PESTLE Analysis for Dialog Axiata

PESTLE digest for dialogue Axiata negotiation Telekom PLC (The Comp whatsoever) operates Sri Lankas largest and fastest evolution telecommunication network dialogue GSM. duologue Telekom is bingle of the largest companies listed under the capital of Sri Lanka Stock Exchange. It is a subsidiary of the Axiata Group Berhad. receivable to dialog the Sri Lankan prompt industry has achieved new heights and has come at par with the actual world.The telecom family operates 2G, 3G and 3.5G supple operate, halting the actual trends in active internet and mulmagazinedia serve, as benefitously as worldwide roaming. Dialog Telekom accounts for more than than 50% of Sri Lankan mobile ph star subscribers.Along with the mobile telecommunication military control Dialog Telekom operates a wide portfolio of international telecommunication services including retail and wholesale international voice and data services.Dialog wideband Networks Pvt. Ltd. (DBN) is an owned subsidiar y of the Company, and is an important player in Sri Lankas ICT infra grammatical construction sector. DBN was in any case the first service provider in Sri Lanka to introduce high-speed broadband internet services based on Wi MAX technology.Dialog picture Pvt. Ltd. (Dialog TV) is an early(a) subsidiary of Dialog Telekom PLC. It operates Dialog orbiter TV, a Direct-to-Home (DTH) Satellite TV service. Dialog TV supports a wide range of international and local television channels.Regarding the structure of the company, Dialog Telekom Ltd. has got a Hybrid structure which is a combination of Matrix structure as well as Modular structure. As in each Strategic Business building block (SBU) works independently and every function of each SBU has communication linkages with one another. Top down as well as bottom up communication is available and it social occasions worldwide resources and technologies.MICRO ANALYSIS THROUGH prink Analysis(S)trengthsDialog has the first proceedr adva ntage of GSM technology in Sri Lanka.Due to its strong infrastructure it has got one of the best and far range mobile telecommunication coverage.Relationship with a telecommunication tycoon in the same region Telekom Malaysia Group.Extension in collaborations maintaining intimately relations with other Telecom companies has enabled Dialog to have a global approach with services such as and Satellite Coverage high roaming.Dialog Telekom has got a very aggressive grocery storeing schema which enables it to have a good and stable Brand Equity.Companys financial analysis proved excellent stability in financial statements regarding investment fundss. absolute Public Relationship that has been built up over the geezerhood.Expanded CSR initiatives increase the social value of the firm.High part technical renewals has made dialog food market leader in Sri Lanka. unvarying rise in the shargon prices has gained the confidence of the investors leading to value increment.Strong distr ibution network spread through with(predicate)out the entire island..Well managed node c atomic descend 18 support techniques has increase the level of client satisfaction.Wide innovation of products.Management Team is efficient and hard-working.High level of corporate melodic overseas telegram knowledge retention through dispirited employee turnover(W)eaknessesThough the investment on advertising and value addition through technical innovation is high, there is no clear aim and idea of a broader marketPoor performance as on ISP.Comp bed to its competitors Dialog lags behind in innovations related to pricing strategies.The head office in Colombo is of a distributed nature due to non-expandability of the current location.The level of motivation of internal employees is decreasing.Due to the rapidly growing customer base the trends in Quality of assistance are going down by the day.In the front-office employee turn-over is high.(O)pportunities Telecom is one of the fastest gr owing sectors in Sri Lankas 19.5million peopleAs per estimations 4.5million users would have mobile phones by the end of 2006The communication industry is growing rapidly.Fixed inventory penetration is subaltern.The approval and acceptability of the harbor Added Services (VAS) by the users has increased the probability and succeeder of any new VAS initiative.The strategical partnership of Dialog Telekom with Vodafone UK.Dialog has got the probable to gain benefits of Value Chain Convergence. technology advancements especially in mobile multimedia technologies and the advent and use of the co barrierinous 3G mobile communications.(T)hreatsStrongest Competitor of Dialog, the Mobile wing of fixed line telecom giant SLT is focused on hail-cutting schema through its low cost pre-paid products in the market.Rapid changes in the policy-making, social and economic conditions as well as the laws and regulations.Changes in currency exchange rates and high ostentatiousness which is inversely affecting the global commercial enterprise.Rapid change in customer preferences and their growing needs due to high level of customer awareness. ageless changes in technology.Dialog had to switch off all base send in northern-province during the last few months due to military operations by the Sri Lankan Govt. forces. thusly there is an uncertainty due to the growing counter terrorist campaigns.PESTEL Analysis(P)oliticalSri Lanka has very positive unknown investment policies. hitherto though Sri Lanka identify importance of liberalization early as in 1977, due to political interventions bureaucratic attitudes inherited from colonial reign and poor governance, the country as a whole and specifically the industry has not grown as it was foreseen at the time of liberalization. During the past two decades, terrorist activities have remained constant as well.