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The Indian telecom market has been displaying sustained high growth rates.
Riding on expectations of overall high economic growth and consequent rising
income levels, it offers an unprecedented opportunity for foreign investment. A
combination of factors is driving growth in the telecom market, promising rich returns
on investments.
India is the fourth largest telecom market in Asia after China, Japan and South
Korea.
The Indian telecom network is the eighth largest in the world and the second
largest among emerging economies.
Indian Telecom sector, like any other industrial sector in the country, has gone
through many phases of growth and diversification. Starting from telegraphic and
telephonic systems in the 19th century, the field of telephonic communication has now
expanded to make use of advanced technologies like GSM, CDMA, and WLL to the
great 3G Technology in mobile phones. Day by day, both the Public Players and the
Private Players are putting in their resources and efforts to improve the
telecommunication technology so as to give the maximum to their customers.
The Indian telecom sector can be broadly classified into Fixed Line Telephony
and mobile telephony. The major players of the telecom sector are
experiencing a fierce competition in both the segments.
The major players like BSNL, MTNL, VSNL in the fixed line and Airtel,
Vodafone (Hutch), Idea, Tata, Reliance in the mobile segment are coming up
with new tariffs and discount schemes to gain the competitive advantage.
The Public Players and the Private Players share the fixed line and the mobile
segments. Currently the Public Players have more than 60% of the market
share.
DEMOGRAPHIC CHARACTERS
OPPORTUNITIES
diversify their operations outside developed economies that are marked by saturated
telecom markets and lower GDP growth rates.
COMPETITIVE LANDSCAPE:
RESEARCH INDUSTRY GROWTH RATING1:The First Research Industry Growth Rating reflects the expected industry
growth relative to other industries:--:
COMPETITIVE STRATEGIES
Some businesses think it is best to get on with their own plans and ignore the
competition. Others become obsessed with tracking the actions of competitors
(often using underhand or illegal methods).
Many businesses are happy simply to track the competition, copying their
moves and reacting to changes.
To help forecast the returns that may be made from future investments (e.g.
how will competitors respond to a new product or pricing strategy?
The low cost leader in any market gains competitive advantage from being
able to many to produce at the lowest cost. Factories are built and
maintained; labor is recruited and trained to deliver the lowest possible costs
of production. 'cost advantage' is the focus.
Besides the production effiency, brand and marketing skills plays a important
role in this kind of competition.
For example:--Some organizations, such as Toyota, are very good not only
at producing high quality autos at a low price, but have the brand and
marketing skills to use a premium pricing policy.
2. DIFFERENTIATION STRATEGY
With a cost focus a firm aims at being the lowest cost producer in that niche
or segment.
niches could disappear in the long term. Cost focus is unachievable with an
industry depending upon economies of scale e.g. telecommunications.
MARKETING WARFARE STRATEGIES
Al Ries & Jack Trout has given the four kind of marketing warfare
strategies that are as follows:
1. The principle of defensive warfare,
2. The principle of offensive warfare,
3. The principle of flanking warfare, and
4. The principle of gurilla warfare
Bharti Infratel and Indus Towers are the two top providers of passive
infrastructure services in India.
FACT SHEET OF THE COMPANY
Name
Business
Description:
Established:
Shares in Issue:
Listings:
The
Stock
Exchange,
Mumbai
(BSE)
The National Stock Exchange of India Limited (NSE)
Customer Base
Operational
Network
ORGANIZATIONAL STRUCTURE
As an outcome of a restructuring exercise conducted within the company; a new
integrated organizational structure has emerged; with realigned roles, responsibilities
and reporting relationships of Bhartis key team players. With effect from March 01,
2006, this unified management structure of 'One Airtel' will enable continued
improvement in the delivery of the Groups strategic vision
DATA TABULATION
This Field Study was conducted on AIRTEL, Jodhpur to know the views of
managerial personnel as well as employees of the organization on their
competitive strategies
In this paper I shall try to analyze the competitive strategies adopted by the
telecom companies.
RESPONDENTS
1.
2.
of the field study, an indispensable part of the fieldwork; otherwise this project
work would have been a nullity.
INTERPRETATION & ANALYSIS OF DATA
Here, I am going to tabulate and analyze the data which I have gathered
through my questionnaire and some of the data were collected through the internet
and magazines. These tabulation and analysis are deduced with common question.
Now, here we go .
MARKET SHARE AND REVENUES OF THE TELECOM COMPANIES;
A total of 391.76 wireless subscribers were split between top wireless telecom
operators. Bharti Airtel lead the way with 93.92 million followed by Reliance
(GSM + CDMA).2
Top Wireless Operators in the country:3
Revenue %
Subscriber
S. No.
Wireless Group
Market
Revenues
of total
share (%)
Million
market
36962
revenue
34
base in
millions
Bharti
93.92
23.97
10
Reliance
72.67
18.56
12501
11.5
Vodafone
68.77
17.55
21742
20.7
BSNL
52.15
13.31
10873
10.2
Tata
38.89
9.93
96752
8.9
IDEA
35.12
8.96
97616
9.0
Aircel
18.48
4.73
3804
3.5
Miscellaneous
11.7
2.99
2717
2.5
The CDMA Development Group (CDG) says that there are now over 100
million. CDMA subscribers in India, making it the worlds second-largest CDMA
market. Reliance Communications and Tata Teleservices are placed among the top
five CDMA operators globally, ranking second and fourth, respectively.4
FACTORS THOSE ARE RESPONSIBLE FOR MARKET SUCCESS OF
AIRTEL:
According to the responses obtained from the respondents, the factors that play a
critical role in the market success of the Airtel are as follows:
S.No.
