External Environment affect all the business, Vodafone is the one of the billion companies that influenced by it. Next, I would like to analysis the external environment, from the political environment, the economic environment, the socio-cultural environment, the technological environment, the legal environment and the ethical & environmental environment. The Political Environment Vodafone had done many activities related to political environment, which works with government, legislator, regulator and other political bodies. For that, Vodafone established public political principle to deal with policies.
For some special countries, like North Korea and Cuba, cell phones were not allow to sell and use. Because of that, it is very difficult for telecom companies like Vodafone to entry these countries. To solve this problem, the only thing for Vodafone to do is to create a pressure group and to lobby the government in order to influence government thinking and behavior. In Bangladesh, Vodafone planed to purchase 30 percent stake in mobile operator AKTEL. The outcome is successful because of "there is no legal barrier" said by BTRC chairman. There was no obstacle to Vodafone buying stake in AKTEL.
This case tells us low political factors can help companies do business. (Independent-bangladesh. com, 2008) Anyway, political environment is able change the way people make decision. The Economic Environment In the beginning of 2008, the whole world was under the shallow of global financial crisis, almost every company was affected by it, no matter whether your companies are big or small. Vodafone was not an exception. Like the case happened in India last year, Vodafone delayed the 3G spectrum auction because the global financial crisis.
Here Vodafone works with the joint venture company Essar group. To be specific, as the plan said, Vodafone planed to deliver their 3G technology to India last year. However, since the financial crisis, Bank start to worry whether to give the loan to this investment. Although the India Finance Ministry wanted the action for 3G to be accomplished quickly to increase funds for the government to solve deficit financing issues, both of Vodafone and International banks were very careful to face that auction. No industry will perfect immune to a financial crisis, and telecommunication is not an exception.
For business, financial will increase the running cost, and lessen profits. All the factors influence how the business runs, and what their next move is. This case tells us a awful economic environment can affect a company's important decision. (mydigitalfc. com, 2008) Things are not always bad, the CEO of Vodafone in Romania said that telecommunication industry will affected by global financial crisis compared to the banking system. (wall-street. ro, 2008) In Romania, the data service customer increased triple than the year before last year without recession.
It's hard to explain this strange situation. I guess that may be because people got nothing to do duo to no job, and the only thing for them is staying at home and use the internent to find job or do some e-business. This is only my conjuection. Last but not least, do you remember the Vodafone's sponsorship with McLaren F1 team? To continue this activities, Vodafone had to lay off 500 jobs sicne the global ression. Follow the news, this behaviour had directly connect with financial crisis. As we can see, economic environment can affect business directly. (Panzariu, 2009)