In this essay my purpose is to show the impact of the globalisation on the telecommunication industry ,more exactly I choose the company called Vodafone .
Globalisation affected every industry of the world , and also affected the telecommunication industry especially in the developing countries .In the beginning I would like to present what is globalisation.
The OECD defines Globalisation as “The geographic dispersion of industrial and service activities,for example research and development,sourcing of factor inputs,production and distribution,and the cross-border networking of companies, for example through joint ventures and the sharing of assets”
Presently it relies upon us how we utilize the globalization factor to take points of interest from them. In creating nations individuals are confounded too from globalization. It gives an ever increasing number of advantages to the organizations and it has its bad effects on independent venture too. It influences the neighborhood chains. More often than not the nearby chains doest need some other organization to be as a contender since they need to control in the market as a monopolist. There is just globalization which can offer help to the general population and give better thing better chances and better comprehension of the item. The world has turned into a global village now you can get anything anywhere in the world it is all the benefits of globalisation. Globalization made world so closer to one another and exceptionally the telecom area. We require wherever to impart on the planet on various issues and distinctive area. It is the the required of modern world.
Now let`s talk a little bit about the Vodafone company , it is considered to be one of the world`s largest company with operations and networks in over 60 countries. Vodafone nake is taken from “VOice DAta FONE” to reflect the provision of voice and data services over mobile phones.Acording to their site they are one of the biggest world communications provider , operating in 26 countries and in partenership with others in over 55 more. Across the world they have almost 444 milions customers and around 19.5 milions in UK. They made the first call on 1 January 1985 from London to Newbury HQ. They now employ over 13,000 people across the UK.
In this work we will use PESTEL Analysis to get in the depths of the effects of the globalisation of the giant Vodafone.PESTEL Analysis its just an acronym used to identify the pros and cons facing an organisation.The letters stand for Political, Economic,Social Technological, Enviromental and Legal.
This strategy should be used or it is used each 6 months in every company to determinate if there are any changes in the company or how any of their changes could affect on a worldwide scale.
We can start with the political factors wich determinates the rules and the laws of a government wich can affect an organisation or a specific industry ,this includes political policy , fiscal and taxation policies too .
The economic factors wich impact the economy and its performance as well as the profitability of an organisation or a company.This may include interest rates , employment and unemployment rate , raw materials costs and foreign exchange rates .
The social factors are focused on the on the social environment and identify any new trends ,this factors are based on culture trends , education levels, changes in lifestyle and may look as well at the behaviour of the people in certain places.
The tehnological factors are looking for the rate of technological inavoation and development that could affect a market or and industry.This factors may include changes in digital or mobile technology,automation, research and development.
The environmental factors wich relate to the influence of the surrounding environment and the impact of ecological aspects,in this group we can relate to climaterecycling procedures,waste disposal and sustainability.
To operate in a good manner an organisation must understand what is legal and allowed on the territories that they operate , to cover this aspect we are getting to the legal terms wich obliges any company to be aware of any changes in the legislation and the impact that it may have on the company.
Vodafone is one of the most rapidly flourishing global companies , wich started as a holder of one of the first two mobile communications licenses in the UK and now it`s a dominant global brand.(Ibbott, 2007) provides a vew that Vodafone crated a social network that was involved in mergers and acquisitions and deployment of a global network of mobile technology that serves a proportionate mobile customer base of 198.6 million in 2006.Ibbott(2007) explained what really globalisation means as “A global company is one that permits its local operations to act in the image of the market locally and yet can act in a truly homogeneous way with the respect to the supply and provision of it s core products and services”Vodafone is a global company as it s sourcing and supply chain activities are transferred to be entirely global for the major part of it s investment, while services remain local(Ibbott, 2007).
The globalisation started to influence in a very powerfull way the global economy.(Salvatore , 2004) analised that the globalisation on the comparative advantage of Europe and concluded that Europe has a lower quality in telecommunication compared to Japan,United States and some Asian Countries.
In 2005 Vodafone has experienced a fall out in Japan .They have released the “Converged-Handset” in the winter of 2005 in 13 countries including Japan.Being one of the world`s biggest firm ,it did so without taking into account the domestic environment of each country.Doing this they lost subscribers and also they got a loss on their profit .The company lost 200,000subscribers in the first few months of the year and profits declined by 15.4 percent(Fackler&Belson, 2005).
Vodafone restructured its business model in 2009 , in order to save costs and to accommodate more customers-facing roles. Around 400 workers were made jobless from its headquarters or being deployed to some other places. Hence, it is being proven over the years that in large multinational organizations, large number of workers have been made jobless, creating a sense of insecurity among workers. Taking into account the fact that globalization may also have adverse impact on workers; The European Globalization Adjustment Fund (EGF) has been. The growing integration of the economies has been a heated debate all around the world over the last two decades. The consequences of globalization and its various dimensions have been widely debated and examined by academics, politicians, policymakers, and even the private sector. According to the United Nations Development Program, Human Development Report, 1999 “Globalization is shaping a new era of interaction among economies and people. It is increasing the interaction between people across national boundaries, in economy, technology, in culture and in governance. But it is also splitting production processes, labor markets, political entities and societies. So, while globalization has positive and dynamic aspects, it has also negative, disruptive, marginalizing aspects.” Critics of globalization argue that globalization is detrimental to economic growth, such as it increases income inequality among nations, economic instability may arise, workers are being exploited and governments become unable to raise taxes, on the other hand, the advocates of globalization are of the view that it brings higher rate of sustainable economic growth and improved living standards. In a study from the Centre of Economic Policy Research by European Policy Advisors, while analyzing the economic impact of globalization, it was found that the true benefits of globalization overweigh the costs associated with it.
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