Introduction

Q - TELECOM

Introduction

The purpose of this assignment is to create and produce a report, which will include a clear organization analysis of Q - Telecom. The format and the layout of this paper will be presented generically. Moreover, all the included information will be provided in such a way to gain a good understanding of the structure and the strategy of the company.

The related information has been collected from and processed based on official published material, as well as other sources, mainly the Internet.

COMPANYS PROFILE

Q-TELECOM, a division of Info-Quest, is the first, Greek private integrated Operator, which aims to provide combined services of mobile/fixed telephony and Internet.

Focusing its commercial activities in the large urban centers, Q-TELECOM develops a second-generation mobile telephony network, with the installation of Base Stations as well as a broadband Fixed Wireless Access network, point-to-multipoint, operating at 3.5 GHz range. Simultaneously, it develops a national network with the use of leased lines and privately owned transmission systems. Also, Q-TELECOM is directly inter-connected with OTE and the three others mobile operators and has a national roaming agreement with VODAFONE. Thus, it offers, since its commercial launch, high quality voice transmission, high transfer rate of call switching and also offers pan-Hellenic coverage.

Q-TELECOM provides a wide rage of integrated telecommunications solution and services for businesses and home users. Q-TELECOM is a pioneer in the Greek market by offering, from the beginning of its launch, combined services of mobile telephony with the prefix 699 (prepaid and postpaid), SMS and fixed telephony via the Carrier Selection Code 1765. Q-TELECOM differentiates itself by providing customized services, per second billing from the first second of the call, elimination of set-up fees, mobile number selection, preferential rates with Q-Family, the lowest tariff for SMS from the first SMS, added value services, etc.

In the first trimester of its operation, Q-TELECOM has established more than 900 selling points all over Greece, by exploiting alternative distribution channels such as ACS courier.

Products / ServicesMobile telephony

Q Telecom is the first Greek Private Mobile Communications Operator. It provides mobile telecommunications services via the prefix 699 and has been allocated ten million mobile phone numbers. Q Telecom immediately activated its mobile telephony services nationwide after signing a national roaming agreement with Vodafone.

Within the framework of each service, the company offers: pre paid and post paid mobile telephony international roaming multiple telephone numbers value added services SMS and instant messaging multimedia messaging - content providing data / fax transmission mobile internet directory services.

Fixed telephony

With regard to Q Telecoms activities in the field of fixed telephony, the company has acquired the Carrier Selection Number 1765, as well as a large number of geographical (1.2 million) and non geographical numbers.

The fixed telephony services include: fixed telephony with the use of geographical and non-geographical numbers, fixed telephony with the use of four - digit code (1765) and the sale of pre paid telephone cards with the use of a free phone number (807).

Environmental analysis

For a successful environmental analysis we will use the P.E.S.T.E.L. analysis, five forces analysis and from S.W.O.T. we will analyze the opportunities and threats.

The most important factors that may influence Q Telecom business strategy and become threats are:

Imitation. Q-Telecoms differentiated products and services can be copied from the competitors. For example Q offers contracts without fixed cost and the threat is that the competitors can copy our strategy.

Market share. Market share can become a threat when the firm provides the market with a new service and in the meantime the end user instead of choosing our offer, prefers the offer of the competitor. That happens because the market is already satiated with mobile services.

The beneficial position that our competitors has, as far as concerns the investments. The three operators (Vodafone, Cosmote, Telestet) exist in the market more than ten years. They receive the profits of the investments that they have done the first years of their existence in the market. Q Telecom is in the position that tries to invest the money of Quest Group and fulfill its long-term objectives.

Low marketing investments. The company has limited budget and tries to invest it to the most important factors that will influence its function, such as sales, finance, purchasing, customer care, HRM and research and development. The firm should focus on marketing activities, in order to gain the faith and the recognition of the consumers.

The return of money for rending Vodafones network. Q Telecoms threat is the huge amount of money that should pay every month to Vodafone, in order to use its network. How Q Telecom can modify threats to opportunities?

Generally, the companies try to modify their threats to opportunities, in order to more powerful within the market. Therefore, Q Telecom will try to modify its threats that are mentioned above, to opportunities as described below.

Opportunities.

Huge demand of telecommunication services. Customers and especially large accounts have the require for quicker transmission of information in a first place, and secondly the transmission of data through sms, e-mail. This market status helped Q-Telecom to become the fourth operator and provide telecommunication services with high standards.

