STRATEGY IN GLOBAL CONTEXT FOR IDEA

CELLUAR LTD.
Introduction:
In this report on the basis of various tools and techniques like Internal Factor
evaluation, SWOT analysis, Resource based view and other techniques like
competitive profile matri! we are now able to su""est the appropriate strate"y for
Idea #ellular$ %ow we are incorporatin" &' matri as well as (#& matri in order to
come to a definite conclusion as to which strate"y is suitable for the firm in the
upcomin" years as the telecom sector is "rowin" at an unbelievable pace$
Idea cellular is a part of )ditya (irla &roup, a multinational havin" operations in *+
countries$ The reputation of bein" the first Indian multinational and part of ,--
fortune companies carries a lot of stren"th which Idea cellular en.oys bein" the part of
presti"ious "roup$ /Idea #ellular, *--01 The profit mar"in of Idea cellular in relation
to its competitors like (harti )irtel and 2odafone has "rown relatively about 34 from
*--56-7 which was ,,4 to ,+4 in *--76-0$ It is stren"th for the or"ani8ation as it is
likely to "ive them a competitive ed"e$ /9: result; Idea cellular, *--01 Idea cellular
has strate"ic alliance with I(< and Oracle$ (oth have a unique brand ima"e for
providin" best in class software solutions like #R< /#ustomer Relationship
<ana"ement1 and O=)> /Online )nalytical >rocessin"1$ It has also tie ups with
leadin" mobile producers like %okia$ This shows that the or"ani8ation is dedicated
towards providin" superior services to its customers$ /Idea >ortal, *--?1
Introduction to Internal Analysis:
Internal analysis is a vital strategic management tool that helps in
identifying the strengths and weaknesses of an organization. These
strengths and weaknesses, give an organization certain advantages and
disadvantages to meet the needs of its target markets. Both strengths and
weaknesses should be identifed from the customers perspective,
because customers often perceive what the organization couldnt identify.
!avid, "##$%Importance of conducting an internal analysis&
It helps to identify an or"ani8ation@s own capabilities, assessin" the followin" thin"s;
STR)T'&A I% &=O()= #O%T'BT FOR IC') #'==D'R =TC$
>rofit analysis;
Physical Resources: Idea cellular is a public listed company havin" license to
operate in ** areas$ >resently its operations eist in ,, service areas, havin" a
customer base of *3 million coverin" more than 5- 4 of the total Indian telecom
population$ /#apitaline, *--?1 #urrently Idea cellular has its corporate office in
<umbai, and a re"istered office in &u.arat$ Its circle offices are located in ,7 states$
>resently it has partnership a"reements with some renowned or"ani8ations such as,
#ellebrum India >vt$ =td$, and %CT2 for 2)S /value added services1, and for
roamin" (harti Telesoft, for marketin" communication it has tied up with =owe India
>vt$ =td$ and for network, %okia and 'ricson are its bi""est partners$ /(ureau '$ ,
*--?1
Reputation Resources: (ein" a part of India@s first multinational "roup,
)ditya (irla, and bein" the third lar"est telecom service provider, it carries a stron"
reputation in the Indian telecom industry$ It is also listed in (ombay Stock 'chan"e
/(S'1 as well as %ational Stock echan"e$ It has been awarded E'mer"in" #ompany
of the yearF by 'conomic times in *--? /The 'conomic Times, *--?1 It has won an
award for G#are services in the best billin" or customer care@ at the &S< association
award in (arcelona, Spain$ The company won presti"ious &olden >eacock )ward for
its innovative product E<y "an"F in *--0$ Idea cellular limited is also an official
sponsor of IIF) awards /Idea #ellular, *--01
Organizational Resources: )lon" with Idea #ellular, )ditya (irla &roup is
considered as one of the most ethical companies in India and it reflects in all of its operations$
The company has maintained cordial relations with its suppliers and distributors$ The
