Strategic Analysis of the Current Status of Aktel Mobile

Strategic Analysis of the Current Status of Aktel Mobile â€Å"Strategic Analysis of The Current Status of AKTEL Mobile Regarding Marketing HR Division† Executive Summary According to the Industry Life Cycle, the operation of TMIB in Bangladesh, as it seems, is still in the growth stage. So the investment of TMIB in the prepaid section has been speculative since the last couple of years. This survey was conducted among the current customers of AKTEL, both pre-paid and post paid. About 10 years back there was only BTTB to offer telecommunication services to the market in Bangladesh. Although there was tremendous market demand, due to the government lack of initiative in this promising sector was not invested enough and the government deprived itself of lots of revenue, which it could have earned easily. In 1990 for the first time the government allowed the private sector to invest in the telecommunication sector especially in cellular, paging, trunk radio and rural telecom services. The early operators skimmed the cream, like City Cell in cellular services, Sheba Telecom in rural telecom and Bangladesh Telecom Ltd. in Pager services for a long time. In 1996 the govt. provided licenses to 3 companies to operate GSM service in Bangladesh. These companies TM International (BD) Ltd. (TMIB), Grameen Phone (GP) Sheba Telecom came in the market with a very competitive tariff structure and the market accepted them very eagerly. Since then TM International (BD) Ltd. TMIB), a joint-venture company formed between Telecom Malaysia Berhad, holding 70% of the equity capital and 30% local shareholding by A. K. Khan Co. Limited, branding its services on the name of AKTEL in Bangladesh. It is a company incorporated in Bangladesh with the objective of offering the state of the art and modern telecommunications services to the People of Bangladesh at competitive price. Keeping this objective in mind, the management of TMIB has been trying to achieve continuous improvement in its product offerings and services. To accelerate this process of continuous improvement and to Know more about the expectations of the market, the need for a research on customers perception towards its present products and services is obvious. By analyzing the consumer perception towards the products and services of AKTELs various Packages of TM International Bangladesh Limited is full of complexity. In the context of a developing country like Bangladesh, the need for marketing of products through consumer perception analysis provides a very important dimension for an organization to improve their services. The policies and practices in the matter of analyzing the behavior of customers, becomes an important factor in this research. And how the employees get aware to achieve the target of AKTEL is the main objective of this report. Thus, the customer perception towards the various packages of AKTEL is very crucial because its a must for the authority of TMIB to know about the customers feedback of their current market activities and its effectiveness. By carrying out this survey the organization will get the opportunity to know the customer feedback as well as how they can modify their present marketing activities. In turn they will be able to formulate some guidelines for modifying the current market mix, and if necessary to make it more effective so that they can attract more customers. 1. AKTEL: An Organizational Profile Overview of the Company AKTEL is a mobile operator, which concentrates on offering GSM communication services for private and corporate customers. Their intention is to promote the wireless lifestyle-the complete mobile society. TMIB is in the GSM Telephony business. With the technological development in future, TMIB will adopt cost-effective and more effective technology to provide a state of the art and comprehensive service to its customers. TMIBs vision is to continuously monitor its customers needs, wants and to plan accordingly. It will monitor the development of the technology and update itself to meet customer needs. Background/Historical Summary TM International (Bangladesh) Limited (TMIB), a joint venture company of Telekom Malaysia Sdn. Bhd., of Malaysia and A. K. Khan Company Ltd. of Bangladesh has started its commercial operation in Dhaka, the capital city of Bangladesh as a GSM 900 cellular phone operator on 15th November, 1997. A tremendous success in Dhaka, TMIB has started its operations in Chittagong on March 26, 1998. TMIB uses the Global System for Mobile (GSM) communications as the digital cellular system, which is fully featured with services like Basic Telephony, Data and Value Added Services, (VAS). TMIB has an integrated and fully computerized Customer Care Billing System (CCBS) which supports virtually all subscriber-related functions. The Company AKTEL of the Telekom Malaysia Bangladesh, with a full title being: Mobil Telecommunications was founded as a joint company of the Telekom Malaysia Sdn. Berhad from Malaysia and the A. K. Khan Co. of Dhaka, Bangladesh. It operates as a Limited Liability Company, w here a founder and a majority shareholder, the TMIB- member of the Telecom Malaysia, owns 70% shares, while the minority shares of 30 % are being controlled by the A. K. Khan Co. Bangladesh. The organization is headed by its Chief Executive designated as the Managing Director entrusted with overall responsibilities of business direction of the organization and leading dynamically towards the attainment of its Vision, Mission and Goal. In attaining the above mission, the MD is assisted by 4 general managers TMIB has established a strong and formidable sales channel, which consists of direct dealers and its own sales force. TMIB is the Digital Cellular Telephony Business. With a technological development in future, TMIB will adopt any cost effective and more efficient technology to provide state of the art and comprehensive service to its customers. TMIBs vision is to continuously monitor its customers needs and to plan accordingly. It will monitor the development of technology and u pdated self to meet customer demand. 