
This is an advantage to Vodacom. There are certain licensing conditions that have to be fulfilled by any new competitor to enter the industry. These lead to the increased expenditure for any company, having a negative impact on the initial cash flow. Furthermore, already established firms such as Vodacom have positive cash flows. Local and international competitors would have to enter the market and compete with negative cash flows, a devaluing Rand (with capital expenditure in foreign currency and their revenue in Rands) as well as increasing local prices for site rentals and other costs. Any new operator will have to invest up to R8 billion and their return on investment may take a long time to be forthcoming (Mbendi,