company holds annual award functions to reward its suppliers, distributors and employees$ It
"ives bonuses and dividends to its shareholders and employees every year$
Financial Resources: The current ratio and the quick ratio of Idea Cellular
(Current Assets/Current Liabilities) is 1.38:1 and 1.3:1 hich sho the! can
con"ert their assets in to cash easil! and #a! their current liabilities
(Ca#italine$ %&&'). In the sa(e a! their orkin) ca#ital is
VRHN: Idea Cellular
VRHN analysis is considered as the foundation of internal analysis$ Whatever an
or"ani8ation possesses is "enerally considered as a resource or capability$ Financial
resources, plant, equipments, technolo"y, brand equity and or"ani8ational epertise all
can be considered as resources$ Therefore, in order to have a competitive advanta"e
an or"ani8ation has to make sure that its resources are valuable, rare, hard to imitate
and non substitutable$
Value: The Indian Telecom sector is the bi""est telecom sector in the world, which
has not been affected by economic downturn /)ntony )$ H &hosh C$, *--01$ Cue to
chan"e in per capita income, and providin" "ood service, it is "rowin" rapidly$ <any
multinational companies such as )THT /DS)1, <T% /South )frica1, 2odafone /DI1
are tryin" to take control in India, but the domestic players like )irtel and Idea
#ellular are tryin" to stop them to become a market leader$ Idea cellular has "reat
"oodwill in India, because of many reasons such as, it is a public listed company, part
of ,*J billion of India@s first multinational "roup E)ditya (irla &roupF, which has
operations in ,0 countries /Idea #ellular, *--?1$ 'ven thou"h, Idea wasn@t the first
player in the telecom industry to launch &>RS, it has been awarded by The 'conomic
Times in *--? as emer"in" company of the year /The 'conomic Times, *--?1$ So its
product has positive ima"e between consumers$
Rarity: )s we know infrastructure and technolo"y is not at par in India$ So, Idea has
tie ups with I(<, Oracle, %okia and 'ricson$ They provide "ood software which Idea
cannot "et in India due to technolo"y$ Idea use I(< webspare application server for
data and financial transaction, Oracle Siebel customer data inte"ration for #ustomer
Relationship <ana"ement and Supply #hain <ana"ement O=T> /Online Transaction
>rocess1 software to optimi8e the data security, network mana"ement$ /The Financial
'press, *--01
Hard to imitate: In India, every telecom company has to follow same rules and
re"ulations laid down by TR)I /Telecommunication Re"ularity )uthority of India1
and CoT$ One company cannot copy another@s product, service name or punch line
because of Re"istered Trademarks and #opyri"hts /TR)I, *--?1, but they can start
same service at same price with different name such as Idea came up with a unique
plan EIdea Women #allin" #ard and <y &an"F then in few days )irtel started
EFamily and FriendsF, when Idea started &>RS service, )irtel and 2odafone
IFE Analysis Matrix
K! Intrn"# F"ctor$: %i&'t R"tin&
%i&'td
Scor
Strn&t'$:
Idea #ellular Cominates 7-4 of rural market -$-0 3 -$:*
India@s *
th
lar"est telecom service provider -$-7 : -$*,
Technolo"ical innovation like India@s first &>RS
service provider -$-? 3 -$:5
(rand reputation like S(D of India@s first
multinational "roup -$-5 : -$,0
Superior inventory turnover ratio and current ratio -$-0 3 -$:*
Stron" advertisin" and promotion -$-7 : -$*,
'cellent Cebt 'quity ratio and therefore financial
a"encies easily provide loan to the company$ -$-0 3 -$:*
Increase in service operational and network areas -$-7 : -$*,
>rofit mar"in increasin" at healthy rate -$-5 3 -$*3
Strate"ic )lliance such as with I(<, Oracle, %okia
%"(n$$:
Tar"et only %orth India -$-? , -$-?
%et operatin" profit ratio is decreasin" -$-? * -$,0
%o presence in (roadband or internet service -$-? , -$-?
