The paper “ The Scope of the Impact of the Class Action against Vodafone" is a worthy example of a research proposal on marketing. Australia’ s telecom market revenues have reflected a mild downturn since 2011, with various analysts expecting it to remain subdued over the next few years. The Australian telecommunication market is highly competitive. The growth for mobile is expected to continue rising within the pre-paid and post-paid segments since Vodafone along with its competitors all offer HDSPA and 3G internet services (Vodafone 2012). Australia is one of the world’ s leading nations in terms of smartphone penetration, with smartphone-ownership expected to increase to over 60 percent by 2015.
The Vodafone Company seems to be losing its customer base to major competitors such as Optus and Telstra. Indeed, Telstra has consolidated a lead in the Australian telecommunications market, receiving a market share of around 60 percent in 2011 (Bender 2013). Using Porter’ s Five Forces Analysis, the salient problems that Vodafone faces in the telecom industry can be identified and analyzed in an effort to solve the perceived problems resulting from the impacts of the class action.
Porters Five Force Analysis Based on Porter’ s Five Forces Analysis, the key forces that influence Vodafone and the Australian Telecom industry are analyzed. The Five Forces model structures out the company’ s internal and external environment in an effort to analyze the underlying problems facing the company. The five forces singled out by Porter (1985) influence an industry’ s competitive industry. The forces include a threat of new entrants, supplier’ s bargaining power, suppliers substitute goods, customers’ bargaining power and lastly, competitive rivalry (Aarons & Waalewijin 2002). Competitive rivalry: Vodafone faces high competition within the telecom industry as there are several renowned firms that offer similar products.
The major competitors include Optus and Telstra. Further, new technology has stimulated a range of substitute products and services. For instance, since the mobile phone penetration is high in Australia (over 60 percent), the industry players are competing to attract users with a quality range of products and lower pricing. Consequently, this has tended to reduce the overall profitability of the industry. Since Vodafone is a player in the highly competitive industry, the class action has significantly affected its competitive edge resulting in loss of customer base (Bingeman 2013).
The company faces stiff competition from the industry’ s two major competitors, including Optus and Telstra. Indeed, the company needs to redefine its marketing objectives and re-examine its position in the Australian market to pursue the market, improve its reputation and select the right promotional strategies (Bender 2013). Availability of substitutes: The products and services that the Australian telecom industry offers face significant substitution threats. For instance, cable TV and satellite operators are currently competing for buyers.
Additionally, a number of other companies offer similar products like Vodafone. Further, the increased use of the internet has turned out as a viable means for cutting the rates of voice calls (Vodafone 2012). This means that Vodafone still stands to lose its market share (Bender 2013). The threat of new entrants: The capital-intensive telecoms market in Australia’ s single-most prevalent barrier to entry is finance. To cover the huge fixed costs related to fixing the telecom infrastructure, companies will have to put in large amounts of finance (Vodafone 2012). In addition, it is critical to observe that management familiarity and expert operational management capabilities are considerably infrequent to compete with major industry players such as Optus and Telstra make entries to the industry even harder (Ainsworth 2009).