EDGE
6.2. SWOT Analysis Template
(ii) Apotential entTYuf new cOlllpetitGT
Orascom Telecom (Hold on share of Sheba telccom in the name of Bangia link) launched their serviee~ in March 2005 ,nth stwng base, BTRe awarded another license to ncw eompetilor - Walid Telecom (a giant financial group) which is a pOlential candidate for Ihis bu,iness,
Political upheaval: Few nvals are gelting favors limn govemment wherc is Gmmeen Phone stragghng with impOl1ant issue like intelconncetion, Voll' permission, consultant appointment and so on.
(iii) Lower switching cost to competing brands
The lower cosl of s"ilching makes the ri,a!> ofGrameen phone are stronger Buyers who have the flexibility 10 fill their needs by switehmg brand, or sourcing from wv~ral sellers often havc negotiating room with sellers, Wh~n the products of rivals arc virtually identical, it is rclati,dy ea,y for buyers to swilch from ,eller to seller at little or no cost.
(iv) Growing bargaining power of customer
Buyers arc a strong competitive force whcu they are able to exercise bargaining leverage Overprice, ,ervice quality Orother terms of ,ale.
(v) Sudden price cutdown by the riyals
It creates a volatile markct in terms of profilability and lingering the return on investment.
Strengths
L Country wide heoltJ,y inf•.••truc,u •.•
2. Providmg good customor se,vic", 3. Trained and motiv,ne<Jhum,," ""el, 4. Good corp<lrale governance 5. Very good b"",ding image&
repulat,on
6, A healthy transparem distribulion nOl"ork
7, Supe,ior produCl "moly cornp.rcd to compc"tor
8, A w,dely l'o<ogoized market ic.de, &
an .!tract",c customer base (60%) 9. Abilil;' 10 lakc .J"antagc ofncw
l.chnology
10. Strong soclOlcommitment
Opportunities
I II h'gh demand in thc telophony pcnelr"tion ic high grm,tn potcnt"i Lnthc mark.t bo<auso of
.) Lm, cost handsel b) Increas. affordability
cj Tecnnologic.1 ;nfiuCllCCto tho new generation
J) Acedcrato" c'pltai Lnjcctlon eJ R'"og mcomo level
f) Increased mbollin,ioo
'\\'eakness
I. tlighortMiff,ha"compclitor
2, UnJcre'tllll,IC thc ""ai, or competltors 3, InflateJ w,lh own ,crvicc,
4, Cicglcclmg thc particular m.rket segmcnt tn,)t riv,l, can tind out
Threats
I, A potontial ontry of new competitor 2 Lowcr .,wltching cost to competing hrands 3. Growing bargaining power
4. Choapor t.chnology asag. by rivals 5. ,adJon pncoout down by nval, 6. RetontlOn of key staff becoming erit'eal 7. Possible ncgoti,," publiclty by the flvai,
Fig 6, I SWOT analysis worksheet (At a glance)
The SWOT allalysis template is normally presented as a grid, comprising four sections, one for each of the SWOT headings: Strengths, Weaknesses, Opporntnitics, and Threats. It is important to clearly )dentify the subject of a S\VOT allaly,is, because a SWOT analysis is a perspective of one thing, be itacompany, a product, a pwposition, and idea, a m.thod, or option, .tc.
Chapter-7
Strategic Options for Grameen Phone
7.1. Introduction
Cellular opemtion is more or Ie" ,arne all over the world. However the operator in Banglade,h arc facing some more difficultie, and challenges described below, which are increasing opera ling cost and erealing difficullies for high growth.
7.2. Problem and Challenges
7.2.1. Commercial Power Supply
There has been a big gap between th~ demand and snpply of commercial po"er all over !he conntry. TI,e situation is morc s~vcre in the areas ontside!he Dhaka city. The operators need to spend a lot of money fo1' tlte reSOurces (generator, additional batteries, manpower etc,) to ensure back up power for keeping thc nelwork elements operalionaL
7.2.2. Technical Personnel
Cellular operation is the new busmess era in lelecommunication sector. There is a huge shortagc of ,killed and experienccd engmeers in this field. Conscqucntly operators are experiencing a high turn ovcr of compelent technical personneL
7.2.3. Costly Regulatory Requirements
Govemm~nl imposes an unfavorable I"x on connection which increases the ,tart up cost as wC]1as create big barrier to gmwlh or Ihc market.
Nearly eighl-year old mobile phonc ;crvicc, have been managing O!lrday-to.day life, By now, it has become an inlegral parI "fmore than ten million ci[ilens' pmJlIclivily.
Entire ~mucnt class and a large palt of middle e]as, dominate lhis group.
Lately the mobile phone market beg"" expanJll1g"Jownw"rds tal'gcting the potenti~l alnong thc lower income pcople. Explosion is the 1;ey",orJ to characterizc thc way it happened since competition wa, introduccd in th~ market during 1996-97.
When induslly has expenenced a high growth and reduced the call ehmge3 by almost 60 percent, thc governmenl policy has becollle punishing. Who gets punished?
Certainly the millions of lower-incomc segment of popl,lation, who are yet to bc conne~led. Mal'ket growth "Iso is bought to a stam]sl,11.
7.2.4. Interconne(;tion Problem with Fixed Network
While [he govemmcnt issued five cellular liccnscs in order to quickly address the penetration problem, it h~3 cl'eated serious inlerconneetion plOblems with the fixed network i.e. the numbel' of inlcrc()nneelion ci[Cuits between the cel1,11"1'operatol'S and BTTB has been quilc inadequ"le. The shortagc of the interconnection eircmtc" with the IlTTB has been one of the majol' I'e~sons for slow gmwth of cellular in the early years. The inadeq\l~cy of inlerconnection eirclIilS wilh B"lTB has boughllhe cellular into difficult position.
7.2.5. Literacy Problem
Though literacy talc has m~'reased"round 45%, in true Sense 8~IO% of the population are literate in Bangladc,h, which is creating a hurdle for mobile operator for new services in technology, especially in different types of data SCl"vlCes.
7.3. Strategies Recommendation Through SWOT Analysis
SWOT analysis is just the first "leI' in developing and mlplementing an effeetivc organizational stratcgy.
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q"L"y (WLW]"T',TI)Fig 7.1 Strategy fOIIDulation in SWOT matrix tor Grameen Phone
It requires an attempt to find a strategic fit bcm'cen external opportunities and internal strength while working around external threat and internal weakness for Grnmeen Phone, A schematic represcntation of the matrix is provided to generate specific, feasible alternative strategiea based on cxternal and internal factors. Matching key external and internal fadors is the most difficult part of developing a TOWS matrix and requiring a good judgment and lhere i., no one best set of matches. However the four strategy quadrants leveled SO, WO, ST and WT list specific strategies that would benefit the Grameen Phone in light ofthose underlying factors
7.4. Limitation on SWOT Base Strategies
One of major problems with the SWOT analysis is that while it emphasizes the importance of the four elements assoeiateJ with the ,organizational and envitonmental analysis, it is not easy to identify elements exactly for the company, Identified strengths, weaknesses opporrunity and threat are subj~'Ctto individual's assessment and opinion. Depending on the organization and cireumstances, what may seem like an opportunity, strength &threat, to some extent m~y not appear to be truly:;o in the business as well.
So, to cover all the corners in the business for Gmmeen Pho]]e, few other strategie, with applicable area have been proposed for r~pid groWillg markct as well as maintaining a leadelship in the market.
7.5. Strategies for Turbulent Market
Grameen Phone is finding itself in mdu,try situations characteriL.Cdby rapid fire tcchnological change, short product life cycle, (because of the pace with which llext generation products are being introduced), entry of important new rivals into the market place, frequent launches of ncw competitive moves by rivills and rapidly eVtllving customcr requirements and cxpeetation8 - all occurring at once. In this contexl SWOT is very dynamic, so SWOT base stra!cgy may not be feasible for the company, This is why the central strategy-making;s Uchallenge in a tUl'bulentmarkcl environment. Grumccn Phone can apply the fo!Jowing three ,trateg;c postures in dealing with high pace markel.
7.5.1. React to Change
For instance, it can respond to rival', new product with a better product. It can counler an unexpected shift in buyer tastes and bllyer demalld by redesigning or repackaging its product, or ,hifting its advertising emphasis to ,hfferent product attributes. Reacting IS a defensive slrategy and i, a therefore unlikely to create fresh opportunity. However it is a necessary component in a company's weapon of oplions.