Development of Q-Telecoms network. Q-Telecom has the opportunity to build its own network and to become independent from Vodafones network.

Development of LMDS service. The development of new services such as LMDS can differentiate Q-Telecom from the other three operators and expand its market share.

P.E.S.T.E.L. Analysis

Political/Legal. The political stability in a country influences a business performance. Also the law and the decrees of the country have influenced the function of the company. Q as a new firm in the telecommunications market is forced to follow the agreements, which have been voted when the first telecommunications companies started its function in Greece. That happens because Q does not have the power yet to influence the political environment and descisions that have to do with telecommunications services.

Economical. If there is a decline in the economic situation of a country with high inflation rate and low Gross Domestic Product (G.D.P) this will cause problems to businesses. The economical factors which affects the performance of Q-Telecom has to do with the economical of the country. Greece has a strong currency, which is uro and it is strongest than the U.S Dollar. Greece Gross Domestic Product has increased 4,3%. Something, which is important for Q-Telecom is that the investments in Greece have increased 11,3%, the interest rate is at 4% and the inflation rate is at 4,3% (See Appendix A). The unemployment the last years has decreased from 12,4% to 10,9%. The wages have increased at 2,5%. What can influence Q-Telecom are some perspectives for the future, which can affect the company and especially has to do with exports. Exports in the future will be decreased at the level of 6,6% and will happen because of low competition and the decline of external demand. It is important to mention here is that the infrastructure has been developed the last years. Transportation has been developed with Metro stations and the National Roads Grid. Moreover telecommunications has been developed too, because with the entrance of new communication companies the competition has increased and the quality of services have increased too. Finally banking increased the last years because of the entrance of new international parties that they provided customers with new banking services for better quality of servicing.

Technological. The technological change in an organisation has the most rapid, persistent and profound effect and influencing the type of products and services. Q-Telecom is oriented towards taking full advantage of the opportunities presented by technology. The firm uses C.R.M (Customer Relations Management) in order to provide high quality of services. The firm has the best system for its database and it is at the start up spot to provide best quality of control of its customers. This procedure helps the business to provide better after sales services and support. Moreover S.A.P is the best system for delivery customer orders and gives the ability to Q-Telecom to distribute its products Just In Time. With these tools the employees have better methods of communication with their colleagues and their customers. Finally they utilize their skills in a better and quickest way.

Socio-cultural. In this factor of the P.E.S.T.E.L analysis Q-Telecom has many common elements with the Greek culture. This happens because this company is a Greek company and all the members, form the staff up to managers have the Greek citizenship and they have the knowledge of Greek culture. The cost of the communication services that Q provides the customers are very low and they intend to all the social classes and especially to lower classes which they cannot afford high invoices. The communication services that Q provides appeals to all the levels of education because they are simple and functional.

Environmental. In order to built a network that corresponds to customers needs Q should consign antennas. These antennas should be consigned in critical areas. According to the international law and the statistics that the Environmental Protection Companies provides the mobile antennas should be placed five to six kilometers away from residential areas, schools/universities, and in general away from places where many people leaves.

Five forces analysis

Threat of new entrants. A new entrance into the telecommunication market will bring extra capacity and competition. For Q Telecom, an entrance of a new competitor will mean a threat in terms of losing an amount of existing customers who will be attracted by the competitors services. However, the most significant threat is the decrease of the market share that is already maintained among the competitors. Prices, promotion activities, bonuses to the end user and some extra offers, helps the firm to retain and develop its market share. In order for the business to avoid the entrance, can use some barriers that are described below:

Existing loyalty to major brands.

Scale economies.

Access to distribution channels.

Government restrictions or legislation.

Competitors. Within a market, competition can be very intensive among competitors. The telecommunications market share is devided in three equal parts so that has an effect to little differentiation of services, products and small latitudes of growth This has an effect no domination from either of the big firms, little differentiation of products services and lastly small latitudes of growth. In the mobile network market we have three large competitors (Vodafone, Telestet, Cosmote). Afterwards Q Telecom is an upcoming company, which has a year within the market.

Power of suppliers. There are two types of markets, the one that the suppliers depend on the companies and are controllable. The other, in which suppliers are in the position that they set the rules of bargain and companies have no option in bargaining procedures. The differences that the two markets have are the number of suppliers. What can be obvious is that the more the suppliers, the less power they have, so the companies prefer to be part of this kind of market. The only supplier that Q Telecom purchase its products, is ORGA. This firm provides Q with the sim cards and the scratch cards, which are renewing the talk time. The disadvantage of this market is that there are few suppliers and they can set their rules in the bargaining procedures and the companies cannot control them.

