Transcript
Strategic Audit of BSNL
BSNL LOSING ITS MINI NAVRATNA STATUSGROUP 9
LOSING THE MINI –NAVRATNA
STATUS!!
A DYING
PROMETHEUS!!!!
FUTURE
Telecom Industry
Telecom Industry
India is the 3rd largest telecommunication market in the world.
Telecom sector contributes nearly 2% of the Indian GDP.
Under NTP 1999 telecom sector has transformed drastically.
The overall teledensity has reached 77.5%
Subscriber base has a growth rate of over 26%.
Evolution of Telecom Sector
BSNL: Introduction
BSNL is the state owned telecommunication company headquartered in New Delhi.
It is the largest provider of fixed telephone service in India
It has 95 million customers as of June 2011.
Services provided by BSNL are Universal telephone service, cellular mobile telephone services, WLL-CDMA telephone services, Internet, IN, 3G, IPTV, FTTH, VVOIP, WIMax
BSNL has 75% market share of fixed lines
BSNL: Introduction
BSNL has13.50% share of mobile telephone.
55.6 % market share with 9.19 million internet subscribers.
BSNL has world-class infrastructure
BSNL’s Turnover for the financial year 2010-11 of BSNL was 29,700 crores.
Growth Plan of BSNLConsidering the current scenario and demand in telecom sector BSNL has planned to increase its customer base to 160 million by March 2014.
Products
Universal Telecom Services
(75% Market Share)
Cellular Mobile (13.50% share )
WLL-CDMA Telephone
Internet1. Netone
2.Broadband (55% Market
Share)
Intelligent Network
Products
3G IPTV FTTH
Tablet-PC WiMax
Market Share
Competitors Profile: Airtel
Largest player with presence in 23 circles. Market share of 20% (approx)
Cost leadership & High Quality Technology
Operational Efficiency
CORE Competency: Branding & Promotions
Outsourcing Managed Services to Erricson IT service to IBM
Vodafone, completed the acquisition of Hutchison Essar in May 2007.
It is among the top three GSM mobile operators of India.
Cost Leadership & World Class Technology
Core Competency Brand Image Recognition
Vodafone also became a mass mobile phone brand like Nokia, Samsung, Motorola, and Sony Ericsson in addition to continuing as telecom services provider.
Competitors Profile: Vodafone
Major Issues
Issues
ISSUES
EXTERNAL ISSUES
INTERNAL ISSUES
(Rs in crores)
External Issues
Political Environment
External Control and Bureaucracy
Lack of support from the Government
No strategic investments and lack of transparency
Entry of private players
Linkage between social obligations and commercial activities
Internal Issues
Higher wage expenditure.
Lack of coordination and support from employees.
Poor customer service.
Operational inefficiency.Poor marketing strategy and hence poor brand equity.Huge infrastructure and assets.
Poor technology implementations
Slow decision making
Analysis
Analysis
SWOT
Porters Five Forces
PEST Analysis of Indian telecom market
Grand Strategy selection matrix
Ansoff Matrix
SWOT
STRENGTHS Market leader as far as wireline subscriber base
is concerned Large no. of resources Huge optical fiber network Deep penetration into the rural market Huge tower network with approx 70,000 towers Easy deployment of new resources
WEAKNESS High bureaucratic control Operational inefficiency Not leveraging their huge infrastructure Poor technological implementations Poor marketing strategy and hence poor brand
equity Few strategic alliances Other problems like social obligations and
outdated technologies
SWOT
OPPORTUNITIES India is one of the fastest growing market in
telecom sector 5G Allocation and shifting of trend towards
adoption of Next generation networks Strategic alliances to penetrate globally Broadband in rural areas Public private partnership
SWOT
THREATS Highly competitive market Market maturity in basic wireline phones Decrease per line revenues due to competitive
pricing Private players now focusing on fixed wireless
phones
SWOT
Porters Five Forces
THREAT OF NEW ENTRANT(Medium)
DEGREE OF RIVALRY(High)
BARGAINING POWER OF BUYERS
(High)
THREAT OF NEW SUBSTITUTES
(Low)
BARGAINING POWER OF SUPPLIERS
(High)
Degree of Rivalry
There is high degree of rivalry in telecom industry
High Exit Barriers High Fixed Cost: Very Less Time To Gain Advantage
By Innovation Price Wars
Threat of New Entrants
For telecom industry threat of new entrants is Medium.
Licensing requirement act as a major barrier to entry. Sometimes it became very difficult for the new entrants to obtain license.
The Threat Of Substitutes (Low)
Threat of substitutes is currently low in the telecom sector
Rapid increase in penetration of broadband in India, it is gradually increasing with the increasing use of services like online chat, VOIP skype, Email,etc.
Bargaining Power Of Buyers (High)
Bargaining power of buyers is dependent on size and concentration of customers.
It depends on the level of information of buyers & differentiation of the competitor.
In telecom sector buyer power is high as there are many large players in the market.
Bargaining Power Of Suppliers (Medium)
Market has high supplier power if suppliers can charge customers different prices in line with differences in the value created for each of those buyers.
PEST Analysis
Political Political Interference Corruptions like 2G scam. Stability of Government
Economic Subscriber base is increasing – due to increase in
disposable income Usage rate is increasing. Low call cost and increasing frequency of calls.
Social Techsavy consumers Lifestyle changes Regional shift in population from rural to urban
areas.
Technological New generation Networks Use of VOIPs Internet Tablets Business on a phone Coming up of E-commerce
PEST Analysis
Business Strategy
Grand Strategy Selection Matrix
Maximize Strengths with Internal Resources
Concentrated growth Focus on increasing market share in existing
markets. Focus on Rural Market Customized plans and discounts
Market Development Joint ventures for penetrating the global Market. Operationalize a market development strategy .
Grand Strategy Selection Matrix
Product development strategy This involves modification of the existing
products and make new products for the existing customers.
They are trying this strategy with their WIMAX technology (Failure of Franchisee model in some areas)
Grand Strategy Selection Matrix
Minimize Weakness with External Resources
Vertical integration Merger with telecom equipment manufacturer ITI Combine service-providing & manufacturing
Overcome Weakness with Internal Resources
Turnaround or retrenchment plans Cost reduction Assets reduction
Divestiture Divest by selling share to public
Grand Strategy Selection Matrix
Ansoff Matrix
Existing market
Existing product New products
Market Penetration•Landline service•Internet service•Cater rural demand
Product Development•Broadband based content oriented services•Tablets
New market
Market development•Cellular service•Leased circuit•Intelligent network•Broadband WIMAX
Diversification•Turnkey projects for ITES companies•International market
RECOMMENDATIONS
Recommendations
Follow recommendations based on analysis of Sam Pitroda’s Report Enhance the decision making process to
the competitive business environment and the changing market realities.
Minimize Political Interaction. Pruning of staff and adding young blood. Encourage Meritocratic culture in BSNL
Leverage huge network strength Improve performance Improve customer service Improve marketing strategy Leverage the huge tower
strength Implement end to end IT system Indulge into PPP
Other Recommendations
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