Factors responsible
Yes
No
60%
40%
Concentrateonelite,upmarket
40%
60%
60%
40%
50%
50%
40%
60%
50%
50%
20%
80%
11
Attractive and
innovative
promotional
60%
40%
by Sachin
Tendulkar,
80%
20%
advertisements
9
Advertisements
Shahrukh khan
10
40%
60%
11
Indian brand
30%
70%
12
80%
20%
13
30%
70%
14
Voice clearance
70%
30%
15
Status symbol
30%
70%
12
Bharti Airtel has 24.3% customer market share and 33.8% revenue market
share.
Vodafone India has 18.8% customer market share and 20.7% revenue market
share.
Reliance Communications has with 18.9% customer market share and pathetic
11.5% revenue market share.
BSNL has subscriber share of 12.7% and mere 10.2% of revenue share
Idea Cellular has 8.96% subscribers market share and 9% revenue market
share
According to Mobile India, BSNL seems to have a turnaround in its
operations as the company has added 81% more subscribers in July-2009, compared
to June-2009.
MARKET STRUCTURE
MARKET LEADER
MARKET CHALLENGER
Airtel
Vodafone
BSNL
Reliance
Idea
TATA
MARKET FOLLOWER
PORTER
13
ILLUSTRATIONS:
The responses of the Airtel officials and the consumers reveal that
Airtel attempts to achieve a competitive advantage by creating a
service that is perceived as unique.
15
GENERIC
STRATEGY:--
DIFFERENTIATION STRATEGY
ILLUSTRATIONS:
The study shows it clearly that Vodafone have a huge market share
due to its better service and good network. But the thing that
differentiate it from the competitors that it provide the more and
more number of the value added services.
Latest
advertisement
of
Vodafone:
Study clearly shows that Vodafone is a has a brand image in the mind
of public due to their willingness to provide the best service.
16
STRATEGIC ADVANTAGE:-ARRIVED AT
LOW COST POSITION
ILLUSTRATIONS:
Cost leadership strategy is not the most desirable strategy in this event, as
competitors may put intense price pressures, such that all companies would
end up reducing their prices drastically.
17
High customer loyalty towards a company's brands, which is true for the
differentiation strategy, can play a vital role in discouraging potential
entrants.
Buyers in case of differentiation strategy would have less power as there are
few alternatives available to them.
MARKETING WARFARE STRATEGIES:-
According to Al Ries and Jack Trout, there are four kinds of marketing warfare
strategies:-1. Principle of defensive strategy: --Market leader adopts
2. Principle of offensive strategy:-- Market challenger adopts
3. Principle of flanking strategy:-- Market follower adopts
4. Principle of gurilla strategy :---- Market follower adopts
PRINCIPLE OF DEFENSIVE WARFARE:
For Example:
Illustration: - its better to take business away from yourself than have
someone else do it for you. (Sacrifice short-term profits and It protects
market share)
For Example:
Illustration: - When you own the pie, you should try to Increase the size of
the pie, rather than of your slice.
For Example:19
ADOPTED
BY
MARKET
CHALLANGERS:--VODAFONE,
RELIANCE, BSNL
SUBPRINCIPLE: 1:-- The main consideration is the strength of the
leaders position.
Illustration: - Whats good strategy for the leader is bad strategy for #2,
and vice versa.
For Example:
20
Airtel is market leader in the GSM sector; here reliance came with
CDMA technology and cover the large chunk of market.
For Example:
Value added services were not too much popularizes and the mobile
were meant to call only. But Vodafone change the concept. it started
to give more and more value added service(youth targeted) and now
value added service is the main source for revenue for telecom
companies.
For Example:
BSNL captures a very big market by giving the mobile SIM free of
cost. The concept behind that was when a person have the SIM,
he/she will going to recharge that SIM, that time revenue generates.
21
For Example:
Idea was the first mobile service provider launched the 3 years
validity scheme which got a great consumer response. And by the
both above stated idea managed to grab a big market share in a short
while. Here we can say that idea move was in uncontested area.
Virgin and spice got a huge market in south India where no mobile
company was targeting and by this move they were in a position to
manage a good number of customers.
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product or service.
For Example:
Idea launch with a great 3 years validity along with plan 0-1-2-3
(Tata to Tata-zero: Tata to other-RS 1: Tata to basic-RS 2: Tata to
STD Rs 3) was a great surprise at that time.
Tata provided one hand set free with buying of one handset along
with unlimited free talk time in between both. This scheme took a
huge consumer response.