Increase in the operatin" cost -$-? * -$,0
%ot a player of Cirect To Kome Service
-$-* , -$-*
TOTAL , *$?:
Rational behind identifying the cometitors:
)naly8in" the competitors is an essential component of corporate strate"y$ Inowin"
about the competitors and their profile will help the concerned or"ani8ation in
knowin" its weaknesses that it may eploit$ ) detailed profile of the competitors,
helps an or"ani8ation in "ettin" an in depth description of the competitor@s
back"round, its unique sellin" proposition, financial condition, its strate"ies, the
products and the market share$

Cometiti!e
"ro#le Matrix:
Id" Airt# Vod")on
R#i"nc t#co*
CSF+$ %t R"tin& %t+d
Scor
R"tin& %t+d
Scor
R"tin& %t+d
Scor
R"tin& %t+D
Scor
<arket Share -$,+ * -$:- 3 -$5- : -$3+ , -$,+
(rand Ima"e -$,+ : -$3+ 3 -$5- : -$3+ * -$:-
Financial >osition -$,- 3 -$:- 3 -$3- : -$:- : -$:-
Service 9uality -$-0 : -$*3 3 -$:* 3 -$:* , -$-0
#ustomer =oyalty -$-5 * -$,* * -$,* * -$,* * -$,*
Sales #hannel
/Cistributor, Outlets1
-$,- 3 -$3- : -$:- 3 -$3- * -$*-
&lobal 'posure -$-+ : -$,+ 3 -$*- 3 -$*- , -$-+
Or"$ #ulture/)wards1 -$-0 3 -$:* : -$*3 * -$,5 : -$*3
Sale "rowth -$-+ : -$,+ 3 -$*- : -$,+ * -$,-
>romotions
/advertisement1 -$-5 :
-$,0
:
-$,0
3
-$,0 : -$,0
<ana"ement$
eperience
-$-7 : -$*, 3 -$*0 : -$,3 : -$*,
#ompany Ima"e
-$-+ : -$,+ 3 -$*- : -$,+
* -$,-
Total , *$?7 :$53 :$-* *$-:
%O Str"t&i$: This strate"y is a tool by which we can understand the weaknesses
and compare them with the opportunities we have in hand, and makin" an effort to see
how weaknesses can be utili8ed in maimi8in" the available opportunities$
'arlier the firm was tar"etin" the consumers of %orthern India only$ In its recent
epansion plan it has slowly capture the other parts of India as well, but it has not
been able to provide some value added services like Cirect to home and mobile
broadband service like Tata and Reliance$ The reason behind providin" these value
added services is that it "ives a unique stren"th to the firm and a kind of
diversification$ The result is broadenin" of services and capability of .umpin" into
other related services which can be very securely connected with mobile services$
ST Str"t&i$: =ookin" at the stren"th of the firm the firm carries a brand name and
the market share of the company is increasin" in other parts of India as well includin"
north and western parts of India$ The company@s promotional strate"ies are also
provin" beneficial$ The recent advertisements have proved successful in eecutin" the
brand communication to the consumers$ (ut the threats cannot be i"nored and these
have to be very carefully analy8ed so that the threats can be minimi8ed into stren"ths$
>oor infrastructure and not up"radin" the technolo"y whenever the need arises is a
bi" threat and it has to be minimi8ed to the maimum etent possible$ Sometimes
poor eecution of promotional activities can also dama"e the reputation of the firms$
The care has to be taken as to what technolo"y is most suitable, with whom the firm
should tie up /like strate"ic alliance with %okia and other ma.or software providers
like I(<1$ )nother ma.or threat can be the untrained workforce$
The strate"y here the company can adopt is to see whether what kind of trainin" is
required for the workforce and at what time$ Cealin" with the local distributors is a
challen"in" task and it requires a stron" convincin" power$ Thus Idea cellular can
minimi8e this threat by "ivin" appropriate trainin" to its workforce from time to time$
Dp"radin" the technolo"y and brin"in" on more creative promotional activities can
brin" in a lot of chan"e in the company@s business$
BCG *"tri,:
BCG -"tri, o) Id" C##u#"r Li*itd .it' r$/ct to Airt# "nd indu$tr! &ro.t' r"t:

Idea
The 'ntire Telecom Industry is "rowin" at a rate of :+4 as compared to the base year
*--56-7$ This can be termed as a moderately "rowin" Industry and it is epected to
"row in the comin" years$ )lso as per the latest report of TR)I, an ape body
re"ulatin" telecom affairs, the number of mobile subscribers has touched +- crore$
(harti )irtel is the market leader with :*4 share for lon" time but now they are
losin" their market share$ Idea #ellular =imited has a share of **4 in the total &S<
telecom market in India /as on Luly@-?1 and it is "rowin" at ,04 annually$ >resently
its operations eist in ,, service areas, havin" a customer base of *3 million coverin"
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)elative 'arket *hare
Conc#u$ion
)s a conclusion of this report we fi"ure out that the company@s strate"y to t ar"et the rural
se"ment! launch a new service with same brand name like Tata Cocomo has done, provide
fast &>RS, mobile internet services and provide "ood customer service which is havin"
the attractiveness score of 5$**$
Annexure $
SO Str"t&! %O Str"t&!
