5/20/2009 2:56:00 PM
Logic behind Laurence’s strategy
It’s not quite mayonnaise with chips, but Vodafone’s UK CEO, Guy Laurence, is taking a popular format from Holland and introducing it to the Brits.
Aggressive positions on prepay and roaming in Europe underpinned his successful tenure in charge of Vodafone Netherlands. He has now identified them as areas where Vodafone can make its mark in the UK. There appears a gap in the market as prepay seems out of fashion with Vodafone’s rivals, and was a route taken by O2 to instill loyalty from young consumers buying their first mobile phone.
With few options to kick-start a recovery, this appears a smart tactic. Offering to include calls and texts made overseas in bundles is also an area Vodafone can differentiate from its rivals by exploiting it all over Europe. Legend has it that Laurence took the Netherlands team in charge of roaming over to his house in the South of France for three days, to formulate his plans before it launched.
The financial results this week outlined the scale of the task facing Laurence in the UK. Service revenues continue to slip (7.3%) and the customer base is at a standstill. Vodafone has had to backtrack from its belief that its premium brand can justify higher prices, offering discounts to retain customers. Group CEO Vittorio Colao repeated his view that there is still too much competition in the UK, and could yet make a play to buy 3’s European operations.
In the short-term, Laurence has the thankless task of halting O2’s momentum, and must find new areas to build revenue at a low cost and attract high spending customers amid a ferociously competitive and recessionary market.