(E)conomicalUnstable macro-economic environment and trade policy regime has a disallow impact on the industry. Th e fall of the exchange rate over the years happened on a gradual pace.Since the inception of liberalization policy it has undergone immense reforms in this sector. However Sri Lanka lags dynamics incorporated by India to attract foreign direct investments. The attitude towards foreign direct investments needs to be improved.(S)ocio-CulturalSri Lanka has remedy social conditions for example literacy rate is high, infant mortality rate is low and life expectancy is long. The country also has an educated and trainable work force. barely Sri Lankans inherit a bureaucratic attitude from the colonial administration that results in inefficiencies and discrimination.(T)echnologicalSri Lanka depends on technology transfers from foreign direct investments. However TRCSL encourages local query and development.The country comparatively has not performed well enough to adapt proficient changes on a timely manner. For example the shift from analogue to digital and the fasten onion of CDMA te chnology materialized in a slow pace.(E)cological (L)egalTRCSL the regulatory body takes up multidimensional roles. It ensures fair enforcement of Govt. policy, hold operators accountable for performance, address consumer issues, varan changing industry needs and provide feedback to the policy making units.However TRCSL has been criticized over the years for information asymmetry, inefficiency and discrimination.Porters Five Forces 1. terror of New EntrantsIndias Bharti AIRTEL has got the twenty percent mobile operator license in Sri LankaAs per TRCSL, no more licenses would be awardedThus it creates an entry barrier for all others to the market2. negociate Power of CustomersConsumer protection groups are al or so non- activeAs compared to the west, consumers are not that strong in their demandsQuality standards and supports are comparatively not major concern if they exist at a basic level outset slip costsCustomers are highly cost conscious3. Threat from SubstitutesAlmost negligibleAlternatives are fixed line and the more late CDMA connectivityThis is a much smaller market as compared to the huge make out market4. Bargaining Power of SuppliersLocal and International suppliers for DialogDepends on SLT, MTT and a few other VSAT operators to access the national backboneThus these particular suppliers are extremely powerfulAcquisition of MTT and the creation of the new subsidiary known as Dialog Broadband Network5. disputation Among Competing FirmsVery high disputation with constant pricing warsDialog sure has an edge because of their Value Added Services and specialty strategy and the huge customer baseValue Added Services are becoming very common among the consumersStrategic Groups espouse by the CompanyDialog strategies are visual in the companys corporate, business and functional levels. They have already diversified their business across many areas during the last few years. For instance, by acquiring MTT, Dialog managed to strengthen its t ransmission backbone. Also recent past it has acquired CBNSAT, a major planet TV transmission company, and DERANA TV Channel with a long term objective of a value chain convergence. In addition to induce the customer, Dialog has created many alliances with other business corporations. Cargills-Dialog alliance to allow Cargills customers to ensconce Dialog bills is just one such example.The business plan is conjecture at the beginning of the year considering main objectives of the company. The progress of each externalize is monitored in a monthly basis through different strategic committee meetings.On the other hand, Dialog tries to introduce latest technologies into the market considering global mega trends through its comprehensive Research and Development wing.Among them, the Dialogs initiative to frame-up the Dialog Research Lab at the University of Moratuwa is of importance because it effectively enabled Dialog to provide tailor made solutions to the local market. Nokia ph ones with Sinhala language support and Tsunami warning dodging for mobiles are just to name a few such examples. These technology initiatives squeeze out be considered as a strategy used to capture the market by effectively staying ahead from the competition in the technology and innovation sphere.StructureThe Companys business and operations are managed under the supervision of the identity card of Directors comprising of 5 non-executive directors and 1 executive director. The Board has the power to appoint executive directors including the CEO. Divisional structure can buoy be set in company level but performances of the divisions are metric through different strategic committees.SystemsApart from the technical backbone, Dialog uses several(prenominal) systems to execute their business strategies successfully. For example-SAP ERP (Enterprise election Planning) This was launched in 2006 January to integrate identified key process in the company.CCBS (Customer Care Billing S ystem) Currently alert billing system is going to be migrated into a new system to provide more customer centric services.HRIS Used for Human Resource Management and all the day to day functions are carried out through this system.StyleThe management style always depends on targets and objectives. Strict deadlines are imposed while performance and progress are very intimately monitored at all levels of the organizational structure. Rewards and benefit schemes are in line for the top performers and better achievements.All the employees will have a number of recreational opportunities such as trips, get-together, sports etc. to take most time off from busy work schedules.StaffThe Company currently employs a workforce of 2500 who in turn are considered pivotal to the organizations reaping and success. yearly manpower planning and recruitment is carried out in parallel with the business plan preparation. The capabilities required by potential employees are based on the requirement s of the business plans applicable to respective departments of the company in any disposed(p) year. Recruitment to the Company is governed by several policies. The core policy on filling vacancies spells out the Companys intention to attract the best with the aim of exploiting the individuals potential while providing career development opportunities irrespective of communal or sex activity departures. 