,$ #an "o for <arketin" penetration; Tar"et the
urban se"ment! launch a new service with same
brand name like Tata Cocomo has come up E(illin"
per pulse rateF, provide more "ood and fast
services like &>RS, mobile internet services and
provide "ood customer service
,$ #an "o for Forward Inte"ration6 Operate
other showrooms which supplement the
distribution channels




References
Idea Lourney/n$d$1$ Retrieved September -*, *--?, from Idea #ellular;
http;MMwww$ideacellular$comMShow(inaryM(')
4*-RepositoryMideaMInvestor>resentationMInvestor>resentation9,FA,-$pdf
Some "ap in Idea market opportunity /*--0, Luly ,-1$ Retrieved )u"ust *?, *--?,
from The Financial 'press;
http;MMwww$financialepress$comMprinterMnewsM:::30?M
)nto )ntony H Curba &hosh, '$ ($ /*--0, Cecember *-1$ Telecom beats slowdown
blues contribute big to GDP growth$ Retrieved )u"ust :,, *--?, from The 'conomic
Times; http;MMeconomictimes$indiatimes$comMarticleshowM:053557$cms
Budget$ /n$d$1$ Retrieved )u"ust :-, *--?, from India (ud"et;
http;MMindiabud"et$nic$inM
(ureau, '$ /*--?, au"ust *+1$ Features$ Retrieved -? -,, *--?, from The 'conomic
Times; http;MMeconomictimes$indiatimes$comMarticleshowM3?:-?,?$cms
(ureau, O$ /n$d$1$ Tax award for Idea Cellular $ Retrieved September -*, *--0, from
The Kindu (usiness =ine;
http;MMwww$thehindubusinessline$comM*--0M-:M-3MstoriesM*--0-:-3+,,7*:--$htm
Idea Cellular Revenue$ /*--?1$ Retrieved )u"ust *7, *--?, from The Financial
'press; http;MMwww$financialepress$comMnewsMidea6cellular6revenue6up6,:$?6
pctM3,3:+7M
Idea Cellular Revenue$ /*--?, Lanuary *:1$ Retrieved )u"ust :-, *--?, from The
financial 'press;
http;MMwww$financialepress$comMnewsMidea6cellular6revenue6up6,:$?6pctM3,3:+7M
India orld!s "econd#largest ireless $ar%et$ /*--0, )u"ust 01$ Retrieved September
,, *--?, from The 'conomic Times;
(rand Information

The brand IdeaIt is almost impossible to disinte"rate brand Idea
from the corporate Idea$(rand values are the company values
and vise versa$(rand 2ision; It "oes without sayin" that the
brand vision of idea mirrors thecompany@s vision$ The brand
mission statement is$$$$$$ To be the most customer6focused
mobile service brand, continuously innovatin" to help liberate
our customers from the shackles of time H space$