Power of Buyers. Buyers are those who may have the biggest impact of the companys act within the market. If they are few they can demand more in order to satisfy their needs and wants. Another issue is loyalty at the brand name of the company. If they wont trust and believe to Q-Telecoms brand name they will not trust its products and services. Finally, what is understandable is that the customer who will purchase in large quantities will be treated better and could ask more from the company. For Q Telecom there are two types of buyers, in the first type, are those that buys large quantities and act as a distribution channel and those who purchase for themselves packages and new connections.

What is important to be mentioned here is that Q-Telecom did not have the threat of substitute.

Internal environment

For a successful internal analysis we will use value chain analysis and from S.W.O.T we will analyse strengths and threats.

VALUE CHAIN

To analyse the specific activities through which firms can create a competitive advantage, it is useful to model the firm as a chain of value-creating activities. The value chain analysis is divided between the primary value chain activities and secondary value chain activities or support activities. Primary activities consist of inbound logistics, operations, outbound logistics, marketing & sales and service.

The inbound logistics include receiving, warehousing and inventory control of input materials. This activity is included in Q-Telecom and it is working properly.

Operations. Operations are value-creating activities that transform the inputs into the final product. Operation activities do not exist in Q-Telecom because the firm does not produce products and it offer services, so it cannot transform the inputs into final product.

Outbound logistics. Outbound logistics are the activities required to get the finished product/service to the customer including warehousing, order fulfillment. This activity does exist in Q-Telecom and it works effectively.

Marketing & sales. Marketing and sales is another activity that does not exist. Marketing and sales are those activities associated with getting buyers to purchase the product, including channel selection, advertising, pricing.

Service. Finally service activities are those that maintain and enhance the products value including customer support and repair services. Service activities do exist in the company and especially works in a high quality level.

Secondary value chain activities or support activities are divided between procurement, technology development, human resource management and firm infrastructure.

Procurement. Procurement is the function of purchasing the raw materials and other inputs used in the value-creating activities. This activity exists in Q-Telecom and the only supplies came from ORGA. This activity works effectively in the company.

Technology development. These activities include research and development, process automation and other technology development used to support the value-chain activities. Technology development activities exist in Q-Telecom because everyday there is an implementation of the technology in order for the company to have better quality in services and to satisfy its customers.

Human resource management. Human resources activities associated with recruiting, development and compensation of employees. These activities exist in the company and it works very effectively because the company wants from the recruitment to choose the appropriate potential employer and from those who are already works in the company to develop their skills through seminars.

Firm infrastructure. Firm infrastructure includes activities such as finance, legal, quality management etc. the firm infrastructure does exist but in some specific activities such as quality management and product management works in a n effective level. Because of the fact that Q-Telecom is a new firm in the market is trying to build its reliable infrastructure step by step.

What is important to be mentioned here is that Q-Telecom makes outsourcing only at advertising activities. Q has a marketing department but an advertising company, which is called CREAM, organizes the spots on television and this firm is responsible to negotiate with television channels for the media program.

STRENGHTS.

Oligopoly. One basic strength is that Q-Telecom exists in an oligopoly market. The open-up of telecommunication in Greece boosted companies to enter the market but also there was also margin for companies like Q to enter the market. Because of the oligopoly in the market there was also margin and for Q-Telecom for high profits. In spite of the fact that there are only four telecommunication companies they meet the needs of the customers.

WEAKNESSES.

Technological addiction. Because of the fact that the consumer needs are increased it is necessary for Q to implement its technology in order to follow the growth rate of the market and the companies, which exist in it.

COMPETITIVE ADVANTAGE.

A competitive advantage is a factor, which enable a firm to compete successfully with competitirors on a sustained basis.

A competitive strategy requires the organisation to decide whether to compete across the entire market or only in certain segments and whether to compete through low costs and prices or through offering a differnetiated product range.

Q-Telecom has a different competitive advantage than its competitors. Usually competitors are trying to promote at the market a differentiated product that none of the competitors can have it. Q-Telecom collaborates with ACS courrier and all the products that customers prescribes from us are delivered at them after one or two days. On the other hand products that are prescribed from companies such as Vodafone, Cosmote and Telestet are delivered to customers after six or seven days. Generally Qs competitve advantage is that it collaborates with ACS courrier and its products are delivered on timewith low cost for Q-Telecom and its customers.

