bharti airtel presentation
TRANSCRIPT
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Strategic Analysis
Of
Group Company
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Introduction to industry India's telecommunication network is the second
largest in the world based on the total number of telephoneusers (both fixed and mobile phone).
It has one of the lowest call tariffs in the world enabled bythe mega telephone networks and hyper-competitionamong them. It has the world's third-largest Internet user-
base with over 137 million as of June 2012.
Major sectors of the Indian telecommunication industryare telephony, internet and television broadcasting.
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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.
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Objectives of Bharti Airtel Ltd Objectives
- To Undertake Transformational Projects
- To Diversity in new business.
- To Lay the foundation for building a conglomerate ofculture.
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VISION & MISSIONVISION :
To be globally admired for telecom services that
delight customers.
MISSION
Customer service focus
Empowered employees
Innovative services
Cost efficiency
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Q #1: What are the Industrys
Dominant Economic Traits?
Market size and growth rate
Number of rivals
Buyer needs and requirements
Vertical integration
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Q #2: What Kinds of Competitive
Forces Are Industry Members
Facing?
Five Forces Model of Competition
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New Entrant Threat
Extremely high infrastructure cost.
License cost is also very High.
Overall influence is Low.
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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 telecomindustry which again increases power in the hand ofbuyers.
Again switching cost is low.
Number portability has increased the power of thebuyers.
Overall, the power is in the hands of buyers is high.
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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 inmodifying the architecture.
Overall influence is medium.
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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 veryhigh.
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Threats from substitute Landline and CDMA market is diminishing.
Use of Video conferencing, VOIP(skype, gtalk, yahoomessenger) is increasing rapidly.
Overall, the threat is medium.
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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 andhow they use it
Product innovation
Technological change/process innovation
Marketing innovation
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Assess impact
Are the driving forces causingdemand for product to increaseor decrease?
- Yes
Are the driving forces acting to makecompetition more or lessintense?
- Yes,
Will the driving forces lead to higher or lower industry
profitability?
- Yes Low Profitability, because of more
competitors and also mobile.
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Q #4: What Market Positions Do Rivals
Occupy?
Strategic Group Mapping ( in Crs.)
COMPANIES REVENUE TOTAL ASSETS PAT
BHARTI AIRTEL 38,800 63,559 5730
BSNL 30,240 70,000 6457
VODAFONE 23,200 22,300.80 7003
RELIENCE 22,130 73,067 8040
IDEA 11,390 23,072 5765.4
TATA COM 11,000 8,087.80 171.34
TATA
TELESERVICES 6,900 4,237.96 517.51
MTNL 3,650 14,102.17 2801.92
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SWOT Analysis of Bharti Airtel Ltd
Strength:-
Bharti is very focused on telecom industry.
Leadership in telecom industry with over 88 millioncustomers.
The only Indian operator other than VSNL that hasinternational submarine cable.
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SWOT Analysis.
Weakness:-
Price competition has increased with othercompetitors.
Untapped rural market, most of which is covered by
BSNL.
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SWOT Analysis.
Opportunities:-
Latest technology and low cost advantage.
Huge market.
Low broadband penetration.
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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 ofcustomer to other competitors.
Vodafone has advantage in 3G service than airtel since ithas experience of running the 3G service in other countries.
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Generic Strategy
Narrow
Market Scope
Broad Market
Scope
Differentiation Strategy Low Cost Strategy
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Generic StrategyExisting Product New Product
Existing
Market
New
Market
Differentiation Strategy Low Cost Strategy
Market penetration
- Mobile Service- Broadband- DTH
Product Development
- 3G
MarketDevelopment
- Mobile Services
Diversification
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Complementary strategyAlliances/Partnerships
To extend its reach in India's rural markets, Bharti Airtel isfocusing on innovative initiatives, including efficientinfrastructure deployments, expanding its distributionnetwork via partnerships, and customized content andtariffs.
To expand coverage into rural regions, Bharti Airtel is
sharing passive infrastructure services with Vodafone (42percent ownership) and Idea (16 percent ownership)through its joint venture, Indus Towers. Sharing theinfrastructure cost and usage between multiple operatorshas helped Bharti Airtel to reduce its operating and capitalexpenses.
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Complementary strategyJoint venture
Bharti Airtel also formed a joint venture with the Indian FarmersFertilizer Cooperative Limited (IFFCO). Its joint venture, IFFCO
Kisan Sanchar, uses IFFCO's wide rural presence (present in 80percent of Indian villages) and appeal among the ruralagricultural community to market and distribute Bharti'sproducts.
IFFCO Kisan Sanchar provides subsidized handsets andconnections at competitive rates in rural areas. It also helpsBharti Airtel to identify and acquire suitable locations fordeploying its cell sites. In addition, it offers tailored servicesincluding voice-based updates on crop prices, farmingtechniques, rural health initiatives, and "help line" services
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Strategy Options for Competing
in Emerging Industries
Bharti Airtel is pushing hard to improve Technology& improve Product Quality(Services).
Focus onAdvertising
- Increase frequency of Use.
- Creating brand Loyalty.
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Strategy Options for Competing
in a Mature Industry
Strong focus on Cost Reduction
Increase sales to present customers
Expanding Internationally
Emphasize Innovation in thevalue chain.
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Market Leader Fortify-and-Defend Strategy
1. Increase advertising and R&D2. 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
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Diversification in Related IndustryJoint 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
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Unrelated DiversificationCompany Name Industry
Bharti AXA General Insurance Insurance
Bharti Retail Retail Industry
Bharti Walmart Retail Industry
FieldFresh Foods Pvt. Ltd Retail Industry
Bharti Realty Limited Real Estate Industry
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