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Analysis
The document provides a case study and business plan for an Indian telecom organization, XYZ, to enter the telecom market in the UAE. It includes an agenda, background research on the UAE market structure and major operators, a SWOT analysis, and a marketing penetration strategy. The strategy proposes a prepaid pricing model to differentiate XYZ and target youth, with an initial $70 million marketing budget focused on quirky advertising.
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Analysis
- 1. CASE STUDY :XYZ TELECOM ORGANIZATION ENTERING INTO UAESUBMITTED BY:PRATEEK SIGH [email protected]
- 2. AGENDAThree objectives :1.Secondary research for the XYZ organization.2. Create a Methodology for successful entry. 3. Provide a sustainable solution for business.
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- 5. Mobile Penetration Ratesin Middle East
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- 7. AssumptionXYZ is anIndian organization with a good financial for the development of infrastructure.Is looking to invest in UAE.Has considered all the legal consequences that are applicable in UAE.Company is looking for quick launch within 3 to 6 months time span.Research methodology used for the firm would be according to current scenario and it can have secondary data research.Company is having Approx $ 70 million for marketing BudgetCompany has a brand name that consumers perceive as value for money, quality, innovation and an aspiring degree of fun and competitive challenges.
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- 10. Telecom revenues breakdownin 1H09 (rounded figures) The telecommunications sector in the UAE experienced dramatic growth between 2003 and 2008. Revenues tripled, reaching AED 27.72bn in 2008 vs. AED 9.2bn in 2003, whilst the telecoms sector contribution to UAE’s total GDP increased from 3.1% to an estimated share of 5.2%.
- 11. Even in1H09, amidst a global economic slowdown, telecom revenues rose by 12%, reaching AED14.5bn. 59% of these revenues were generated from mobile services, whilst data services and fixed-line generated 14% and 13% respectively.Market StructureTelecom marketMobile SegmentInternet Segment•Introduction of competition•Inflow of expatriate•High GDP per capita•Dual SIM card usage•Intensification of competition•Network upgrade by operatorsSkilled citizens• Advanced IT infrastructure• Expanding broadband connectivityFixed-line Segment• Real-estate roll-out in New Dubai• Competition on the international calling front• Spread of FTTH network• Provision of triple-play service
- 12. Subscriber 4-year CAGRby segment (2004-2008)
- 13. UAE mobile subscribersand YoY growth
- 14. Operators net additionsand market share (quarterly)
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- 22. Competitive Analysis ofRivals
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- 24. SPACE Matrix StrategicManagement Method
- 25. SPACE MATRIXY AxisSuggestedStrategyType2.75325X Axis
- 26. S T PAnalysisSegment : Age Structure: 0-14 years: 20.4% (male 500,928/female 478,388) 15-64 years: 78.7% (male 2,768,030/female 1,008,404) 65 years and over: 0.9% (male 27,601/female 15,140)note: 73.9% of the population in the 15-64 age group is non-national (2009 est.)Target : Youth (12-29) 35% approx.Positioning :Youth and Mobile:
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- 29. Dynamic change oftaste.
- 30. “They are thehousehold chief technology officers” (enjoys figuring out new feature)
- 31. Impressed by viralapplication and use messaging to keep in touch. How to position
- 32. Access to brandedaccessories andphones like Iphone, Google and BlackBerry and Brand accessories like MTV which represent hip-hop and youth culture.
- 33. Text messaging: thisshould be free between XYZ Customers.
- 34. Rescue Ring :A fake call at any time the customer wants with what ever massage the customer want to hear from us.
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- 36. Wake up Call: Alarm for customer.Ring tones : latest ring tones for various nationality.
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- 38. Fun Clips :Cartoon clips, youtube clips, Uploading clip to youtube.
- 39. Social networking Sitefeatures for the customer like facebook any myspace.
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- 41. Movies : Onlinemovie viewing on their Mobile set.
- 42. AirTime Earning Scheme: Call your friend on XYZ network and earn some air time.Options for price structureClone Industry Prices: contractsSet prices below competition: contractsA whole new plan: prepaid pricing
- 43. #1 Clone Industry PricesCons
- 44. May drive marginsdown if additional features are costly
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- 46. Difficult to penetratesaturated market with similar offer as competitors
- 47. Competitive with othercell phone providers and packages; does not support strong market differentiation
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- 49. Give customers morefeatures for the same price
- 50. Easy to promote,use current models
- 51. Limited spending poweron promotion may be a justifiable factor
- 52. Viable with VirginMobile’s limited advertising budget#2 Price Below CompetitionPros
- 53. Drive sales andmarket share
- 54. Accounts for limitedspending power of target market
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- 56. Margins and profitabilitywill be driven down
- 57. Inconsistent with companygoal of profitability
- 58. Cannot compete inprice wars
- 59. Not a longterm solution#3 A Whole New Plan: Prepaid PricingPros
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- 61. Cater to theneeds of target market
- 62. Flexibility is attractiveto target market
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- 64. Eliminates risk ofmissed payments
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- 66. Risk of limitedreturns and loyalty
- 67. Churn rate mayincreaseMARKETING PENETRATIONPricing Strategy : Option 3 from the above Strategies
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- 71. Current market penetrationof target market.
- 72. Create Demand amongstremaining.
- 73. Capitalize on HighlyElastic Demand of Target Market.
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- 75. Monthly Cost toServe per Customer
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- 77. Customer Service CostPricingMethod :
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- 79. Costs per Unitis inversely related to Number of Subscribers
- 80. Reduce CCPU byincrease in Number of Subscribers
- 81. Increase in Marginwill followLTV=Life Time Value.ARPU= Average Revenue Per Unit.CCPU=Cash Cost Per Unit= 45% of ARPU.M=Monthly margin =ARPU-CCPU.AC=Acquisition cost.r=Retention rate= 1- churn rate.i=interest rate.
- 82. AdvertisementMarketing budget $70million.Quirky and offbeat advertising, different from the competitors.Street marketing.Teens to be used for marketing.Youth magazines like The Complex, Vibe,…etc are to be used to publish “advertorials.”
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Editor's Notes
- #4 Gulf Cooperation Council
- #12 16.5% Emirati, 83.5%South Asian, Indian,Pakistani, Bangladeshi,Chinese, Filipino, Thai,Iranian, (Westerners)
- #13 Compound annual growth rate
- #26 1. Market development2. Market penetration3. Product development4. Forward integration5. Backward integration6. Horizontal integration7. Concentric diversification