ON
“ANALYSIS OF BHARI AIRTEL GROUP”
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Prof
INTRODUCTION OF STRATEGIC MANAGEMENT
Strategic management is the art, science and craft of formulating,
implementing and evaluating cross-functional decisions that will enable
an organization to achieve its long-term objectives. It is the process of
specifying the organization's mission,vision and objectives, developing
policies and plans, often in terms of projects and programs, which are
designed to achieve these objectives, and then allocating resources to
implement the policies and plans, projects and programs. Strategic
management seeks to coordinate and integrate the activities of the various
functional areas of a business in order to achieve longterm organizational
objectives. A balanced scorecard is often used to evaluate the overall
performance of the business and its progress towards objectives. Strategic
management is the highest level of managerial activity. Strategies are
typically planned, crafted or guided by the Chief Executive Officer,
approved or authorized by the Board of directors, and then implemented
under the supervision of the organization's top management team or senior
executives. Strategic management provides overall direction to the
enterprise and is closely related to the field ofOrganization Studies. In the
field of business administration it is useful to talk about "strategic
alignment" between the organization and its environment or
"strategic consistency". According to Arieu (2007), "there is strategic
consistency when the actions of an organization are consistent with the
expectations of management, and these in turn are with the market and the
context." “Strategic management is an ongoing process that evaluates and
controls the business and the industries in which the company is involved;
assesses its competitors and sets goals and strategies to meet all existing
and potential competitors; and then reassesses each strategy annually or
quarterly [i.e. regularly] to determine how it has been implemented and
whether it has succeeded or needs replacement by a new strategy to meet
changed circumstances, new technology, new competitors, a new economic
environment., or a new social, financial, or political environment.”
In the 1970s much of strategic management dealt with size, growth, and
portfolio theory. The PIMS study was a long term study, started in the 1960s
and lasted for 19 years, that attempted to understand the Profit Impact of
Marketing Strategies (PIMS), particularly the effect of market share. Started
atGeneral Electric, moved to Harvard in the early 1970s, and then moved to the
Strategic Planning Institute in the late 1970s, it now contains decades of
information on the relationship between profitability and strategy. Their initial
conclusion was unambiguous: The greater a company's market share, the greater
will be their rate of profit. The high market share provides volume and
economies of scale. It also provides experience and learning curve advantages.
The combined effect is increased profits. The
studies conclusions continue to be drawn on by academics and companies
today:
"PIMS provides compelling quantitative evidence as to which business
strategieswork and don't work" - Tom Peters.
The benefits of high market share naturally lead to an interest in growth
strategies.
The relative advantages of horizontal integration, vertical integration,
diversification, franchises, mergers and acquisitions, joint ventures, and organic
growth were discussed. The most appropriate market dominance strategies were
assessed given the competitive and regulatory environment.
There was also research that indicated that a low market share strategy could
also be very profitable. Schumacher (1973), Woo and Cooper (1982), Levenson
(1984), and later Traverso (2002) showed how smaller niche players obtained
very high returns. By the early 1980s the paradoxical conclusion was that high
market share and low market share companies were often very profitable but
most of the companies in between were not. This was sometimes called the
“hole in the middle” problem. This anomaly would be explained by Michael
Porter in the 1980s. The management of diversified organizations required new
techniques and new ways of thinking. The first CEO to address the problem of a
multi-divisional company was Alfred Sloan at General Motors. GM was
decentralized into semiautonomous
“strategic business units” (SBU's), but with centralized support functions.
One of the most valuable concepts in the strategic management of multi-
divisional companies wasportfolio theory. In the previous decade Harry
Markowitz and other financial theorists developed the theory of portfolio
analysis. It was concluded that a broad portfolio of financial assets could
reducespecific risk. In the 1970s marketers extended the theory to product
portfolio decisions and managerial strategists extended it to operating division
portfolios. Each of a company’s operating divisions were seen as an element in
the corporate portfolio. Each operating division (also called strategic business
units) was treated as a semiindependent profit center with its own revenues,
costs, objectives, and strategies. Several techniques were developed to analyze
the relationships between elements in a portfolio. B.C.G. Analysis, for example,
was developed by the Boston Consulting Group in the early 1970s. This was the
theory that gave us the wonderful image of a CEO sitting on a stool milking a
cash cow. Shortly after that
the G.E. multi factoral model was developed by General Electric. Companies
continued to diversify until the 1980s when it was realized that in many cases a
portfolio of operating divisions was worth more as separate completely
independent companies.
EXECUTIVE SUMMARY
This report on Bharti Airtel is done to findout certain objective regarding
the strategic approach Adopted by Airtel to stand strongly in the
competitive telecom market. Airtel’s marketing strategies are analyses
using various models like SWOT analysis, BCG Matrix, Ansoff’s matrix,
porter’s five forces etc.
The outcomes of these models are properly analyzed to find out the various
aspects like companies position and competitors position in the market.
This report on Airtel not just give description about the company but it also
talks about the various marketing strategy adopted by the company.
SWOT analysis of Airtel helps to find out the weak points of the company and
to find out the way to overcome this problem. Similarly with the help of Ansoff
matrix it can be finding that what are the different strategic options available to
the company under the different market condition. and to find the answer that
why company is looking for overseas market like Nigeria and Seychelles.
COMPANY PROFILE
It is known for being the first mobile phone company in the world to outsource
everything except marketing and sales and finance. Its network (base stations,
microwave links, etc.) is maintained by Ericsson and Nokia Siemens Network,
business support by IBM and transmission towers by another company.
