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    Strategic Audit of BSNL

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    Nishant Ahuja
    BSNL is India's largest provider of fixed telephone services with 95 million customers as of 2011. However, it has been losing market share in mobile services, with only 13.5% share compared to private competitors like Vodafone. BSNL faces internal issues like bureaucratic control, operational inefficiency, and poor marketing. It also faces external threats from increased competition and decreasing revenues per line. To address these challenges, BSNL plans to increase its customer base to 160 million by 2014 through expanding services like broadband, 3G, WiMax and FTTH networks. It must also improve operations, customer service and marketing strategy to better leverage its infrastructure and compete effectively.

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    Strategic Audit of BSNL

    Uploaded by

    Nishant Ahuja
    165 views42 pages
    BSNL is India's largest provider of fixed telephone services with 95 million customers as of 2011. However, it has been losing market share in mobile services, with only 13.5% share compared to private competitors like Vodafone. BSNL faces internal issues like bureaucratic control, operational inefficiency, and poor marketing. It also faces external threats from increased competition and decreasing revenues per line. To address these challenges, BSNL plans to increase its customer base to 160 million by 2014 through expanding services like broadband, 3G, WiMax and FTTH networks. It must also improve operations, customer service and marketing strategy to better leverage its infrastructure and compete effectively.

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    Strategic Audit of BSNL (1)

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    BSNL is India's largest provider of fixed telephone services with 95 million customers as of 2011. However, it has been losing market share in mobile services, with only 13.5% share compared to private competitors like Vodafone. BSNL faces internal issues like bureaucratic control, operational inefficiency, and poor marketing. It also faces external threats from increased competition and decreasing revenues per line. To address these challenges, BSNL plans to increase its customer base to 160 million by 2014 through expanding services like broadband, 3G, WiMax and FTTH networks. It must also improve operations, customer service and marketing strategy to better leverage its infrastructure and compete effectively.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    165 views42 pages

    Strategic Audit of BSNL

    Uploaded by

    Nishant Ahuja
    BSNL is India's largest provider of fixed telephone services with 95 million customers as of 2011. However, it has been losing market share in mobile services, with only 13.5% share compared to private competitors like Vodafone. BSNL faces internal issues like bureaucratic control, operational inefficiency, and poor marketing. It also faces external threats from increased competition and decreasing revenues per line. To address these challenges, BSNL plans to increase its customer base to 160 million by 2014 through expanding services like broadband, 3G, WiMax and FTTH networks. It must also improve operations, customer service and marketing strategy to better leverage its infrastructure and compete effectively.

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    of 42

    BSNL LOSING ITS MINI NAVRATNA STATUS GROUP 9

    FUTURE

    India is the 3rd largest telecommunication market in the world. Telecom sector contributes nearly 2% of the Indian GDP. Under NTP 1999 telecom sector has transformed drastically. The overall teledensity has reached 77.5% Subscriber base has a growth rate of over 26%.

    BSNL is the state owned telecommunication company headquartered in New Delhi.


    It is the largest provider of fixed telephone service in India It has 95 million customers as of June 2011. Services provided by BSNL are Universal telephone service, cellular mobile telephone services, WLL-CDMA telephone services, Internet, IN, 3G, IPTV, FTTH, VVOIP, WIMax BSNL has 75% market share of fixed lines

    BSNL has13.50% share of mobile telephone.


    55.6 % market share with 9.19 million internet subscribers. BSNL has world-class infrastructure BSNLs Turnover for the financial year 2010-11 of BSNL was 29,700 crores.

    Growth Plan of BSNL Considering the current scenario and demand in telecom sector BSNL has planned to increase its customer base to 160 million by March 2014.

    Universal Telecom Services (75% Market Share)

    Cellular Mobile (13.50% share )

    WLL-CDMA Telephone

    Internet 1. Netone 2.Broadband (55% Market Share) Intelligent Network

    3G

    IPTV
    WiMax

    FTTH

    Tablet-PC

    Largest player with presence in 23 circles. Market share of 20% (approx)


    Cost leadership & High Quality Technology Operational Efficiency CORE Competency: Branding & Promotions Outsourcing
    Managed Services to Erricson IT service to IBM

    Vodafone, completed the acquisition of Hutchison Essar in May 2007.


    It is among the top three GSM mobile operators of India.

