banglalink mba

7/28/2019 Banglalink MBA

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Executive Summary

Sheba, the third mobile operator, had been providing GSM (Global Service of Mobile) servicesin Bangladesh since 1998. Orascom Telecom, a subsidiary of Orascom Telecom Holdings,bought 100 percent share of Sheba Telecom in 2004 and started its operation with new brand

name --banglalink

In Bangladesh, Banglalink aims to understand peoples' needs best and develop appropriatecommunication services to improve peoples' life and make it simple. All our work is aimedtowards meeting our vision.

To enter into Bangladesh market and to grab the market they had to face several problems asthere was already a giant competitor. Though the problem exists but the proper and accuratestrategy adoption helps them to compete.

Here we divided the strategies into two stages which they adopt sooner or later. We build these

strategies on the activities and performance of Banglalink as there were no specific or particularstrategies in written format on their website and related area we have searched. Stages are

Entry Strategy Current Strategy

After entering into market they attracted customer from the low level to high level bydistributing their products with a few of cost sometimes it seems nothing and created an imageon the mind of all level people that mobile phone for all.

the strategies they had followed1. Acquisition strategy2.

Offensive strategy3. Market-Niche Strategy

4. Differentiation Strategy5. Low cost leadership strategy

Though banglalink achieve the top poison in the market with other market leader, to survive andto hold own position in the market Banglalink has to take some other strategies. As there are sotough competition so from our empirical view these will be appropriate-

1. Low-cost leadership strategy2. Differentiate strategy3.

Harvest strategy


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Introduction


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The Problem

How Banglalink grab the market when a strong competitor like Grameenphone exist in themarket.

Background information

Sheba Telecom (Pvt) Limited has changed its name as Orascom Telecom Bangladesh Limited,says a press release.

Sheba, the third mobile operator, had been providing GSM (Global Service of Mobile) servicesin Bangladesh since 1998. Orascom Telecom, a subsidiary of Orascom Telecom Holdings,bought 100 percent share of Sheba Telecom in 2004 and started its operation with new brandname --banglalink

After its inception in Bangladesh market, the Egypt based brand had taken massive tariff

reduction strategy to grab significant share of the market. By the end of 2007, the companyamong the six operators has become the second largest market player in terms of subscriberacquisition. Grameenphone is the leading operator.

According to Bangladesh Telecommunication and Regulatory Commission (BTRC),Banglalink's total subscriber reached 7.88 million by the end of February 2008. Grameenphone'ssubscribers reached 17.20 million by the end of February.

The BTRC's latest figures say, up to February 2008, the total mobile phone subscribers reached37.55 million, increased by 68 percent compared to the same period a year earlier. The numberof total mobile phone subscribers was 22.38million by the end of February 2007.

Voice from Banglalink-In Bangladesh, Banglalink aims to understand peoples' needs best anddevelop appropriate communication services to improve peoples' life and make it simple. All ourwork is aimed towards meeting our vision. All members of the Banglalink family are highlypassionate individuals, fully committed to achieving the vision that we have set ourselves. Ourcustomers' needs matter most to us- making their life simple and improving it is all we want. Toensure our vision is achieved, we have set ourselves a few values, we want to be-

Straight Forward Reliable Innovative Passionate

All the Banglalink family members have one thing in common- a passion to serve. We want togo that extra mile, so that you can have the best possible service investing in the future ofBangladesh. The biggest barrier today for people is the cost of handsets. We will strive to lowerthe total cost of owning a mobile. We are here to help make a difference in people's lives byproviding affordable and reliable connectivity solutions. We will strive to connect people and


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link their lives by listening to them and by understanding their needs. We are here to help youspeak your language.

Objectives of the Study

The root objectives are given below: To have an idea of Strategies which Banglalink has followed over the time. To identify problems regarding strategies in case of achieve the present position in

the market and to face competition. To develop some recommendations regarding the problems found.

Scope of the Study

Focuses on strategies in capturing the market Determines the loyalty factor of Banglalink Present status of strategies and effect on the position of company Focus on the service provided by banglalink comparing with others speciallyGrameenphone Financial phenomenon

Methodology

The study was conducted based on only secondary data. The sources of those data are statedbelow:

Secondary Source:

The secondary data were collected from the following sources-

Internal newsletter of the companyVarious research journals of different research organizationsWeb pagesAnnual reports of the companyVarious books and other internal publications of the company

Limitations

Some of those limitations are mentioned as follows:

One of the major limitations we faced that is the previous data is not available. Confidential information regarding past marketing and sales information was not

accurately obtained As, we had more dependence on the secondary sources, so there might be some levels of

inaccuracy with those collected information.

There stated no strategy specifically which they followed and following. Many of the analysis on the obtained data are based upon our interpretation. This in result

might bring some biases, as lack of knowledge and depth of understanding might hinderus to produce an absolute authentic and meaningful report.


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Strategic Decision of Banglalink


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Banglalink - making a difference

When banglalink entered the Bangladesh telecom industry in February 2005, the scenariochanged overnight with mobile telephony becoming an extremely useful and affordablecommunication tool for people across all segments.

Within one year of operation, banglalink became the fastest growing mobile operator of thecountry with a growth rate of 257%. This milestone was achieved with innovative and attractiveproducts and services targeting the different market segments; aggressive improvement of

network quality and dedicated customer care; and effective communication that emotionallyconnected customers with banglalink.

At a Glance:

Business Type: SubsidiaryIndustry: TelecommunicationFounded: November, 1996[1]Headquarters: Tiger House, House # SW(H)04, Gulshan Avenue, Gulshan Model Town,

Dhaka, BangladeshArea Served: ` 64 districts

Key people: Ahmed Abou Doma, MD and CEOProducts: Telephony, GPRSRevenue: US$288 million (2008), 49.2% from 2007Parent: Orascom TelecomWebsite: www.banglalinkgsm.com

Products and Services

Banglalink entered the market with a promise of making mobile phone affordable for people.This promise was kept and banglalink was the first operator to introduce a flat rate for all calls(inside own network and to other operators) for the convenience and ease of customers. Thus"desh" was launched - the best prepaid package for making calls to any network.

In addition, a new prepaid package, banglalink desh "rong" has also been launched. This packageoffers attractive tariff plan for customers who need to talk within the banglalink network. "Rong"is a Bengali word that means "color" - the objective is to give customers a brand that they canrefer to as colorful and lively. banglalink desh is already a very popular and well-liked brand -banglalink desh rong is a brand extension to enrich the brand.


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Targeting the corporate and SME segments, banglalink has launched "banglalink enterprise"with state of the art services including GPRS, corporate SMS broadcast, dedicated customerrelationship management, and customized packages. banglalink enterprise offers customizedtelecom solutions for different businesses as per their requirements and the objective of

banglalink enterprise is to assist the clients at every step as their businesses grow.

Banglalink also offers extensive range of value added services for customers. Recently,interactive voice portal has been launched for customers who are not SMS savvy. banglalink'amar tunes' (CRBT) service is extremely popular with customers with a rich library of English,Hindi, Bengali and Arabic songs - all ready to be set as caller ring back tones. banglalink hasalso been the first operator to launch Missed Call Alerts for customers. In addition services likeSong dedication; logo and ring tone download; and i'bubble (voice message) make the portfoliorich. banglalink has also launched GPRS in most major cities and will extend to major districtsby end of 2007.

Banglalink continues to offer products and services approaching different consumer segmentswith distinct communication needs. banglalink focuses heavily on enhancing service and qualityas well. In 2006, enhancements were done in terms of network quality and customer service.There was aggressive improvement of indoor coverage, and wherever necessary, especially in-building solutions were installed in case of enterprise customers and corporate clients. Toprovide better customer service, a new, expanded, state of the art call center has also beenestablished. At the end of the 2006, there have been a six customer care centers and 63 franchisecenters across the country attending various customers with different queries.

In 2006, banglalink also became a leader in terms of its advertising quality and setting very highstandards for competition and others. The corporate TV commercial of "din bodol" based on the

theme "making a difference in people's lives", touched everyone through out the country and wasadjudged the best TVC of the year according to the leading dailies of the country like ProthomAlo and New Age. This TV Commercial has become a matter of national pride for Bangladeshas it has been nominated for the best TV Advertisement of the year with 4 other internationaltelevision commercials at the GSMA Award 2007. GSMA Award is considered to be the Oscarof mobile industry. In line with this, 'making a difference' has been formally launched in 2007 asthe tagline for banglalink - enhancing the corporate platform for the mother brand. This year, thecorporate brand strategy is to establish 'making a difference' as the platform for the brand. Thecommunication strategy is to produce television commercials based on true stories ofBangladeshi people who started with nothing, have achieved success and glory in their respectivefields and have made a difference in life. To support this, events, sponsorships and activationsunder the corporate brand have also been chosen with ones that have the essence of 'making adifference'.


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Strategies adopted in different period by Banglalink

As we learn that Sheba the Bangladeshi company is owned by Orascom and enters intoBangladesh with the name Banglalink. To enter into Bangladesh market and to grab the market

they had to face several problems as there was already a giant competitor. Though the problemexists but the proper and accurate strategy adoption helps them to compete.

