Dizz

Synergy Consulting
 Agenda
Organizational Diagnosis Critical Success Factors

Market Development Strategy Issues And Recommendations

Conclusion
Organizational Diagnosis
Macro-analysis

Regulation Recession
Foreign exchange

Changing customer needs Diffusion rate of technology

Growing importance of Rate of technological change

technology
Emerging technology: 3G
Low threat of new entrants
High initial capital Industry
requirements, economies of
scale, and tight regulatory
requirements
Competitiveness
High threat of substitutes Threat
Many substitutable products
Threat of
of new
new
entrants
entrants
from other industries, relative
costliness of mobile services as Low
compared to other services

High buyer power

Low switching cost,
homogeneity of products within Intensity
industry, elastic demand for the Intensity of
of Threat
Threat of
of
Buyer
Buyer power
power rivalry
rivalry substitutes
industry’s service substitutes
among
among firms
firms
High High
Low supplier power High
Highly competitive handset
manufacturing industry

High intensity of competition

within industry
Low product differentiation, Supplier
Supplier
same costs and sources of power
power
inputs, regulatory pressures for
High
competition
Organizational Diagnosis
SWOT Analysis
OPPORTUNITY

MARKET
STRENGTH WEAKNESS
DEVELOPMENT

DIZZ

THREAT
Critical Success Factors

CRITICAL SUCCESS
FACTORS
- IT system
- Business process
- Alliance with suppliers Resource management
- Partnership with institutions
- Alliances with search engines
especially financial
Timely innovation to Consistent superior resources to support
address changing performance to create
wants and needs customer loyalty projects and investments
Market Development Strategy

Average Proportion of Customers

Europe

41% Africa
44%

15%
Asia
Market Development Strategy
Trend in Revenues

80.00%
70.00%
60.00%
50.00%
40.00% Europe
Africa
30.00%
Asia
20.00%
10.00%
0.00%
2008 2009 2010 2011 2012 2013 2014
Market Development Strategy

• Asia has the most market potential among the

regions
• 85% of India is yet to be tapped as mobile
phone customers

TARGET THIS
EMERGING
MARKET
Market Development Strategy Investment in India
Year Customers Revenue Profit ROI

2010 20 € 2,151 € 484 2.85%

2011 24 2,664 599 3.53%

2012 28.8 3,229 742 4.37%

2013 34.56 4,086 919 5.41%

2014 41.472 5,060 1,138 6.70%

Issues and Recommendations Top
Priority Issues

1 Errors in update of contracts details in Europe

2 Proposal to change the organizational structure

3 Resignation of CEO in Africa

4 Regulator threat in Yee

Issue 1 Errors in the Upgrade of CAS

Situation

●
Customers in Europe complain of being charged excess rates
●
Defective CAS application written by an outside contractor
●
Potential 70.22% decrease in profits

Engage the original developer to repair the system

Adopt tighter policies to improve the process of selecting outside contractors

Forecasted Number of Customers (in millions)
180
C 160
U 140
S
T 120
O 100
M 80
E
60
R
S 40
20
0
2009 2010 2011 2012 2013 2014

YEAR

Assuming Normal Operations Assuming Errors Persist

 Forecasted Operating Profit (in millions)
18,000
16,000
14,000
P
R 12,000
O
F 10,000
I 8,000 fits
e cr e as e in P r o
T D
age Pe r centage
6,000 Aver 0.22%
7
4,000
2,000
-
2009 2010 2011 2012 2013 2014
YEAR

Assuming Normal Operations Assuming Errors Persist

 Proposal to Change
Issue 2
Organizational Structure

Reject proposal
because of need
of Dizz for
Advantages Disadvantages responsiveness
Issue 3 Resignation of CEO in Africa

Situation

●
CEO in Africa resigns; European CEO assumes position
●
Strategic direction dispute
●
Weakness in organizational leadership in Africa

Assign a new CEO in Africa from its senior management team.