2. Mission Statement Of AKTEL AKTELs Vision: To be the most preferred GSM cellular provider in Bangladesh AKTELs Mission: To provide total customer satisfaction the company strives to become the most preferred GSM cellular service provider in Bangladesh. TMIB will achieve this through developing people, products, and services of the highest quality and meeting the needs of its customers, employees, shareholders, and the nation. AKTELs Theme: Customer First 3. The Marketing Strategies of TMIB Marketing Strategies: TM always wants to achieve the desired sales growth and customer base. TM wants to encourage the existing customers to use more of their services. They launched a package called AKTEL EID DOUBLE BONUS which was one of their successful initiatives for obtaining potential customers. Product Positioning Initially TMs target was to reach the top, but other mobile operators are also targeting to the grass roots level and thus increasing their customer base. TM wants to be the leader with good quality and designing products for the middle and lower middle class range too. Marketing Mix: Product  ¨ Continuous improvement of quality  ¨ Repositioning of slow moving products to different target markets  ¨ Always branding AKTEL with all packages with a GSM service Price  ¨ Necessary changes in tariff structure, and changes and terms and conditions.  ¨ Penetration pricing in the face of competition  ¨ Skimming policy possible Promotion  ¨ Brochures with all necessary info  ¨ Press ads  ¨ TV commercials (in future)  ¨ Billboards Place/Distribution  ¨ Make effective use of distribution  ¨ Make product service delivery system more effective and less time consuming  ¨ Wider distribution network to make service more accessible. 4. The Company in Bangladesh Chain of Command The organization is headed by its Chief Executive designated as the Managing Director entrusted with overall responsibilities of business direction of the organization and leading dynamically towards the attainment of its Vision, Mission and Goal. In attaining the above mission, the MD is assisted by 4 general managers TMIB has established a strong and formidable sales channel, which consists of direct dealers and its own sales force. The way TMIB Defines Business TMIB is the Digital Cellular Telephony Business. With a technological development in future, TMIB will adopt any cost effective and more efficient technology to provide state of the art and comprehensive service to its customers. TMIBs vision is to continuously monitor its customers needs and to plan accordingly. It will monitor the development of technology and updated self to meet customer demand. Long-Term Vision of the Company: AKTEL strongly believes that subscribers are their most valuable assets. They have a strong Customer Service Center. To always be with their customers the AKTEL Help Line is there. AKTEL has successfully migrated to a new switch with higher capacities in terms of accommodating higher customer base and as well as to let them use all the basic supplementary services under GSM technology. TMIB expertise and experience are acknowledged throughout the industry. Demand is growing all the time, not simply for the services it already provides, but for greater and more diversified services and even higher quality performance. Its pace is fast, rewards are high and work is of constant challenge. They introduced the both-way national roaming all through their network coverage. The Prepaid services with enhanced features have been commercially commenced successfully and now they are taking some projects to accumulate more advanced technological features in their network. In terms of Network Qual ity, the company will ensure not only the equipment are of world class standard but more importantly its size or capacity is catered to the right dimensioning of customer base, in order not to face the problems of drop calls or congestion. All these are done through proper planning, control and schedule maintenance program. They maintain the benchmark for providing the quality services. They monitor these through generating regular reports and on site survey. If there are any weak signals or a call drops, the skilled engineers are providing services round the clock to resolve the problem instantly. The most important key resource factor in TMIB is its efficient human resource. Moreover, its decisions are based on facts from market research and coverage survey. Moreover, the above objectives can only be achieved through the right people. AKTEL has put its keen eyes in developing its employees through proper training, as they believe that the most important asset for TMIB is its staff members. So they are ensuring quality services by quality people. TMIB has the plan to give opportunity to every household in using cellular service in the country at the competitive price providing unparalleled quality service and customer care. In achieving this goal, they cant wait for more interconnection facilities with the fixed network. TMIB is planing to enforce their strong efforts to create their own independent network. They have already started the Dhaka-Chittagong AKTEL backbone. The future plan is to vigorously expand the network, which was called cell to cell expansion, covering almost all the regions of Bangladesh within the year 2005. Global Mission of the Company: AKTEL wants to provide its customers the best quality service in terms of: Trusted technology around the world Wide coverage with digital clarity Digital security with peace of mind Various choices of value-added features Better customer service-not just promised, but delivered Competitive rate and better billing Objectives of the Company: Total commitment to the needs of customers To follow the highest ethical standards Continuous improvement of all work processes Permanent improvement of all the employees knowledge and skills Securing the quality of the service to match the quality of service offered by the worlds most successful companies in the field Preserving the companys leading position in the national market of mobile Telecommunications. 5. Mission In Bangladesh TMIB as a Venture TMIB is a company incorporated in Bangladesh with the objective of offering the state-of-the art and modern telecommunications services to the people of Bangladesh at competitive prices. TMIB is a joint venture company formed between Telecom Malaysia Berhad and A.K Khan Company Ltd. The Business Slogan -Clearly Ahead The whole is the sum of parts and when the best come together the results can be truly spectacular. TMIB brings AKTEL Mobile phone service, a digital cellular phone service, which will prepare better for life in the fast lane. AKTEL GSM always keeps so near even when so far. AKTEL GSM wants to provide the following in order to ensure that they can gain potential customers as well as market share: The technology trusted around the world Wide coverage with digital clarity Digital security with peace of mind Various choices of value added features Better customer care not just promised, but delivered Competitive rate and better billing. 6. The Marketing Area of TMIB Advertisement and Promotion: AKTEL GSM are trying to convert non users to mobile phone users stressing the benefit of GSM services, and with the service benefit of AKTEL that will make their life easier. To serve the market more accurately their target market will be further segmented based on psychographics and business sites. The strive to develop a better product will be a continuous process. Conducting of market research will be held every 3 months. They will use their import to develop new products based on the data they will get from survey. Thus the product will be designed to meet the customers need. AKTEL has a wide variety of promotional activities. The promotional mix includes T.V., radio, newspapers, magazines, flyers, brochures, etc. AKTEL has also put up billboards at certain strategic locations in order to attract customers as well as give their products and services a boost so that they can increase their customer base. AKTEL branding has been carried in order to bring about its brand awareness. They are trying to identify AKTEL as a unique product so that it can be differentiated from its competitors. Billboards are there to attract attention and appeal to customers so that they are aware of AKTELs products and services. Mostly billboards have been put on main roads and some major shopping centers around Dhaka city like Eastern Plaza, where mostly the younger generation hang out. This in turn would attract that segment of customers within a specific age group, i.e. teenagers and people in their early twenties, as this generation has the urge to communicate frequently and be up-to-date on recent events. Thus, by promoting their products and services through these various media, electronic as well as press advertisements, AKTEL can well be in the way of obtaining its vision and so resulting in a higher subscriber base and in turn a higher potential market share. The marketing division distributes leaflets or brochures so those new customers can find out information about AKT ELs various packages and choose from among them. The Promotional Activities of AKTEL: Cellular phone service: TMIB brings customers the AKTEL mobile phone service. Fully digital cellular phone services that will prepare customers better in their day-to day activities, thus making their lives easier. AKTEL has been successful in bringing together the world leaders in various technologies, giving Bangladesh world class cellular phone service. Better Billing: Always keeping customers so near even when they are so far. AKTEL has been successful in bringing together the world leaders in various technologies. Better Switching: AKTEL cellular switching system provides the customers the state-of-the-art GSM technology, which will give customers the winning edge all the way. SIM-Card Identity Number: With the AKTEL Cellular Phone service, customers will have more than just a number. Simply because the GSM lays emphasis on the subscriber identification module (SIM) card, a key component of the whole process. It is computer chip card, which is highly secured against fraud. A microchip embedded in the plastic card stores PIN (Personal Identification Number), code personal phone directory, and details of call made. As a result, the customers can use a SIM card on any GSM 900 phone. So, even if the customers cellular phone is not handy, the customer borrows another one, insert their SIM card and its business as usual. This electronic smart card also contains a unique PIN just as an ATM card does in order to prevent misuse as it can fall into wrong hands. Consistent and High Voice: People who listen to music on CD are aware that digitized music may result in sharper and clearer audio quality. With GSM too, digitization of voices is done, therefore maintaining high quality. Security: It is almost impossible for anyone to tap or listen in on a conversation in the AKTEL cellular network. Digitization encodes speech and dynamic allocation of frequency makes it impossible for outsiders to enter a call. Incidentally, the technology that makes it possible for individual to talk better also makes it for anyone to intrude on their privacy audio quality. With GSM it is also possible for digitization of voice so that high quality is maintained. Exciting AKTEL Service: AKTEL offers a very comprehensive range of value added services for those on the move. Each service is designed to help the customers in specific frequently encountered solutions. Services like these will surely revolutionize the way customers communicate. AKTEL Itemized Billing: This service entitles the customers to a detailed bill with an accurate breakup of the call charges, including the date, duration and numbers of incoming and outgoing calls. This is extremely handy in cases where the