7% of the total HR cost is devoted to planning and development. The training needs for individuals and police squads are identified from the competency requirements arising from the Companys business plan and employees yearbook performance review.Subordinate GoalsAll individuals with different backgrounds, different ethnics and nations are teamed up and driven towards a common set of goals and objectives at Dialog Telekom. The company has been successful in focusing the entire team towards a single(a) vision by incorporating all individuals goals and personal objective togethe r.SkillsDialog team consists of number of individuals with distinctive capabilities and competencies from top to bottom. Dialog is proud to have a very energetic and talented CEO in the caliber of Dr. Hans Wijesuriya. In addition to that Dialog is served by a team of top split individual in the Sri Lankan industry with lot of talent and exposures.Different Strategies Adopted by Dialog TelekomCorporate StrategyConsidering the current performance, the key success factors and the SWOT analysis the directional strategy elections would be the following return strategy to expand the activities of Dialog Telekom further would be the first alternative. Since the current product lines have real growth potencial concentration of resources on those would be ideal. In concentration Dialog Telekom can follow the vertical growth strategy to take the benefit of the value chain convergence fortune that is existing in Sri Lankan context.Stability strategy to continue with current activities with out any changes to the direction would be the second alternative. Here Dialog Telekom can employ pause/proceed with caution strategy to have only additive improvements while the weaknesses stated are overcome. It can use this time to calm the organization due to the changes took place due to multiple strategies it adopted front such as acquisitions and investing on innovative developments, which will attend to get back the loosing internal employee motivation.The first alternative will move Dialog Telekom further away from the competition and create a monopoly temporarily for converged industries of telecommunication, content, media and retail. However unfocused highspeed growth to capture the market without stabilizing the existing acquisitions can disassemble everything. The second alternative will give Dialog Telekom and its employees much needed breathing space.The recommendation would be to implement the second alternative initially to stabilize the organization without a ny other drastic change in the direction. And after some time they can adopt their long term beneficial value chain convergence alternative depicted in first alternative.Business StrategyThe business strategy alternatives available for Dialog Telekom to improve the competitive position in the industries it operates would be The first alternative for the competitive strategy would be to improve on the current strategy of differentiation. It can improve this by having unique Value Added Services for each of its current strategic business units DBN, CBNSAT and Dialog Telekom itself. This can improve the customer loyalty and thereby can charge a reasonable premium rate than competitors.Second alternative which Dialog Telekom can try to implement is cost leadership to overcome the threat of start out rates provided by competitors, Mobitel. Since the VAS are less in Mobitel the switching from Dialog to Mobitel is not much in urban people who use these VASes. But people who are using pur ely as a voice/sms only are shifting as most of them are cost conscious and there is not much of a difference in coverage. Hence if Mobitel improves on its VASes it would become a serious threat at a stage at which only the rates would try the attraction of that segment of the market.Typically the differentiation strategy is more apt(predicate) to generate higher profits than low cost strategy. However differentiation strategy implementation may involve higher investment than low cost strategy.Competitive scope is an important factor when considering competitive strategies. The recommended alternative depends on the competitive scope in this situation. Considering both alternatives and the pros and cons of each most ideal would be to have culmination of both differing from the segment of the market. Dialog Telekom should have a focused differentiation strategy in the market where people are valuing the VASes and cost focus in the market where utilization is purely for voice/SMS.S imultaneously Dialog Telekom should look at strategic alliances as a corporate strategy to gain competitive advantage by working with other organizations. Currently they have stated this with some banks and some supermarket bondage as mentioned earlier. However this can be immensely improved to include alliances with insurance companies, stock brokers, popular food chains etc.