This strategy Call be implemented for tariff change phenomena, increasing product variety 10meet rival's offer and so on
7.5.2. Anticipate to Change
Anticipations entails looking ahead to analyze what i, likely to occur and then preparing and positioning for that future. It entails :>tudyingbuyer behavior, buyer needs, and buyer expectations to get inSIght inlo how the market will evolve, then lining up ahead of lime [he necessary production and distribution capabilities. Like reacting to change anticipating change is still fundamentally def~n"ive in thai force.' outside the ent~rpri,e are in the driver's scat. AnticIpation, however, can open up new opportunities and thus is a better a way to manage than just pure reaction, To achieve the customer trust as well as optim\lm utilization of netwmk resources, Grameen Phone Can Implement the lower taritYduring weekend and ofTpeakhours.
7.5.3. Lead to Change
Leading change entails initiating the marht and competitive forces that others must react and re~pond to - it is an offensive ,lmlegy aimed al putting a company in tlle driver's seat. Lcadmg change means being first to market with an Important new product or services. It means being the technologicallcader, rushing next generalion products to market ahead of rivals and having products whose feature and attributes shape customer preferences and ~xpectalion,. To gain the first mover advantages Gmmeen Phone call intlOduce the new services with next generation !cchnolo~,'-jc, according 10this strategy.
To be a best performing company in high pace markets consistently seek to lead change with proactive strategies.
7.6. Strategies as a Market leader
The competitive positions of the industry leader normally range from stronger to powerful. The main strategic concern for a leader revolves around how to defend and strengthen its leadership position, When SWOT analysis docs not ~Over the entire market situation the followmg three contrasting strategic postures are open to industry leaders and dominant firms:
7.6.1. Offensive strategy
The central goal of a stay on thc otTensive strategy is ta be first mover. It ['CSIson the principle that staying a step ahe"d and forcing rival into reaction, catch up mode is the sure,t path to industry prominence and potential market dominancc _ as sayiug goes
"the best defense is a good offence". I:leing the industry standard seller Grameen Phonc should entail relentless pursuit of continuous lInprovement and innovation Table 7.1 Offensive .,trate"ic component with a licable arca
Strategy Strategic component Applicable Areal Services 1. First mOver in market New technology like3G,New
,ervices like mobile over TV, SMS bankmg ...
2. Quality Enhancement Grade of service increases (GoS), Less dr~;~all, Continuous channel
Offensivc Strategy aVllilabili
3. lmprovcd customer Offered 24/7/365.
SCTVICe Door steps sen-ice,
4, Less costly to switch ConnectiVIty cost their pll1chase li-omrival 1<econncctioncost 5. Ways to cut operatmg Monthly acccss fcc cost
7.6.2. Defensive Strategy
The essences of "foltify and defend" is [0 make it harder for challengers to gain ground and for new finns to entcr. Thc goals of a "[rung defeme are to hold on to the
present market share, strengthen CUtTen!market p",ition and protect whatever competitive advantage the rivals have. Specific defensive actions can include
Table 7.2 Defensive strate~' 'Wdhap lieahle area
Strategy Strategic component Applicable Area! Services 1. Create difIieullies for rival Attached wIth different bodies or new entrants like restaurant, club with a
mobile number.
2. Introducing more product Like service oriented.
Defensive Strategy to COverall matket segment Bu~iness oriented
~. Keeping r~~,~~l~~~eprice Any how make connected with and Hltractive uali negligible cost.
4. Oeate customer loy"1ty to make hurdle for nval to sWItchover by customer
7.6.3. Aggressive Strategy
Here a dominant leadcr plays a c()mpetitive hardball when smaller rivals rock the boals with price cuts or mounl new market offensives that direclly threaten its position. Specific respome can include quickly malching and perhaps exceeding challengers price cuts, using large promolional eampai~ to counter challengers mOves to gain market share and offering better deals to their m"Jor ~ustomers
Table 7.3 Aggressive strateoie eomponenl wilh applicable area
Strategy Strategic component Applicable Area! ServIces l, Large promotional
eamnai~~ to tackle challenger,
Aggressive 2. Forcefully communicating When Same product line use Strntegy for not to uSerivals nroducts . bv-the rival,
3. To push to agree to Wheo a high volume uSer exclusive agreement, for move to rivals
rerum, ifeusl"mer switch over to rivals