Issue 4 Regular Threat in Yee

Situation

●
Threat of being fined
●
Non-compliance with regulator’s requirements
●
Potential fine; possible loss of license and revenues from Yee

Invest in the upgrade of transmitters not later than September 2009

Total Differential Cost (in millions)

Total Differential Cost

Upgrade Shutdown
Transmitters in Yee Operations in Yee

8,578
231
8,809
Other Issues
Shop in shop
Performance proposal
Related Pay
Scheme

Marketing
efforts targeting
children in Asia

Network
Security
Acquisition
of Casung
handsets
 Shop in shop proposal

Situation

●
Offer by major department store chain to open 100 shops across Europe

Advantages
●
Potential for increased revenues over life of lease
●
Increased visibility in shop locations

Disadvantages

●
Net cash outflow over life of lease

Reject proposal because of expected loss on the project

 Forecasted operating profit over the term of
the contract
20,000
18,000
16,000 Net Cash Outflow Over the
Lease term
14,000
12,000
28,284
10,000
8,000
6,000
4,000
2,000
0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Gross Profit per year Total Costs per year

 Marketing Efforts Targeting Children
in Asia

Situation

Advantages
●
Marketing drive in Asia targeting children
●
●Roll out of marketing program to other regions
Potential to increase customer base and revenues
●
Help achieve CSR goal of working to protect children

Disadvantage
●
A potential business ethics concern

Adopt the marketing program to other regions

 Marketing Drive in Asia

MARKETING
CORPORATE
EFFORTS ON ADDITIONAL
SOCIAL
CHILDREN REVENUES
RESPONSIBLITY
SECURITY
 Proposal to Acquire Manufacturer

Opportunity to Acquire Casung for 10 M Euros

Advantages
●
Low acquisition price
●
Potential for efficiency from backward integration

Disadvantages
●
No competitive advantage expected to arise from acquisition
●
Increased operating complexity from diversification

Reject proposal to acquire Casung

 Acquisition of Casung
Existing good relations with existing suppliers

Unsuitability of second-tier handsets for a multinational network company

Risk of Casung’s poor product quality

Little experience of the region in which Casung operates

 Network Security

Situation

●
Increased incidence of call time theft though revenue loss is insignificant
●
Pressure to increase network security to avert risks, but no need for further investment according to Global Operations Director

Advantages
●
Reduce revenue loss from call time theft
●
Increase protection of customers and integrity of data transmitted over network
●
Reduce risks of network breakdown that will disrupt service to customer

Caveat
●
Benefit of program should exceed its cost

Participate in industry-wide associations in coping with security concerns

Funding in-house development of security applications or procedures

Network Security

CUSTOMER
DATABASE
SECURITY
 Performance Related Pay Scheme

Situation
●
Proposal to adopt performance related pay for all Dizz employees

Advantages
●
Potential for increase in productivity and service quality levels

Disadvantages
●
Increase in wage levels of about 5%
●
Initial costs in and difficulty of developing scheme
●
Uncertainty of potential benefits

Reject the proposal to pay all employees according to performance evaluation.

Intensify existing employee enhancement programs

Retain the pay for performance program for senior managers whose individual performance can be
more directly aligned to the performance of the company.
 Performance Related Pay

Employee Motivation

Monetary Non-monetary
Factors Factors
 Strengths

• High coverage reach and quality of signal

• Superior customer service in Europe
• Great alliances with global manufacturers
• Highly accurate and reliable IT system
• Economies of scale
• Strong brand equity
• Effective HR programs that motivate
employees through trainings and
development
• Full compatibility with 3G, the latest
technological platform, in Europe
 Weaknesses

• No CEO for the African division

• One-time failure of the IT system due to
externally written billing application
 Opportunities

• Penetration of new markets and growth in current

emerging markets
• Adoption of prospective new technologies across
its networks
• Adoption of the latest existing technologies in
Asia and Africa
• Broadening of industry because of expansion of
product package to include data services
• Backward integration by acquiring Casung, a
handset manufacturer
• Opportunity to open shops across Europe
• Landline telephony
 Threats

• Risk of growth projections not being

achieved, because of recession
• Intense competition, especially in Europe
• Increasing competition in emerging markets
• Tightening regulation and strict license
requirements
• Threats from substitute products
• Concerns of compromise of network security