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Vodafone: Global Power, Local Expertise?

Posted by on 09.21.05 | 1 Comment

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One of the supposed motivations for Vodafone’s massive buying spree a few years back was so it could build the biggest economy of scale in the industry, and get the best prices for network equipment and handsets through common sourcing. Another was so that it could take innovations in one country and apply them around the rest of its networks. This was the case with Japan, where Vodafone used the J-SKY content system of J-Phone (now Vodafone Japan) as the basis for its Vodafone live! platform.

But James Enck points out how the company was touting at its recent analyst day that it can innovate in local markets with services and offers to meet particular cultures or needs (like what’s happening in Africa and other emerging markets), using its success in Egypt as an example.

While Vodafone may be doing well in that emerging market, its long-running struggles in Japan are well documented. One significant factor in its downturn was that Vodafone tried to push foreign handsets with subpar features there, and failed badly. So while Vodafone says it can tailor innovation in Egypt, its Japanese operation languishes after the home office tried to fit it with a one-size-fits-all strategy.

Perhaps Vodafone’s learned from its Japanese experience and is giving its local managers more autonomy. But, in a sign that old habits die hard, it continues to eye acquisitions.

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