Corporate Plan for AVG to enter Indian Telecom Sector Indian Telecom Market Approx. 334.85 Million Telephone Customers Tele density is less than 30%. Second Largest Mobile Country. Fastest Growing Telecom Nation in the world – growing @ 8-9 million connections per month. Compounded customer growth of around 40.68% p.a. for the last 5 years Market Trends Rising Mobility, Declining fixed line. VAS emerging as major Revenue Earner. Growing popularity of Internet and Broadband. Approx. 77.18 million internet customers Approx. 3.87 million Broadband Customers Growing Tele-density Teledensity has increased from 1.57 in March, 1997 to 29.08 in July 2010 Rural Teledensity is still much less than Urban Teledensity. As of March 2010, Urban Teledensity is 65.9 % and Rural Teledensity 9.21%. Industry Analysis ENVIRONMENTAL SCAN SWOT ANALYSIS VALUE CHAIN ANALYSIS Environment Scan Environmental Scan Political Factors Political Opposition to participation by the private players Govt support to promote FDI in Telecom sector raising it to 74% Auctioning of spectrum Economic Factors: Cost of calls Being Driven Down Growing GDP Middle class consumer base growing due to accelerated economic growth Gross revenues for the sector have grown at compound annual rate of about 21% and stands at US $ 26 Billion – 34% contribution of Public Sector and 66% of Private Sector Environmental Scan Socio-Cultural Factors: High End Phones becoming status symbol Due to Intimate family bonding in Indian Culture, there is need to remain connected Tech Savvy Generation Technological Factors: Equipped with New Technology Rapid Industrial growth rate induced by emerging technologies like WiMax, 3G, Number Portability etc. Strong Fibre Optic Network Utiilization of E- Commerce facilities Efficient Customer Care Services Environmental Scan Legal Factors Publication/advertisement of tariff for consumer information shall contain minimum essential information. Websites of the service provider to contain complete details of the tariff plans as well as financial implications for various usage slabs. Customers to be informed in writing, within a week of activation of service, the complete details of his tariff plan. Quality of Service Standard bench marks to be ensured by Operators. SWOT Analysis SWOT Analysis Strengths: Enormous customer base in the wire less segment Decline in Tariffs The adoption of new technology India’s emergence as a leading destination for foreign investment with FDI ranging from 74-100% High return on investment Weaknesses: Weak Infrastructure - Huge initial fixed cost for service providers Huge costs for advanced technologies like Mobile Number Portability (MNP) Limited spectrum availability Huge initial investment Late adopters for new technology SWOT Analysis Opportunities: Emerging Technologies: 3G,WiMax Tier-2, tier-3 cities can accommodate more players Rural Telephony Enormous potential in VAS World’s largest untapped mobile market Horizontal Integration Threats: Unhealthy Competition Declining ARPU Value Chain HR management - IT skilled work force, Telecom engineers, SCM Supporting Activities specialists Customer service & Telesales training, Franchisee management, 7,646 out of 23,789 employees in Mobile services, Owned retail staffing and M training. A Technology development - Creating a 3G enabled network, Launching M R commerce by tie ups with banks and credit cards. G I Procurement - Established a SCM network to acquire networking & Telecom N tools, Maintain long term relation with suppliers to provide handsets & services Primary Activities M A R G I N Primary Activities Marketing & Input Process Output Post Sale Sales •Network Infrastructure Infrastructure Development Nokia-Siemens, CISCO, INTEL Network Integration Public •Software and •GSM Services • Strong content provider Channel Corporate •VAS Distribution Competitive IBM, INFY TCS, Businesses Position AFFLE, On Mobile, •Fixed Lines •Market India Times, Innovators SME’s Hungama Mobile, •Broadband Mauj , One 97 IMI Capable Institutes MOBILE. Supplier •Finance •Licenses Start Corporate Strategy for AVG Vision & Mission Vision: To bring superior communication services to enhance its customers' lives and businesses Mission: Serving customers in a manner that is simple and personalized, by efficiently and creatively harnessing leading edge technology Delivering a brand of service experience that is reliable and enchanting. Strategic Objectives for AVG Market Share Growth Aggressive advertisements. Reaching consumer via media and personally. Providing more and more value added services at aggressive price. Entering into each other’s dominance area through aggressive marketing Must try to pass the benefit to consumers if any provided by the government like reduction in tax or surcharge etc. Should negotiate with suppliers for low price and to reduce the fixed cost and pass this benefit to consumer for large base. Market expansion plan Sales Growth with Existing Product Tele density is only 26% AVG should make market strategy to tap the remaining market which is not covered yet Sales Growth with New Products Most of the mobile users are unable to use value added services due to costly mobile set High dependence on reduction in price of handset so that more value added services will be used by customer and will result in more profit. 3G has been just launched but it is very costly and not well marketed yet Lowering the price and well marketing is needed for 3G to increase the profit Strategy in Implementation Organizational Structure CMD Head AVG India Head International Business Group President President President Executive President Director HR Enterprise Mobile Tele-media DTH Service Services Services Exe. Director Finance Executive Director Supply Director IT Director Legal & Assurance Organizational Structure Primarily divisional structure with shared support functions CEO in touch with all the divisional heads Flexible to add or divest any division (e.g. broadcasting) No duplication of support functions for all divisions Supply & Infrastructure Infrastructure partially outsourced due to extensive capital requirements Towers Routers Optical fiber cable network Strategic alliances to be formed with established operators for coverage outside circles and roaming services Technology & IT Strategy Technology to integrate superior Value added services Pocket Internet Multiplayer gaming Mobile TV Video calling Bill payments IT investments required to achieve better customer service and operational efficiency DQ (Directory Enquiry), IVRS (Interactive Voice Response System) Accounting and billing systems Complaint handling and Operational efficiency Recommendations for AVG Product innovation at regular basis Highest standards of customer service Providing Value added services Keeping price according to market level New ways of advertising to make strong presence among competition Recommendations for AVG Keep on pressurizing government to make the policies unfavorable to the substitute product Negotiate with suppliers for high quality service or raw materials Invest more in self Research & Development activity rather than depending upon foreign suppliers to tackling the threats of substitute Thank You !!!