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It is an ETOP, PESTEL, SAP, and SWOT Analysis of TATA DoCoMo
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Strategic Analysis Table of Contents ENVIRONMENTAL THREAT OPPORTUNITY PROFILE........................................................................................................... PORTER’S 5-FORCE ANALYSIS............................................................................................................................................. PESTEL ANALYSIS................................................................................................................................................................ STRATEGIC ADVANTAGE PROFILE...................................................................................................................................... SWOT ANALYSIS................................................................................................................................................................. APPENDIX...........................................................................................................................................................................
Strategic Analysis to TATA DoCoMo International Leverage the global scales by entering new markets for offsetting the decreasing growth rate in Indian market. Also, tie-ups with International telecom firms would result in improving service quality & innovation. Results are first push based E-mail service, SMS, Route Finder & Smart Pilot of Tata DoCoMo after its pact with NTT DoCoMo & Navteq, to be the best in business in providing out-of-the-box services. Supplier Need of infrastructure for providing better networking and need of content providers for launching value added apps & VAS is increasing in the industry Tie-up with Huwaei to set up 3G network in 5 of its circles. Tie-up with ZTE to provide low cost dongles, Data Cards keeps DoCoMo at a advantage position. Technology Enables to provide high quality uninterrupted services and also bring in new apps towards luring customers. First Indian private operator to launch 3G services. Already conducted 4G trials in physical geographies. Launched i-Mode, a mobile based internet platform service which was an instant hit. PORTER’S 5-FORCE ANALYSIS Factor Analysis Effect on Tata DoCoMo Strategic Implication Inter-firm rivalry Little differentiation between competitor’s products and services resulting in cut throat competition in order to steal customers by means of price wars.
Tata Docomo came up with the innovative pricing strategy of charging tariff per second in a bid to get as many customers as possible. Competitors soon followed suit and matched the tariffs offered by Tata Docomo. However it did have a first mover’s advantage. Bargaining power of buyers Bargaining power of consumers is very high because of the large variety of choices available and all the telecom operators providing similar coverage and services.
Customers are price sensitive in this sector. As churn rate is high and switching cost is low, attractive Tariff is just not enough and has to be backed by superior service quality. Continued on next page… Factor Analysis Effect on Tata DoCoMo Strategic Implication
Strategic Analysis Bargaining power of suppliers Suppliers: Technological support, equipment makers, fibre optic cable manufacturers. Very less substitutes and high competition in the sector leave fewer options.
As the choice of suppliers is very less viz., Huwaei, ZTE. It’s an advantage to have a joint venture with supplier like NTT DoCoMo, there by gaining technological support to bring our innovative products, services. Threat of New entrant No barriers related to capital investment (as leasing of towers can be done) & brand loyalty. Only barrier is gaining spectrum access and low tariffs
Introduce fresh services where customer can find value immediately to build a customer base and retain them, as a new entrant penetrative pricing policy hurts unless it is having deep pockets Threat of substitutes Substitutes: VOIP, Satellite phones, Online chat, Email. Presently mobility, penetration and price are issues against them.
Can be put to good use if telecom operators introduce special packages for utilizing their internet service over high end mobile phones to access emails, Skype, social networking. PESTEL ANALYSIS Situation Analysis Test for TATA DoCoMo Strategic Implication Political Not favourable in terms of spectrum allocation and an uncertainty still prevails if TTSL’s request for obtaining additional spectrum for 39 districts in Delhi will be approved or not. Need to face hardship for obtaining timely spectrum. Due to unearthing of the 2G scam there would be tighter audit and control. As a policy of the TATA Group no form of corruption is appreciated or adopted. Other competitors might indulge in lobbying activities and get undue advantages. Economic Teledensity has improved from under 4% in March-01 to around 53% by the end of March-10. The mobile subscriber base has grown from under 2Mn. at the end of FY 00' to touch 584Mn. at the end of March-10. Secular increasing macro trend. Further penetration is possible in rural areas. While intense competition is making the margins wafer thin, company will have to offer more value to customers and increase the subscriber base by aggressive marketing and technological advancements. Continued on next page… Situation Analysis Test for TATA DoCoMo Strategic Implication
Strategic Analysis STRATEGIC ADVANTAGE PROFILE Function Analysis Strategic Profile Marketing It was the first to launch 1paisa /sec and this is applicable for both prepaid and postpaid connections. Leveraging Tata Indicom's distribution-channels. It has launched a popular advertisement campaign “Keep It Simple Silly” and hired Ranbir Kapoor as the brand mascot to allure the young population base which contributes to maximum sales for telcos. To "Keep It Simple" be it services, products, tariff plans or customer care grievance redressals. Finance 11% of market share, 4th largest in India. EBITDA for each customer was around Rs. 75 which was much less than industry average of 110 -120. Tata DoCoMo recently increased its tariff rates according to its innovative tariff process and achieves its breakeven by 2014. Monitoring Operating Profit per customer and bringing it to the industry benchmark level. Either through rate hikes or through increased usage of VAS by its customers. R&D Tata Docomo already invested about Rs 9, crore in the past two years for the GSM network rollout across the country. NTT DoCoMo is planning to add a R&D centre in India to produce value added services and applications for GSM and CDMA mobiles. A merger or acquisition could also be on the cards for Tata DoCoMo. Business Line reported it may choose inorganic growth. First to launch 3G & first to conduct physical 4G trials in India. Has advantage over its peers in R&D, as it can leverage its relationship with NTT DoCoMo, which is known for innovation & technology. Production and Operation Rated Congestion free, Innovative tariff plans (pay per second), first to introduce 3G, bilateral agreement with different operators to share network Better network utilisation by sharing network with other operators and at the same time making sure that the network remains congestion free. Human Resources Set up an institute in record 6 years, PMS was designed, won various HR awards for its HR policies Shared values of TATA group keep the employees focussed & motivated. TTSL was conferred Awards for ‘Best-in- Class HR Practices’ from the HRD congress 2010.
Strategic Analysis SWOT ANALYSIS Strenghts Weakness 1.First to introduce secs tariff & half paisa per sec plan 1.Weak customer service leads to customer erosion 2.Good advertising,"Keep it simple silly"campaign 2.Service centre issues also prominent 3.High brand visibility because of TATA umbrella. 3.Untapped Rural Market 4.Flexible plans attract customers across diff segments 4.Price Higher than BSNL and MTNL 5.Assistance/ JV from NTT Docomo (Japan) 5.Signal strength in few areas is major concern 6.An array of VAS to satisfy market demands 6.Post paid connections are unavailable as of now. 7.Strong Positioning-Affordable pay only as per use plans 8.Market tieups with leading telecom equipment brands. 9.Youth appeal Opportunities Threats 1.Fast expanding cellular market 1.Competitors low price offering 2.Latest and low cost technology
Strategic Analysis