On that way Q-Telecom can be can be more flexible and unpredictableto our competitors.

PRODUCT LIFE CYCLE

The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots, as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline). (See Appendix B)In theory it's the same for a product. After a period of development it is introduced or launched into the market; it gains more and more customers as it grows; eventually the market stabilises and the product becomes mature; then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn. However, most products fail in the introduction phase. Others have very cyclical maturity phases where declines see the product promoted to regain customers.

Strategies for the differing stages of the PLC

Introduction The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution.

Growth Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilise.

MaturityThose products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilise. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and uses a greater variety of media.

DeclineAt this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting.

Q-Telecom has entered the market a year ago, thus its services are at the stage of introduction. As far as concerns the comparison between Q-Telecoms services and the competitors, the positioning of Q services is high quality and numbers few services. (See Appendix C).

The Boston Matrix

The Boston Matrix is used for what is known as Product Portfolio Planning. It involves the use of graphic models to develop a relationship between two variables known to be of significance in the corporate context: Market Share and Market Growth.

The framework provided by the matrix can offer guidance in terms of developing appropriate strategies for products/services and in maintaining a balanced product portfolio ensuring that there are enough cash-generating products to match the cash-using products.

The Boston Matrix oversimplifies product analysis. It concentrates only on two dimensions of product markets, size and market share, and therefore may encourage marketing management to pay too little attention to other market features.

It is not always clear what is meant by the terms market share and rate or market growth. Not all companies and not all products will be designed for market leadership and in case of Q-Telecom, describing performance in terms of relative market share may be of limited relevance.

The Boston Matrix imitates the Product Life Cycle, Cash cow = Introduction, Star = Growth, Question mark = Maturity, Dog = Decline. The Logic is that the income from the cash cows is used to both promotes the Question mark from becoming dog, whilst also used to feed Research and Development to make future products/services. The income from Star and Question mark is used to support the business. Dog should be reduced as much as possible or placed into niche markets.

Job satisfaction and Work Performance

Empowerment

Empowerment is generally explained in terms of allowing employees greater freedom, autonomy and self control over their work, and responsibility for decision making. Empowerment takes a variety of forms. Managers frequently have different intentions and organizations differ in the degree of discretion with which they can empower employees. Q Telecom applies a combination of two techniques of empowerment, through participation and through commitment. This combination is beneficial for the company and the employees as well. Through this procedure, the advantages for the company are:

The decision-making process can be speeded-up as well as the reaction times.

It releases the creative innovative capacities.

Empowerment provides for greater job satisfaction, motivation and commitment.

Enable employees to gain a greater sense of achievement from their work.

The above mentions make the employees work as a team and provide a dynamic environment within the company. Furthermore, these elements build a decentralized company and organic environment. In order to fulfill these conditions the staff must be multi skilled. Consequently, the span of control of Q Telecom is wide. (See Appendix D).

Q-Telecoms strategy

Q-Telecoms strategy is integrated at:

Focusing at the low prices of the services and tries to maintain the quality of the service

Innovation that targets at the creation of new features.

Factors that contributes in order to achieve low cost and differentiation are:

The E.R.P system

Total Quality Management

Limitation of the offerning products and services.

RECOMMENDATIONS-PROPOSALS

Our proposal for Q-Telecom is:

Firstly, Q needs to be separated from Quest Group (Info Quest).

In addition an important challenge for the business will be an entrance of a new cooperator, who will obtain a part of the share capital of the company.

The advantages and the benefits of such a strategic movement is described below:

Increase of the capital in order for the company to build its own network.

Opportunities for increasing its share capital and as a result the capital will be increased as well.

Know How. Q-Telecom will implement the telecommunications Know How, which will be provided from people who are experienced in the market.

Expanding of the firm to the worldwide market and influence its culture.

Organisational Structure

Appendix A

Appendix B

The Product Life Cycle (PLC)

Appendix C

Appendix D

Cosmote

Vodafone

Telestet

Q-Telecom

Question mark

Dog

Star

Cash Cow

High quality

Low quality

Many services provided

Few services provided

HIGH

LOW

HIGH LOW

Market Growth

Market share

C.E.O

MANAGEMENT

EMPLOYEES

Laurie J. Mullins, Management and Organisational Behaviour, 5th Edition, Prentice Hall, pg. 652.

Laurie J. Mullins, Management and Organisational Behaviour, 5th Edition, Prentice Hall, pg. 653.

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