customers wish to keep track of expenses, or even to find out whether their card is being misused or not. International Roaming: The AKTEL mobile service will provide the customer with contractibility and the freedom to make and receive telephone calls to those GSM networks all over the world that have roaming agreements with AKTEL. So whenever a customer is within the service areas of these GSM networks, they will still be able to keep in touch with friend and family around the world. Choice of Handset: The AKTEL network has a chain of outlets where all the leading models makes accessories of GSM compatible mobile phones available. However, subscribers are free to procure their GSM cellular phones from any other source within the company or abroad provided these are duly paid and would connect to the AKTEL network. Distinctive Competence: The most important key source factor of TMIB is its efficient human resource. It is using the state-of-the-art GSM technology and continuously monitoring its network traffic to ensure network quality. Moreover, its decisions are based on facts from market research and coverage survey. The company also monitors its competitors activities and is proactive in marketing decisions. 7. Summary of the Case The author had a chance to work at the Human Resources Division of TMIB. As the division has played a vital role to achieve the companys goal, it is yet to develop its role. It has many projects on hand and yet it also has been monitoring various projects that have been implemented in the past. So the task was to delve deep into the present marketing scenario and conduct an in-depth analysis of the HR activities, i.e., their recruiting process, candidate selection, organize the interviews by preparing the evaluation sheet, compile each individuals file after joining the employees, updating the database after every recruitment. About 10 years back there was only BTTB to offer telecommunication services to the market in Bangladesh. Although there was tremendous market demand, due to lack of initiative on part of the government, this promising sector was not invested enough and deprived itself of lots of revenue, which it couldve earned easily. In 1990, for the first time the government allowed the private sector to invest in the telecommunication sector especially in cellular, paging, trunk radio and rural telecom services. The early operators skimmed the cream, like Citycell in cellular services, Sheba Telecom in rural telecom and Bangladesh Telecom Ltd. in Pager services for a long time. In 1996 the government. provided licenses to 3 companies to operate GSM service in Bangladesh. These companies which are Telekom Malaysia International (BD) Ltd. (TMIB), Grameen Phone (GP) Sheba Telecom came into the market with a very competitive tariff structure and the market accepted them very eagerly. Since then TMIB, a joint-venture company formed between Telecom Malaysia Berhad, holding 70% of the equity capital and 30% local shareholding by A. K. Khan Co. Limited, began branding its services in the name of AKTEL in Bangladesh. It is a company incorporated in Bangladesh with the object of offering the state-of-the-art and modern telecommunications services to the peopl e of Bangladesh at competitive prices. Keeping this objective in mind, the management of TMIB has been trying to achieve continuous improvement in its employee selection process and providing the best services. To accelerate this process of continuous improvement and to know more about the expectations of the market, the company needs to focus its internal resources along with the external. For a research on customers perception towards its present marketing mix it is obvious to take the best product (employees) for providing the best services towards the customers. Taking into account the customer perception of AKTELs various package offers as well as the existing market scenario is full of complexity. In the context of a developing country like Bangladesh, where the need for marketing of products through customer perception provides a very important dimension, the policies and practices in the matter of analyzing the behavior of customers, is a relevant part of this research. Thus , the study on the present marketing activities of AKTEL products and services is very crucial because the company should be aware about the customers feedback of their current market mix in terms of its effectiveness by which, they will get the opportunity to know how the customers feel about their product and service offerings and the effectiveness of the present marketing mix. In turn TMIB will be able to formulate some guidelines for modifying the existing market mix, and if the need arises if try to make it more effective. It has already been mentioned that from the very beginning TMIB has been trying continuously to ensure the effectiveness of their marketing strategies and designing a much precise and concrete marketing mix. And for all these tasks the internal activities in HR division helps a lot to meet the external demand of the customers. Objectives of the Study: The broad objective of this study is to find out the employee perception about the effectiveness of AKTELs various policies and strategies as well as their present marketing activities and promotional tools. In essence the objective of this report would be to: To find out the Employees perceptions and preferences of the various AKTEL packages in terms of their respective features and benefits to achieve the customers goal.. To see whether AKTELs Prepaid and postpaid packages offer the benefits or feature that customers want. To find out if the customer care center offer efficient To see if the promotional activities of AKTEL are gaining customer awareness To see whether AKTELs Prepaid packages are easily available and affordable Methodology of the Study: The methodology of the study was carried out using both primary as well as secondary information. There were some interviews taken from certain personnel in the