Here we divided the strategies into two stages which they adopt sooner or later. We build thesestrategies on the activities and performance of Banglalink as there were no specific or particularstrategies in written format on their website and related area we have searched. Stages are

Entry Strategy Current Strategy

Beside these two strategies from the concept of global expansion strategy as a foreign company

Banglalink had adopted the transnational strategy. From the following figure we get a clear view.

Figure: Global Expansion Strategy

From here we have seen that as localization pressure and cost reduction pressure of thattelecommunication company both are high so automatically the company plotted in transnationalstrategy quadrant.

GlobalStandardization

Strategy

InternationalizationStrategy

LocalizationStrategy

TransnationalStrategy

(Banglalink)

CostRed

uctionPressure

Localization Pressure

High

Low

Low

Hih


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Entry Strategy

From empirical knowledge we had seen that Sheba was acquired by Orascom with 100%

share. After entering into market they attracted customer from the low level to high level bydistributing their products with a few of cost sometimes it seems nothing and created an imageon the mind of all level people that mobile phone for all. They also offered free talk time oftk.1200 on card instant with their product package and they were the pioneer of this concept offree talk time.

This was the short story of Banglalink at the entry period. Base on this story we havemeasured the strategies they had followed

1. Acquisition strategy2. Offensive strategy3. Market-Niche Strategy4.

Differentiation Strategy5. Low cost leadership strategy

Reason behind the strategy:

Strategy ReasonsAcquisition strategy Orascom bought 100% of Sheba and take new name

for operating in Bangladesh that is Banglalink, thename that touch native people.

Offensive strategy Action directed against the market leader to securecompetitive advantage which difficult for leader to

thwart Dramatic reduction of price Highly creative and imaginative advertising campaign Unique package offerings which attract customer

easily.

Market-Niche Strategy Focus on women subscriber with new package Ladies First

Orascom

Banglalink

Sheba


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Current Strategy

After getting the acceptability of people and achieving the top position along with LeaderCompany now come to the question of sustainability in that position of market as well as people.To maintain the position they have taken several strategies base on market phenomenon

1. Strategic Alliance2. First Mover strategy3. Late Mover strategy4. Low Cost Strategy5. Differentiation Strategy

Reason behind the strategies:

Strategies ReasonsStrategic Alliance To gain the network coverage all over the country all the

telecommunication companies hold the strategic alliance.

First Mover strategy Capture the competitive advantage first, like-Advance balance

Late Mover strategy To Avoid Risk They Have Offer Some Services LaterThan Their Competitors, Like-

Internet Service

Call block Servicei-top up serviceCall alert service

Low Cost Strategy Till now they provide the low rate for call to maintain existingcustomer and grab new customer by different packagecomparing others.

Differentiation Strategy Call-outgoing free base on incoming call Advance balance facility

PCO connection for doing businessDifferentiation Strategy First Package handset with connection at tk. 2700/=

Free talk time with every packageLow cost leadership strategy Provide standardize product with very low cost

compare with market leader

Aktel (Robi)

GrameenPhone Teletalk

Banglalink


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Financial Situation:

From the adopting strategies of Banglalink we have seen that they use several strategies to createa frightening position in the market. Form the following graph we get knowledge about their

investment and revenue over the period 2005 to 2008


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SWOT Analysis

Analysis of Strengths

Banglalinks all connections are ISD & EISD: Its a big strength of Banglalink. Its theonly SIM which has such a versatility of connections having ISD, Economy ISD servicealong with both incoming and outgoing connectivity with any of the land phones. This isnot seen to other providers. It gives a tremendous competitive advantage to theBanglalink Bangladesh ltd over its respective competitors.

Banglalink is the only indigenous company using GSM service: Banglalink is the onlylocal organization which is providing GSM technology in this country. The other localorganization named pacific telecom is providing CDMA technology which is moreexpensive. So Banglalink can take this advantage over its competitors.

It has also provided incoming facility up to lifetime: Banglalink have a strong strengthover its competitors incase of incoming facility. Banglalink present incoming duration isup to lifetime.

Strength Weakness1. Low cost provider regarding its

competitor.2. Banglalinks all connections are ISD &

EISD.3. Banglalink is the only indigenous

company using GSM service.4. From the very beginning it is providing

free TNT incoming & Outgoing.5. It has also provided incoming facility

up lifetime.6. Moreover its contribution to our

economy can be notable.

1. The progress of development ofnetwork is far below from thesubscriber expectation.

2. Lower number of human resource.3. Failed to identify difference between

developed market and developingmarket.

