Professional Documents
Culture Documents
Digi
(2.5G) and later EDGE (2.75G) in Malaysia on 14 May 2004. Digi primarily
uses the 1800 MHz band for GSM with the network code of 502-16.
Digi is listed on the Bursa Malaysia under the Infrastructure category act.
It uses the native dialling prefix identifier of "010", "016", "0143", "0146"
and "0149", although with the implementation of Mobile number
portability mandated by the Malaysian government this does not apply to
subscribers who switched from their old mobile service provider over to
Digi. At the moment, switching to Digi is free.
1.1.2.
Celcom
Axiata
Celcom
Berhad,
DBA
Celcom,
is
the
oldest
mobile
the
Mobile
Numbering
Portability
by
the
Malaysian
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1.1.3.
Maxis
Berhad
Maxis
is
communications
service
provider
in
Malaysia.
entertainment.
They
provide
multi-channel
customer
service;
Telekom Malaysia
Malaysia
Berhad
DBA
(TM)
is
Malaysias
leading
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1.1.5.
Redtone
Time
TIME dotCom (TIME), listed on the Stock Exchange of Malaysia since 2001,
is a fixed line telecommunications provider that connects businesses and
homes by harnessing the talents of the most capable people and the latest
available technologies.
Based in Kuala Lumpur, TIME offers a full suite of domestic and
international connectivity, and data Centre solutions to the Wholesale,
Enterprise and SME & Consumer markets.
We also deliver pure fibre home broadband services at speeds of up to
500Mbps to consumers in Malaysia the countrys fastest.
It specialties is fixed-line telecommunication provider primarily focused on
the Wholesale and Enterprise segments, providing customers with nononsense Data and Internet connectivity.
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1.2.
Vision
Mission
Digi
To be a company
that is always
'Changing the
Game'.
Celcom
To become the
finest enterprise in
the country
Maxis
To be Admired for
excellence
To make life and
business easier,
for a better
Malaysia
Telekom
Malaysia
Redtone
Time
To provide
effective, efficient
and reliable
solutions for all
communication
needs
To be a global one
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1.3.
COMPANY
DIGI
CELCOM
COMPARATIVE ANALYSIS
MISSION STATEMENT
VISION
1
2 3 4 5 6 7 8 9
ANALYSIS
Statement is too
vague; it should
reveal how the
telecommunicati
on industry
benefits
Good statement
MAXIS
Statement too
vague, it should
reveal the type
of business
TELEKOM
MALAYSIA
REDTONE
Statement too
vague, it should
reveal the type
of business
Good statement
MISSION ANALYSIS
The mission statement lacks two statements characteristics: Philosophy (6) and
Employees (9); (42words)
7/9 or 77.78% mission statement characteristics of Digi fulfilled the mission
statement components.
Statement too
vague, it should
reveal the type
of business
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DIGI
CELCOM
HIGH
Because there are good
competitor like Celcom and Digi
HIGH
This caused by the current
competitors of the same product.
The rivalry among firms in an
industry is high when there is
fierce competition.
THREAT OF
NEW
ENTRANTS
LOW
Huge License Fees to be paid
upfront & High gestation period
and Entry of MVNOs & WiMAX
operators.
THREAT OF
SUBSTITUTI
ON
HIGH
Because of d iminishing market
and Mobile Operator. Many
Broadband Services and Video
Conferencing has been offer by
other company.
LOW
Entry of new competitor is will
intense the competition in the
industry and it has low of threat of
new entrants because they only
have several barriers.
HIGH
Celcom has used customerorientation strategies to deal with
the threat of substitutes in order
to make the customers happy.
SUPPLIER
POWER
LOW
Network Outsourcing maintenance
HIGH
Increasing standardization and
MAXIS
LOW
Therefore, rivalry among
competitors telecommunication
industry is oligopoly structure and
the level of competition is low
one. Maxis have two main
competitors, they are Digi and
Celcom.
HIGH
Due to high expectations and
standards that come with the
Maxis brand it is not without
reason that customers are more
demanding of Maxis.
HIGH
Maxis have many substitutes for
mobile industry. Hence, threat of
substitutes exists when a
product's demand is affected by
the price change of a substitute
product.
LIMITED
Maxis' networks utilize standard
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BUYER
POWER
HIGH
Lack of differentiation among
Service Providers also cut throat
competition.