marketing division as well as the customer acre center, which provided helpful information in regard to the report. There were some telephonic interviews conducted which was very time consuming. Apart from the interviews, various books, journal, brochures, newspaper and previous marketing reports also provided valuable information Limitation of the study: There was certain limitation for which this report had some obstacles. The data collected was based on the HR employees interviews, which was little more time consuming. The report had to be prepared within the daily routine of office work, which resulted in the prolonging or the data collection. Sometimes the data was really confidential for the AKTEL employees to share with the Intern. Thus, the report had to be done in accordance with the daily work activities and of course was constraint. Importance of the subject matter: The importance of the report is reflected in the analysis and findings part. It is very crucial for the organization to know how effective theyve been and what they should launch in the future in order to gain potential customer as well as market share. By conducting this report, it should be clear to the organization whether they are heading the right way and what tactics and strategies they should implement to ensure that their promotional tools are working properly and raising customers awareness. By putting more emphasis on their marketing activities they should be able to come up with and implement strategies that are in alignment with their vision i.e. ‘To be the most preferred GSM cellular provider in Bangladesh Legal Issues: Laws and Policies in Bangladesh There are certain laws and policies that mobile operators have to follow. The government only granted permission to mobile companies to operate in the country. At present they are not allowing any more mobile operators. So the existing mobile companies have to act in accordance with governments rule and regulations. Scope of the Research: The scope of the research was limited to providing a general overview of the marketing division and their present activities, i.e. what kind of promotional tools they are using and what impact id had on the media and the customers. During this -month internship program the major task was to provide an insight into the present market mix and customer perception of AKTELs products. Thus, the scope was limited to analyzing the present market strategies. 8. Situational/Problem Analysis: Macro-environmental factors: Michael Porter has provided conceptual framework for industry analysis. He developed a five-factor model for industry analysis. The model identifies five key structural features that determine the strength of the competitive forces within an industry and hence industry profitability. Though it is often used by organizations for entering new markets, it can also be used to see the competitiveness in the current market. The five-factor model includes the following: a) Bargaining Power of Buyer b) Bargaining Power of Seller c) Competitor d) Barriers to entry e) Substitution effect The following diagram illustrates how Porters five forces affect the industry: Porters Five Forces: A Model for Industry Analysis. The model of pure competition implies that risk-adjusted rates of return should be constant across firms and industries. However, numerous economic studies have affirmed that different industries can sustain different levels of profitability; part of this difference is explained by industry structure. Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry BARRIERS TO ENTRY Absolute cost advantages Proprietary learning curve Access to inputs Government policy RIVALRY THREAT OF Economies of scale Switching costs Buyer inclination to substitute SUBSTITUTES Price Performance Trade-off of substitute Capital requirements Brand identity Access to distribution Expected retaliation Proprietary products BUYER POWER Bargaining Leverage DEGREE OF RIVALRY Buyer volume Exit barriers Buyer Information Industry concentration Brand identity Fixed cost/ Value added Price sensitivity Industry growth Threat of Backward Integration Intermittent overcapacity Product differentiation 1. Rivalry: In the traditional economic model, competition among rival firms drives profits to zero. But competition is not perfect and firms are not unsophisticated passive price-takers. Rather, firms strive for a competitive advantage over their rivals. The intensity of rivalry among firms varies across industries, and strategic analysts are interested in theses differences. If rivalry among firms is low, the industry is considered to be disciplined. This discipline may result from the industrys history of competition, the role of a leading firm, or informal compliance with a generally understood code of conduct. When a rival acts in a way that elicits a response by other firms, rivalry intensifies. The intensity of rivalry commonly is referred to as being cutthroat, intense, moderate, or weak, based on the firms aggressiveness in attempting to gain an advantage. In pursuing an advantage over its rivals, firms can choose from several competitive moves: Changing prices: raising or lowering process to gain a temporary advantage Improve product differentiation-improving features, implementing innovations in the manufacturing process and in the product itself. Creatively using channels of distribution: using vertical integration or using a distribution channels that is novel to the industry. Exploiting relationships: with suppliers. The intensity of rivalry is influenced by the following characteristics: i. A larger number of firms increase rivalry because more firms must complete for the same customers and resources. The rivalry intensifies if the firms have similar market share, leading to a struggle for market leadership. ii. Slow market growth causes firms to fight for market share. In growing market, firma are able to prove revenues simply because f the expanding market. iii. High fixed costs result in an economy