Strategic Analysis Of

Group Company

Introduction to industry
India's telecommunication network is the second

largest in the world based on the total number of telephone users (both fixed and mobile phone).
It has one of the lowest call tariffs in the world enabled by

the mega telephone networks and hyper-competition among them. It has the world's third-largest Internet userbase with over 137 million as of June 2012.
Major sectors of the Indian telecommunication industry

are telephony, internet and television broadcasting.

Introduction to company
Flagship company of Bharti enterprises is

Bharti Airtel Ltd

There are three SBUs under it, are.

- Mobile Service - Airtel Tele-media Service - Enterprise Services.

Objectives of Bharti Airtel Ltd

Objectives
- To Undertake Transformational Projects - To Diversity in new business. - To Lay the foundation for building a conglomerate of

culture.

VISION & MISSION

VISION :
To be globally admired for telecom services that

delight customers.
MISSION Customer service focus Empowered employees Innovative services Cost efficiency

Q #1: What are the Industrys Dominant Economic Traits?

Market size and growth rate Number of rivals Buyer needs and requirements Vertical integration

Q #2: What Kinds of Competitive Forces Are Industry Members Facing?

Five Forces Model of Competition

New Entrant Threat

Extremely high infrastructure cost.

License cost is also very High.

Overall influence is Low.

Power of buyers
There is lack of difference among service provider

which increases power in the hands of buyers. There is cut throat competition in the telecom industry which again increases power in the hand of buyers. Again switching cost is low. Number portability has increased the power of the buyers. Overall, the power is in the hands of buyers is high.

Suppliers bargaining power

There are large numbers of suppliers to this industry.
The limited pool of engineers and skilled managers

has increased suppliers bargaining power. There is medium cost of switching the supplier as changing their hardware would lead to cost in modifying the architecture. Overall influence is medium.

Competitive rivalry
Exit barrier is high.
Fixed cost is high. There are 6-7 players in each region.

3 out of 4 big player including Airtel is present in each

region. There is price war. Overall the rivalry among substitute is very high.

Threats from substitute

Landline and CDMA market is diminishing.
Use of Video conferencing, VOIP(skype, gtalk, yahoo

messenger) is increasing rapidly.

Overall, the threat is medium.

Q #3: What Factors Are Driving Industry Change and What Impacts Will They Have? Types of Driving Forces
Network availability Advertisement campaigns Global expansion strategies Changing societal concerns Changes in long-term industry growth rate Changes in who buys the product and

how they use it

Product innovation Technological change/process innovation Marketing innovation

Assess impact
Are the driving forces causing demand for product to increase

or decrease? - Yes
Are the driving forces acting to make competition more or less

intense? - Yes,
Will the driving forces lead to higher or lower industry

profitability?

- Yes Low Profitability, because of more competitors and also mobile.

Q #4: What Market Positions Do Rivals Occupy?

Strategic Group Mapping

COMPANIES
BHARTI AIRTEL
BSNL VODAFONE RELIENCE IDEA TATA COM TATA TELESERVICES MTNL

( in Crs.)
PAT
5730
6457 7003 8040 5765.4 171.34 517.51 2801.92

REVENUE
38,800
30,240 23,200 22,130 11,390 11,000 6,900 3,650

TOTAL ASSETS
63,559
70,000 22,300.80 73,067 23,072 8,087.80 4,237.96 14,102.17

SWOT Analysis of Bharti Airtel Ltd

Strength:-

Bharti is very focused on telecom industry.

Leadership in telecom industry with over 88 million

customers. The only Indian operator other than VSNL that has international submarine cable.

SWOT Analysis.
Weakness:-

Price competition has increased with other

competitors. Untapped rural market, most of which is covered by BSNL.

SWOT Analysis.
Opportunities:-

Latest technology and low cost advantage.

Huge market. Low broadband penetration.

SWOT Analysis.
Threat: Falling annual revenue per unit. Competition from other cellular companies. Saturation point in basic telephony service. Mobile number portability may result in switch over of

customer to other competitors. Vodafone has advantage in 3G service than airtel since it has experience of running the 3G service in other countries.

Generic Strategy
Narrow Market Scope

Broad Market Scope

Differentiation Strategy

Low Cost Strategy

Generic Strategy
Existing Product
Existing Market
Market penetration - Mobile Service - Broadband - DTH Market Development - Mobile Services

New Product
Product Development
- 3G Diversification

New Market

Differentiation Strategy

Low Cost Strategy

Complementary strategy
Alliances/Partnerships
To extend its reach in India's rural markets, Bharti Airtel is

focusing on innovative initiatives, including efficient infrastructure deployments, expanding its distribution network via partnerships, and customized content and tariffs.

To expand coverage into rural regions, Bharti Airtel is

sharing passive infrastructure services with Vodafone (42 percent ownership) and Idea (16 percent ownership) through its joint venture, Indus Towers. Sharing the infrastructure cost and usage between multiple operators has helped Bharti Airtel to reduce its operating and capital expenses.

Complementary strategy
Joint venture
Bharti Airtel also formed a joint venture with the Indian Farmers

Fertilizer Cooperative Limited (IFFCO). Its joint venture, IFFCO Kisan Sanchar, uses IFFCO's wide rural presence (present in 80 percent of Indian villages) and appeal among the rural agricultural community to market and distribute Bharti's products.

IFFCO Kisan Sanchar provides subsidized handsets and

connections at competitive rates in rural areas. It also helps Bharti Airtel to identify and acquire suitable locations for deploying its cell sites. In addition, it offers tailored services including voice-based updates on crop prices, farming techniques, rural health initiatives, and "help line" services

Strategy Options for Competing in Emerging Industries

Bharti Airtel is pushing hard to improve Technology

& improve Product Quality (Services).

Focus on Advertising

- Increase frequency of Use. - Creating brand Loyalty.

Strategy Options for Competing in a Mature Industry

Strong focus on Cost Reduction

Increase sales to present customers

Expanding Internationally Emphasize Innovation in the value chain.

Market Leader
Fortify-and-Defend Strategy
1. Increase advertising and R&D

2. Provide higher levels of customer service

3. Add personalized services to boost buyer loyalty 4. Keep prices reasonable and quality attractive 5. Invest enough to remain cost competitive

Diversification in Related Industry

Joint Venture
Beetel Teletech Limited Bharti Infratel Limited

Indus Tower is a joint venture between

- Vodafone Essar (42%) - Bharti Group (42%) and - Aditya Birla Telecom Limited (16%) It is Indias leading mobile towers company

Unrelated Diversification
Company Name
Bharti AXA General Insurance Bharti Retail Bharti Walmart FieldFresh Foods Pvt. Ltd Bharti Realty Limited

Industry
Insurance Retail Industry Retail Industry Retail Industry Real Estate Industry