Ericsson agreed for the first time, to be paid by the minute for installation and
maintenance of their equipment rather than being paid up front. This enables the
company to provide pan-India phone call rates of Rs. 1/minute (U$0.02/minute).
During the last financial year [2009-10], Bharti has roped in a strategic partner
Alcatel-Lucent to manage the network infrastructure for the Telemedia
Business.
Voice Services
Mobile Services
Satellite Services
Managed Data & Internet Services
Managed e-Business Services
Voice Services
Bharti Airtel became the first private fixed-line service provider in India. It is
now promoted under the Airtel brand. Recently, the Government opened the
fixed-line industry to unlimited competition. Airtel has subsequently started
providing fixed line services in the four circles of Delhi, Haryana, Madhya
Pradesh, Karnataka, Tamil Nadu & UP (West). Airtel Enterprise Services
believes that these circles have high telecommunications potential, especially
for carrying Voice & Data traffic. These circles were strategically selected so as
to provide synergies with Airtel’s long distance network and Airtel’s extensive
mobile network. Airtel Enterprise Services, India's premium telecommunication
service, brings to you a whole new experience in telephony. From integrated
telephone services for Enterprises and small business enterprises to user-
friendly plans for Broadband Internet Services (DSL), we bring innovative,
cost-effective, comprehensive and
multi-product solutions to cater to all your telecom and data needs.
Mobile Services
Airtel’s mobile footprint extends across the country in 21 telecom circles. It’s
service standards compare with the very best in the world. In fact, that’s how
Bharti has managed to win the trust of millions of customers and makes it one
of the top 5 operators in the world, in terms of service and subscriber base.
The company has several Firsts to its credit:
The First to launch full roaming service on pre-paid in the country.
The First to launch 32K SIM cards.
The First in Asia to deploy the multi band feature in a wireless
network fo efficient usage of spectrum.
The First to deploy Voice Quality Enhancers to improve voice
quality and acoustics.
The First telecom company in the world to receive the ISO
9001:2000
certification from British Standards Institute
Satellite Services
Airtel Enterprise Services provides you connectivity where ever you take your
business Our Satellite Services bring you the benefits of access in remote
locations. Airtel Enterprise Services is a leading provider of broadband IP
satellite services and DAMA/PAMA services in India. Our solutions support
audio, video and voice applications on demand.
Satellite Services include :
PAMA/DAMA
BIT - Internet
VPN
Satellite based IPLCs for redundancy reasons
MPLS
ATM
FR
Internet
IPLC
Leased Lines
Customised Solutions
International Managed Services
Metro Ethernet
Managed e-Business Services
OBJECTIVE:-
The Indian communications scenario has transformed into a multiplayer,
multi
product market with varied market size and segments. Within the basic
phone
service the value chain has split into domestic/local calls, long distance
players,
and international long distance players. Apart from having to cope with
the
change in structure and culture (government to corporate), Airtel has had
to gear
itself to meet competition in various segments – basic services, long
distance(LD), International Long Distance (ILD), and Internet Service
Provision
(ISP).It has forayed into mobile service provision as well.
SWOT ANALYSIS
Following is the SWOT Analysis for AIRTEL
STRENGTH WEAKNESS
Very focused on Price Competition from
telecom. BSNL and MTNL
Leadership in fast Untapped Rural market
growing
cellular segment.
Pan-India footprint.
The only Indian
operator,
other than VSNL,
that has
an international
submarine
cable.
OPORTUNITY THREAT
The fast-expanding Competition from
IPLC other
market. cellular and mobile
Latest technology operaters.
and low Saturation point in
cost advantage. Basic
Huge market. telephony service
STRENGTH
VERY FOCUSED ON TELECOM Bharti Airtel is largely focused on
thetelecom, around 93% of the total revenue comes from telecom
(Totaltelecom revenue Rs 3,326).
LEADERSHIP IN FAST GROWING CELLULAR SEGMENT Airtel is
holding leadership position in cellular market.. Bharti Airtel is one of India's
leading private sector providers of telecommunications services based on
an aggregate of 27,239,757 customers as on August 31, 2006, consisting
of 25,648,686 GSM mobile and 1,591,071 broadband & telephone
customers.
Price Competition from BSNL and MTNL. Airtel is tough competition from
the operators like BSNL nd MTNL as these two operators are offering
services at a low rate.
OPPORTUNITIES
THREATS
COMPETITION FROM OTHER CELLULAR It is time for BSNL to
improve/expand its cellular services. Fierce and cut-throat competition is
already in place with the markets ever abuzz with several tariff reductions
and announcement of attractive packages, trying to grab most of the ‘mind
share’ of the ‘king’ - ‘the consumer’, whose benefits are increasing with
passing of everyday. If BSNL is not innovative and agile, its cellular
service will be a flop. It needs to be proactive with attractive packaging,
pricing and marketing policies lest its presence in the market be treated
with disdain by the private cellular companies. The launch of WLL services
by Reliance Infocomm has aggravated the situation.
Although Airtel entered in the basic telephony market it’s a biggest there for the
company as the basic telephony market has reached
Porter’s 5 forces
Customer
Bargaining
Power
Threat
Threat from Threat of
of New
Competition Substitutes
Entrants
Supplier
Bargainin
g Power
Competitor Analysis
Market scenario:
Suppliers Bargaining Power
Threat of Substitutes
Landline
CDMA
World Phone
Video Conferencing
VOIP- Skype, G talk, Yahoo Messenger etc.
Threat of New Entrants(Low Because)
Conclusion
After the complete analysis of entire STUDY we put forward a set of
Recommendations which are a follows: