MERIDICOM:
The
largest telecommunications player in the country with business segments spread
into Broadband, Landline & Mobile network services.
TELZIP:
A
small mobile network operator with current market segments in Landline and
Mobile network services
MARKET
SHARE DISTRIBUTION:
PROBLEM
STATEMENT:
· TelZip, strategies to break into new markets i.e Broad band service provider, by offering free broadband service to business customers who were willing to leave their current service provider and enter into a long-term contract.
· TelZip published an advertisements “Free broadband forever with TelZip! Save at least €450 a year when you switch from Meridicom!” A direct threat to Meridicom’s Broadband business by targeting Business customers.
· Lack of common goal and integration among business units of Meridicom
PROBLEM
ANALYSIS:
Providing Free
Broadband connection by Telzip can kill the broadband market share of
Meridicom, which in turn will capture the market share of Landline as both the
services are equally demanded by Business
customers. This transition will take some time.
Other customer segments (Individuals,
young population, students etc) will choose the broadband of Telzip for free
and will switch faster to TelZip. Simultaneously they may opt for Landline and
mobile services with a good packaged
deal from TelZip.
The
25% Mobile market share of TelZip will obviously opt for the broadband
services in first phase, which will impact directly on Meridicoms Market share
of Broadband.
COMPETATIVS
ANALYSIS
Considering the
medidicom and Telzips services under BCG matrix, it is found that Meridicom is
in an extremely better position. But Telzips foraying into Broadband services
with Free broadband can make a shift change in the matrix. Hence Telzips threat
cannot be taken lightly as done in the past.
BUSINESS
SOLUTION:
Considering the
experience of Meridicon in tackling business competition in past and still
maintaining itself as a Market leader in Broad band services, the direct threat
from TelZip can be looked as an opportunity to address the Weaknesses(refer SWOT
analysis of Meridicom) to take a combine business decision to be maintained as
a leader.
ACTION
POINTS FOR MERIDICOM:
OBJECTIVE:
-
FOCUS ON MARKET
SHARE ON YEAR 1
o
To sustain the existing
market share and customers
o
25% growth in
market share in Mobil network services, 10% growth in Broadband & 5% Growth
in Landline in a Year.
|
BUSINESS UNITS
|
CURRENT YEAR
|
YEAR 1
|
||
|
MARKET SHARE
|
REVENUE CONTRIBUTION
|
MARKET SHARE
|
REVENUE CONTRIBUTION
|
|
|
LAND LINE
|
85%
|
70%
|
90%
|
70%
|
|
BROADBAND
|
60%
|
25%
|
70%
|
25%
|
|
MOBILE
|
5%
|
5%
|
30%
|
5%
|
-
FOCUS ON REVENUE
AND PROFITABILITY ON YEAR 2
STEP-1:
IMMEDIATE ACTION (Within 15 Days)
-
Role
out an campaign to emphasis on Strength (Quality,Trust, Brand value).
Communicate to existing customer for feedback on services and potential
improvements.
-
Integrate
the customer service and the billing system as a single window services for
customer convenience.
-
Bring
a new Profit sharing formula for the benefit of all business Units.
Incentives to be
based on : Corporate performance(50% weightage)+Business Unit performance(30%
weightage)+Individual performance(20% weightage)
o
In
case one business units( say Mobile Unit) will have to compromise in pricing
for business advantage, the profit made by other business units( Land line
& Broad band) will be considered as a notional profit by the unit (Mobile
Unit) for incentive calculations for Mobile unit also.
STEP-2:
(Within 1 Month)
-
Considering
the market share vs revenue contribution of different business Units also considering
the potential 25% of the mobile customers of Telzip, who are going to move
first towards Telzip broadband, launch a discount scheme on Mobile services.
-
Provide
following schemes to customers:
-
Free Mobile
services for one year, 10% discounted rate on second year onwards to individual
households/customer having Meridicom Landline and Broadband connection.
-
50% Discount on
all services between 10 pm to 10 am.
-
For
Business customers provide “Free Mobile
services to business customers having Meridicom Landline and Broadband
connection.”
-
Business Houses
who opted for 200 connections, No upfront fees. Per Month a fixed amount to be
charged. Every user will get certain free usage.
This is expected
to capture the Mobile market share of TelZip and maintaining the market share
in Broadband and landline. It will cost
only the 5% of the revenue in the first year that Meridicom gets currently from
Mobile services. But it will add on the revenue from Broadband and landline
business Units and increase market share in Mobile network services.
STEP-3:
(Within 1 Year)
-
Continuos
improvement in customer services and Technology:
o
offers
broadband on DSL,IPTV dedicated enterprise services
o
IP
based services like high-speed internet access, video-on-demand services
o
value
added services including mobile money, mobile health, etc besides offering
regular mobile and fixed line telecom services
-
Focus
on quality of subscribers
-
Cash 10% of profits to
sustain investments
To sustain the market leadership, continuously
review the performance of each services, balance sheet and review markets and
customer feedback.
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