    Cost Leadership & World Class Technology


    Core Competency
    Brand Image Recognition

    Vodafone also became a mass mobile phone brand like Nokia, Samsung, Motorola, and Sony Ericsson in addition to continuing as telecom services provider.

    ISSUES

    EXTERNAL ISSUES

    INTERNAL ISSUES

    (Rs in crores)

    Political Environment External Control and Bureaucracy Lack of support from the Government No strategic investments and lack of transparency Entry of private players Linkage between social obligations and commercial activities

    Higher wage expenditure. Lack of coordination and support from employees.

    Poor customer service.


    Operational inefficiency. Poor marketing strategy and hence poor brand equity.

    Huge infrastructure and assets.


    Poor technology implementations Slow decision making

    SWOT
    Porters Five Forces PEST Analysis of Indian telecom market Grand Strategy selection matrix Ansoff Matrix

    STRENGTHS

    Market leader as far as wireline subscriber base is concerned Large no. of resources Huge optical fiber network Deep penetration into the rural market Huge tower network with approx 70,000 towers Easy deployment of new resources

    WEAKNESS

    High bureaucratic control Operational inefficiency Not leveraging their huge infrastructure Poor technological implementations Poor marketing strategy and hence poor brand equity Few strategic alliances Other problems like social obligations and outdated technologies

    OPPORTUNITIES

    India is one of the fastest growing market in telecom sector 5G Allocation and shifting of trend towards adoption of Next generation networks Strategic alliances to penetrate globally Broadband in rural areas Public private partnership

    THREATS

    Highly competitive market Market maturity in basic wireline phones Decrease per line revenues due to competitive pricing Private players now focusing on fixed wireless phones

    DEGREE OF RIVALRY

    (High)

    BARGAINING POWER OF SUPPLIERS (High)

    THREAT OF NEW ENTRANT (Medium)

    BARGAINING POWER OF BUYERS (High)

    THREAT OF NEW SUBSTITUTES (Low)

    There is high degree of rivalry in telecom industry High Exit Barriers High Fixed Cost: Very Less Time To Gain Advantage By Innovation Price Wars

    For telecom industry threat of new entrants is Medium. Licensing requirement act as a major barrier to entry. Sometimes it became very difficult for the new entrants to obtain license.

    Threat of substitutes is currently low in the telecom sector Rapid increase in penetration of broadband in India, it is gradually increasing with the increasing use of services like online chat, VOIP skype, Email,etc.

    Bargaining power of buyers is dependent on size and concentration of customers. It depends on the level of information of buyers & differentiation of the competitor. In telecom sector buyer power is high as there are many large players in the market.

    Market has high supplier power if suppliers can charge customers different prices in line with differences in the value created for each of those buyers.

    Political

    Political Interference Corruptions like 2G scam. Stability of Government

    Economic

    Subscriber base is increasing due to increase in disposable income Usage rate is increasing. Low call cost and increasing frequency of calls.

    Social

    Techsavy consumers Lifestyle changes Regional shift in population from rural to urban areas. New generation Networks Use of VOIPs Internet Tablets Business on a phone Coming up of E-commerce

    Technological

    Maximize Strengths with Internal Resources Concentrated growth

    Focus on increasing market share in existing markets. Focus on Rural Market Customized plans and discounts

    Market Development

    Joint ventures for penetrating the global Market. Operationalize a market development strategy .

    Product development strategy


    This involves modification of the existing products and make new products for the existing customers. They are trying this strategy with their WIMAX technology (Failure of Franchisee model in some areas)

    Minimize Weakness with External Resources


    Vertical integration Merger with telecom equipment manufacturer ITI Combine service-providing & manufacturing Overcome Weakness with Internal Resources Turnaround or retrenchment plans Cost reduction Assets reduction Divestiture Divest by selling share to public

    Existing product
    Market Penetration Existing market Landline service Internet service Cater rural demand

    New products
    Product Development Broadband based content oriented services Tablets

    New market

    Market development Cellular service Leased circuit Intelligent network Broadband WIMAX

    Diversification Turnkey projects for ITES companies International market

    Follow recommendations based on analysis of Sam Pitrodas Report


    Enhance the decision making process to the

    competitive business environment and the changing market realities. Minimize Political Interaction. Pruning of staff and adding young blood. Encourage Meritocratic culture in BSNL

    Leverage huge network strength Improve performance Improve customer service Improve marketing strategy Leverage the huge tower strength Implement end to end IT system Indulge into PPP

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