Also low switching costs and
number portability will have
positive impact on businesses and
consumers
commoditization of network
components leads to competition
among component suppliers, thus
lowering supplier position.
HIGH
Due to pressures on their
profitability, service providers
lowering their operating costs and
capital expenditure.
HIGH
Advance of technology could
increase the bargaining power of
buyer, high available of
information make it easier for
buyer to evaluate sources of
materials about
telecommunication.
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2.1 DIGI
2.1.1
Competitive Rivalry
In the wireless market in Malaysia, Digi only own 21.7% market share
between Celcom and Digi. This is because Celcom gain highest margin.
However, Digi still maintain the stable sales and profit margin. From the
analysis, Digi got a high competitive rivalry.
2.1.2
Threat of Substitution
Redtone has appeared. Digi also offer many Broadband services such as
P1, Yes, Video Conferencing and many more.
2.1.4
Supplier Power
The information system of Digi is IBM, Huawei, and Nokia Siemens only.
2.1.5
Buyer Power
Other than
that, it become high because low switching costs but still the number
portability will give a positive impact
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2.2 CELCOM
2.2.1
Competitive Rivalry
This caused by the current competitors of the same product. The rivalry
among firms in an industry is high when there is fierce competition and
low when there is not. The current competitor is Digi and Maxis.
To increase the rivalry of competitors, Celcom will be using the innovation
strategies by co-operating with Axiata Group Berhad, Asia Mobility
Initiative (AMI), and Vodafone Group whore the business alliances of
Celcom. Axiata Group Berhad is a vehicle overseeing and managing its
overseas subsidiaries an emerging leader in Asian communication. AMI is a
regional mobile operator alliance. Celcom will be strengthening its regional
presence across Asia by joining AMI in 2005. Besides that, market share of
it will be protected and increased in the respective home markets and at
the same time improve profitability. Other than that, Vodafone is the world
foremost mobile telecommunications company and having a significant
presence in Europe, the Middle East, Africa, Asia Pacific, and the United
States.
coverage, the lowest International Direct Dial and roaming rates, and the
latest mobile technologies by Vodafone Group. It also gives Celcom
admission to Vodafones global purchasing and economies of scale.
Compared to normal broadband which delivers bandwidth through wired
and wireless technologies at network speeds ranging between 256Kbps
and 4Mbps, High Speed Broadband (HSBB) is a broadband service that
offers bandwidth delivered at network speeds at 10Mbps and above.
It
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2.2.2
Similarly,
of
Telecom
Operations
and
Management
Systems
to
provide
Celcom
with
comprehensive
Mobil
infrastructure
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2.2.3
Threat of Substitution
into
highly-individualized
lifestyle
tools.
These
cards
are
all three value-added services. However, the new SIMs also has the
potential to perform downloading of applets Over-The-Air, allowing users to
re-program cards in the field.
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2.2.4
Supplier Power
The bargaining power of suppliers refers to more suppliers a firm has, the
greater control it can exercise over its suppliers. The bargaining power of
suppliers is high when buyers have few choices and low when buyers have
many choices. Bargaining power of supplier will affect the intensity of
competition, especially if there are huge of supplier, less availability of raw
material and the cost of switching supplier or raw material is high. These
attributes in the industry gives power to the supplier to enforce term and
conditions on manufacturer and charge high cost of raw material. In
telecommunication Services Company, increasing standardization and
commoditization of network components leads to more competition
among component suppliers, thus lowering supplier bargaining position.
Besides that, overcapacities have led to lower bargaining power of
Semiconductor suppliers.
Celcom uses lock in suppliers strategy to encourage the suppliers to stay
with Celcom rather than going to their competitors. Many suppliers in
Malaysia are more capital oriented than service oriented. "More-for-more"
marketing strategy is the strategy which the suppliers can provide you
with the best for the highest cost. This makes the purchasing power to be
vested more on the hand of the market leaders, and this is another
competitive advantage Celcom has over its competitors in the Malaysian
market
2.2.5
Buyer Power
Generally, the bargaining power of buyers is high when buyers have many
choices and low when buyers have few choices. Consolidation among
communication service providers due to convergence leads to greater
dependence on a few large clients, which means higher bargaining buyer
power. Due to pressures on their profitability, service providers are
increasingly looking at lowering their operating costs and capital
expenditure. Besides that, with increased choice of telecom products and
services, the bargaining power of buyers is rising. Telephone and data
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Biz will take over the role to offering its service on hosting the PABX
system and facilities to its corporate customers. The Virtual PABX system
integrates quickly, easily with existing phone lines plus hardware, and can
also be used in conjunction with other mobile and smart phones. It does
not require any additional hardware installation as all the Virtual PABX
hardware is supported and maintained at Celcom.