4. Banglalink does follow aggressivemarketing but it should follow smoothstrategy.

5. Banglalink faces coordination problemof Management system.

Opportunities Threats

1. Banglalink can use the image ofmultinational organization.

2. Introduction of new technology andservices.

3. Expand the market in the rural area.4. Banglalink can use the experience strong

network facilities.5. Banglalink can use soft switch network,

1. An upcoming mobile service providernamed WARID TELECOM a concern ofDhabi group and present market rivals.2. The invention of technology which is newmodern and consumer oriented.3. Another invisible threat is land phoneoperator.


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From the very beginning it is providing free TNT incoming:Banglalink is the onlyprovider which is providing T&T incoming free from the very beginning. Whether otheroperators providers providing such kind of facility just now.

Moreover its contribution to our economy can be notable: As a multinationalcompany Banglalink have a strong contribution in our national economy. Its one of thehigh profit generating in Bangladesh.

Low cost provider: The most remarkable success of Banglalink is the slump in tariffstructure. It is the lowest cost provider in Bangladesh telecommunication market. As soonas Banglalink announced its tariff the long lasting oligopoly between other private mobileproviders were shattered. Healthy competition came into the mobile market.

Analysis of Weaknesses

Lower number of human resource: The number of employee of Banglalink is too muchlower regarding its requirement. As a result the service quality and customer satisfactiongo down.

Failed to identify difference between developed market and developing market:Banglalink failed to identify the difference between developed market and developingmarket. There strategy making is not match with the current situation.

Weak management system: poor coordination among different functional department ofBanglalink as result service efficiency goes down.

The progress of development of network is far below from the subscriber expectation: theexpansion of network coverage is too much slow. People thought that Banglalink shoulduse the GSM network facilities; as a result Banglalink can cover the most of the area ofBangladesh.

Analysis of Opportunities

Banglalink can use the image of multinational organization: People want to better facilityfrom service industry. So Banglalink can use such kind of soft corner of consumers andpromote the service to them.

Introduction of new technology and services: Banglalink can implement new andconsumer oriented technology in this sector. Because people have inclination to new andmodern technology. Now a days people are ready to accept the new thing.

Expand the market in the rural area: Till now there is huge area is remain out of coveragewhere a huge number of target consumers are available. So Banglalink can bring thatrespective area under coverage and catch those potential consumers.

Banglalink can use the experience of multinational one of the old and experienceorganization in Bangladesh telecommunication sector. They have special experience


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about the consumer behavior of Bangladesh. They know about the consumers need andwant.

Banglalink can use soft switch network: The soft switch network separates the bearer andcontrol layers and a soft switch centric network can be built on different types of bearer

networks such as TDM, IP and ATM unlike, legacy network that depend on a singlespecific switching technology. Based on strategic planning and the developmental phase,an operator can select suitable bearer mode technologies for different phases, from theperspective of long term sustainable development, the IP centered soft switch networkdefines the future. So Banglalink can use this technology and practice competitiveadvantage over rivals.

Analysis of Threats

An upcoming mobile service provider named WARID TELECOM a concern of Dhabigroup: At present Bangladeshi mobile sector is almost saturated , after that a new

company named WARID is going to starts its operation in Bangladesh which going tobecome a big threats to Banglalink and other operators.

The invention of technology which is new modern and consumer oriented: Technology ischanging with day run. It changes the consumers demand pattern by offering differentattractive features. As a result consumer shifts from one technology to other technology,which might create a big problem to Banglalink and others.

Another invisible threat is land phone operator: In Bangladesh land phone operator isexpand the market with day run. People are switch from mobile to land phone operators.As a result ultimately the number of mobile user is decreasing and create problem to the

mobile operators as well as Banglalink.


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Recommendation


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Future Strategies

Though banglalink achieve the top poison in the market with other market leader, to survive andto hold own position in the market Banglalink has to take some other strategies. As there are sotough competition so from our empirical view these will be appropriate-

4. Low-cost leadership strategy5. Differentiate strategy6. Harvest strategy

Reason behind the strategy

Low-cost leadership strategy:As the competition is high in the market & competitors are also intelligent and scope finder sobanglalink should adopt the low cost leadership strategy.

Differentiate strategy:As all competitors in the market running in the same way & about same standard services areserving, so banglalink has to adopt some differentiate strategy to maintain present customer andto attract new customer also.

Harvest strategy:

When future growth appears doubtful or not cost-effective, companies want to harvest as the canfrom the product. It limits additional investment and expenses and maximizes short-term profitand cash flow .When banglalink will adopt harvest strategy it deliberately sacrifices its marketpoison in return for near term cash flow or current profitability. The intention of the company insuch a strategy is to earn immediate cash from the existing business& use the cash in other more

profitable business activities.

banglalink mba

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