For Example:
*NOTE: - Virgin Is The New Market Entrant In The Mobile Service Provider
Which Captures Huge Market In A Very Short Time.
SUBPRINCIPLE: 1: Find a segment of the market small enough to defend.
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For Example:
SUBPRINCIPLE: 2No matter how successful you become, never act like the leader.
Illustration: -- Try to pick a segment small enough so that you can become
the leader but never act like the leader.
For example:
Virgin got a huge youth response and the figure stated clearly says
the success story of virgin as its shown in their advertisements also
which all were targeting youth only.
For example:
24
THE
SUCCESS
OF
THE
MARKET
LEADER
OVER
THE
COMPETITORS.
FACTORS RESPONSIBLE FOR MARKET SUCCESS OF
AIRTEL:
In the initial days due to high tariff rates cellular players had to impose high
call charges on their customers and the handsets were costly.
25
31,
2006,
26
PROMOTIONAL EFFECTIVENESS:
Most of the respondents said that Promotional campaign influenced their decision
to shift to the Airtel
Emotional
Humorous
attracting
27
The
following
year Airtel
adopted
the
6. HUGE NETWORK COVERAGE:A combination of the following 4-key performance indicators largely
determines the overall service quality: system coverage; call blockage; voice
quality; and dropped call rate.
System coverage
Call blockage
Voice quality
28
According to the responses obtained the most critical factor in this regards is
the fresh experience which Airtel provides to its consumers time to time.
Black berry
Facilities provided
News services
Car insurance
Fund transfer
29
For example:
In the post paid connection , as the fixed amount per month increases , the call
rate decreases simultaneously
In many cases this can only be accomplished by taking sales away from
competitors.
30
South India is not covered :--(where Aircel and Tata has the huge market),
in the rural areas also, where they can get, good number of customers by replacing
TATA and BSNL. As well as Airtel should concentrate in the south India where
Aircel and Virgin has a very good market share. So move to south India will be of
great value.
SUCCESS MANTRA OF TODAYS MARKET: SURVIVAL OF THE
CHEAPEST
RCOM could become the largest telecom company in India in terms of the
number of subscribers by adding both its GSM and CDMA numbers, if the present
growth rate continues. So this is the time to wake up for the Airtel and it should not
ignore this success mantra.
MY ANALYSIS:--According to my analysis, in the competitive
environment, every market player is loosing his profit margin, so the organizations
are trying to give more emphasis market share growth. So low profit and high
turnover is the market success mantra for market.
SITUATION OF DILEMMA: -- WHAT TO DO WHAT NOT TO DO:-If Airtel shifts to the lower price plans than it may probably loose the
confidence of elite people and higher class. So the main challenge behind the Airtel
is to retain its main consumers and simultaneously increase the rural, back word
class and mainly the youth.
31
Benefit with this move:--Airtel will not loose its popularity amongst the elite group
from where it is earning handsome amount of revenue and on the other hand, under
the umbrella of Airtel, there are great chances of huge customer response.
Airtel has enough strength to provide such kind of scheme where they
probably not getting the higher return but they can enjoy the high public
response because the consumer will have the chance to get connected with
the Indias largest mobile service provider.
32
There may be a problem that the rural customers may not be aware of the
Airtel so Airtel should try to penetrate the rural market by heavy TV
promotion of the new brand SABKA AIRTEL.
33
CONCLUSION
In the next two years, India is expected to become the 3rd largest mobile
market in the world, after the US and China and soon be in a position to overtake
the US as well. The number of service provider might come down to around five
from the present six to seven as the next phase of consolidation will take place
shortly. I see a buoyant and strong Indian telecom sector in the coming years and
every major player in the world in the telecom space trying to take his share in this
pie.
Some businesses think it is best to get on with their own plans and ignore the
competition. Others become obsessed with tracking the actions of competitors
(often using underhand or illegal methods). Many businesses are happy simply to
track the competition, copying their moves and reacting to changes. Competitor
analysis plays an important role in strategic planning. It is helpful for the
management to understand their competitive advantages/disadvantages relative to
competitors and to generate understanding of competitors past, present and future
strategies. So competitive move decides your position in the market.
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BIBLIOGRAPHY
1. www.efytimes.com/efytimes/fullnews.asp?edid=30375
2. www.bharatbook.com/productdetail.asp?id=82391
3. http://www.thehindubusinessline.com/
4. http://www.scribd.com/doc/15684486/Marketing-Report-on-Bharti-Airtel
5. http://www.slideshare.net/goel.gauravgoel/study-of-telecom-sector
6. http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy/Bharti
%20Airtel%20Limited%20and%20the%20Indian%20Telecom%20Sector.htm
7. http://www.bharatbook.com.
8. planningcommission.gov.in/reports/genrep/.../1_bg2020.doc
9. www.reportbuyer.com/.../mobile-services-to-mobilise-the-indian-telecomsector-in-future/
10. www.ficci.com/telecom.htm
11. tutor2u.net/business/strategy/competitor_analysis.htm
12. http://www.airtel.in/
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