Therefore by reducing the bargaining power of buyer, Celcom is ensuring
that their customers remain loyal to them and attracting new customers to
use their products.
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2.3 MAXIS
2.3.1
Competitive Rivalry
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2.3.2
Companies in this industry required high fixed costs and spend relatively
large
on
network
equipment
and
maintain
development.
Besides,
in
the
industry.
However,
telecommunication
is
high
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2.3.3
Threat of Substitution
Maxis have many substitutes for mobile industry for instance from
traditional way which are using the letter, fixed home line telephone, fax
and email to communication with other people till currently mostly
everyone using broadband Internet services, which enable faster and
always-on connection to the worldwide web, offer more promising growth
potential.
Furthermore, the pressure on the very low cost to use the phone calling via
internet or communicate via online messenger had threatened the mobile
industry. The attractiveness of internet services making it more affordable
to the masses. For example, nowadays many people using MSN, Facebook,
Skype to communicate or wishing for festival via online rather than use
hand phone to send it.
Threat of substitute product also will directly affect the profitability of
Maxis. Substitute product is the product or services in other industries that
is different from the existing product or services but serves the similar
needs. Hence, threat of substitutes exists when a product's demand is
affected by the price change of a substitute product. This threat is
supposed to be a strong point for Maxis because these substitute products
such as letter or e-mail are unable to fulfill or completely replace the
mobile services.
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2.3.4
Supplier Power
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2.3.5
Buyer Power
the
moment,
high
level
of
competition
between
the
major
can
be
make
Maxis
became
profitability
or
fruitlessness
in
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Technology
Asset Leverage
Strong Management
Customer Loyalty
Innovation
Emerging Markets
Financial Leverage
COMPETITIVE
IMPLICATION
ECONOMIC
IMPLICATIONS
COMPETITIVE
EQUALITY /
PARITY
ABOVE NORMAL
TEMPORARY
COMPETITIVE
ADVANTAGE
ABOVE NORMAL
UNUSED
COMPETITIVE
ADVANTAGE
NORMAL
LONG-TERM
COMPETITIVE
ADVANTAGE
NORMAL
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HSSB initiative
RESOURCES / CAPABILITY
Domestic market
Outstanding reputation
Protection solution product
COMPETITIVE
IMPLICATION
ECONOMIC
IMPLICATIONS
COMPETITIVE
EQUALITY /
PARITY
BELOW NORMAL
TEMPORARY
COMPETITIVE
ADVANTAGE
UNUSED
COMPETITIVE
ADVANTAGE
ABOVE NORMAL
(at least for
some amount of
time)
NORMAL
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Venture Capital
RESOURCES / CAPABILITY
Global markets
New acquisition
LONG-TERM
COMPETITIVE
ADVANTAGE
ABOVE NORMAL
COMPETITIVE
IMPLICATION
ECONOMIC
IMPLICATIONS
COMPETITIVE
EQUALITY /
PARITY
NORMAL
TEMPORARY
COMPETITIVE
ADVANTAGE
NORMAL
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Customer Loyalty
Venture capital
Emerging Markets
UNUSED
COMPETITIVE
ADVANTAGE
ABOVE NORMAL
(at least for
some amount of
time)
LONG-TERM
COMPETITIVE
ADVANTAGE
NORMAL
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3.4 CONCLUSION
The VRIO Analysis is an analytical technique, which for each type of
resource considers several evaluation dimensions for the organization as
well as for its competitors. VRIO is an acronym from the initials of the
names of the dimensions: Value, Rareness, Imitability, and Organization.
From the analysis, The VRIO framework, in a wider scope, is part of a much
larger strategic scheme of a firm. The basic strategic process that any firm goes
through begins with a vision statement, and continues on through objectives,
internal & external analysis, strategic choices (both business-level and corporatelevel), and strategic implementation. The firm will hope that this process results
in a competitive advantage in the marketplace they operate in.
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