Financial strategy of Vodafone

Research has indicated Vodafone UK to be the largest telecommunication firm in Europe serving approximately 191 million clients. The firm is a multinational firm that has its operations west in 26 countries. The success of the firm is one that is not ordinary especially in relation to the numerous challenges that are presented in the industry. The firm has expanded rapidly and the most essential of the firm's expansion is the one that involved the takeover of Mannesmann during the 2000 financial year which proved the company's thirst for expansion and thus becoming a global leader in its line of operations.

This takeover cost the firm approximately 112 million pounds (Weetman 105). From this, it is clear that one core objective of Vodafone is to become a global leader in the telecommunication industry. This will be achieved through the introduction of very innovative projects. Vodafone's financial objectives revolve around the future needs and goals of the firm. Vodafone's corporate financial planning deals with the identification of the specific financial objectives and after which various ways and techniques to be employed in achieving them are set.

A firm's major financial objective involves making money, the amount to be made, the time frame and how the money that has been made will be spent. Through its operations, Vodafone is deeply committed in improving its operations constantly and through this improving the shareholder's value. The firm is known to review its financial standings year after year and through this, the firm is abler to review its long term profitability and growth objectives.

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The goal behind this is to provide its customers and general stakeholders with reliability, consistency and services and products that are above average The firm is aiming at arriving at solutions that will solve a number of problems encountered by customers as they move from their homes to their places of work that bundle data, messaging, voice and an increase in line services that will enable them to meet their varying needs.

Smith (67) asserts that in aiming to becoming a world leader in the telecommunication industry and increasing its returns, the firm is offering a wide variety of services and products that involve, messaging, voice, fixed line solutions and data. At the same time the firm offers devices that assist their customers to meet their communication requirements. During the 2010 financial year, the firm was able to come and offer a total of 66 new models to the market and twenty three exclusive mobile phones were also launched.

The constant sophistication that is accompanying handsets, the demand for phones that compliment the customers' lives is in an increase. The usage of data is also in an increase and this has been increased by the intuitive devices that are internet enabled. These exclusive handsets are able to offer advanced capabilities that include email ad internet and 24 % of these handsets were sold in Europe during the same year they were launched. The total numbers of iPhone brands were presented to fourteen countries.

The firm was in a position of coming up with Vodafone branded phones that enhance million of persons to share all the benefits that are presented in the emerging market of mobile phone technologies. Similarly, the 16 brands produced under the Vodafone brand name would be traded from a price as low as $15 US dollars (Pratt 75). The company has been working towards achieving its objectives, and by the end of the financial year of 2010, the firm's cash flow had increased by 26. 5%, his increment was due to an increase in the firm's operations, the amount of dividends a received by the firm and the decrease in taxation level.

The company invested 989 million pound in licenses and a spectrum of 223 million pounds in turkey and 549 million pound in the Qatar market (Watson ; Head 134). The Qatar market was funded by the IPO held in the country. The increase of 4. 8% in operations was majorly due to working capital and the effects off foreign exchange. The capital expenditure declined by 247 million pounds, this was due to the low expenditure in the Indian market that generally offset the high spending in the South Africa's market. The intensity of capital in Europe as a result of common functionality was rated at 11. 3%.

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