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“Leaders don't look behind, they don't look to the side; they look ahead. So as far as I am concerned we are looking to be the
best telecommunication service provider in the world. We have been recognized by major agencies in the world as
being amongst the top and we are ranked with the best in the world. So we benchmark not just with our peers here, but we
benchmark with the best in the world.”
‐ Anand Mahindra, Chairman, Tech Mahindra Ltd.
Telecom sector The telecom sector in India experienced a rapid growth over
the past decade on account of regulatory liberalisation, structural reforms and competition
Besides, the growth in the service and IT and ITeS sector also increased the prominence of the telecom industry in India.
Telecom has emerged as a key infrastructure for economic and consumer growth because of its multiplier effect and the fact that it is beneficial to trade in other industries
Types of telecom sector
Telecommunication service provider
Telecommunication equipment manufacturers
One of the largest business conglomerates in India◦ Incorporated as Mahindra & Mohammed on Oct 2nd 1945 by Mahindra
brothers & Ghulam Mohammed◦ Renamed Mahindra & Mahindra after Ghulam Mohammed’s exit in
1947◦ Over the next 60 years, it diversified its operations across various
sectors like automotive, farm equipment, trade & logistics, hospitality, information technology, infrastructure, financial services◦ US $ 6.7 billion group
1986 - Joint venture between Mahindra group & British Telecommunications plc◦ Company was named Mahindra-British Telecom (MBT)
1960 - Indian government set up Department of Electronics (DOE)1970 - The first software was exported by TCS1980 - Industry managed to reach USD 12 millionMid–1980 - Emergence of new players like Infosys, Satyam, Mastek, etc
(body shopping)1991 - Shift from body shopping to working from offshoreLate 1990 - High growth : ‘Y2K’ problem, STP scheme by govt.2000 - Dot com bubble burst2002 - Fastest growing IT market and captured 70% of IT outsourcing market2006 - High‐end software services - BFSI, telecom, retailing and automotive
segments2008 - Global recession – US companies slashed their IT spendings
Oracle Financial Services Software
MindTree Ltd.
MphasiS Ltd.
Patni Computer Systems Ltd.
Vakrangee Ltd.
Persistent Systems Ltd.
Hexaware Technologies Ltd.
A very clear focus on the telecommunication industry◦Achieved a clear objective & strategic alignment by focusing on one segment◦ Clarity of goal
By enhancing business with existing clients
By client acquisition in long run. By using geographic expansion. By moving in TEM manufacturing segment. By innovation of customized application solutions.
YEAR DECISIONS REASONING RATING
1986 – 2006
Entered IT sector: JV with British Telecommunications
Strategic pre-emption – Mahindra wanted to enter into the business -found the resource & expertise of BT would enhance growth in Indian Software Industry.
2006 JV with Motorola Inc. under the brand name CanvasM
Field of telephone software was booming and providing expertise in that domain would decrease the institutional voids
Post 2006
Expand geographic presence
•Incorporation of MBT GMBH (Germany):Re-certified to ISO 9001:1994 by BVQI
•Participation in Microsoft's Sandbox: collaborative environment to develop and test new communications services.
YEAR DECISIONS REASONING RATING
2007 Acquired iPolicy Networks Pvt. Ltd.
•Provided complimentary strong security services capabilities. •It got a core competency different from its existent core competencies.
2009 Satyam Acquisition
•Diversification•Acquire a better portfolio of customers.•Opportunity to rationalize shared functions•Global presence
2009 Tie-up with WIN
•Focuses on building a new platform to provide increased functionality and faster transactions •Will formulate a go-to-market strategy in key territories particularly targeting the Asian markets.
VRIO framework Resource Valuabl
eRar
eInimitabl
eOrganisati
onIn depth Knowledge of the
telecom IndustryY Y N Y
ISO 9001 by BVQI Y Y N YAcquisition of Axes
technologies Inc.Y Y Y Y
CanvasM (joint venture with Motorola)
Y Y Y Y
Ipolicy networks private limited (Acquisition)
Y Y Y Y
Satyam Computers Y Y Y Y
Tech Mahindra’s Management
Y Y Y Y
Political • Stable Indian Government• Strict laws regarding development• Anti Outsourcing Drive
Economic• Exchange Rate Fluctuations• STP and Fringe Benefit Tax
Social• Focus on Education in India
Technology
• Changing technology
• Open source
Environment
• Fraud and scams violence
Legal
• Legally Complaint(satyam)
Bargaining Power of Buyers:1. Given the large number of buyers, it is safe to say
that the customers control the this industry2. There are so many choices for a buyer (many firms
in this industry) and there are minimal switching costs
Bargaining Power of Suppliers:1. Suppliers are not "locked" into deals with specific
firms (contracts exempt), but most of the relationships between the firms and suppliers in this industry are well established.
Threat of New Entrants:1. This industry is relatively attractive to newcomers
because of its rapid growth and appealing customer base.
2. At the same time, the industry is unattractive to newcomers because of the cost advantage large-scale incumbents possess, the significant amount of capital a new firm would need
Threat from Substitutes:1. There is not much of a threat from substitutes to this
industry, mostly because there aren't true substitutes.
Rivalry Among Exist ing Players:1. Large companies in this industry benefit from
economies of scale.2. Products in this industry are well branded and tend
to have a strong customer base.
Management is a challenge – Capabilities are far broader than TM's own background
Legal Liabilities – it has inherited from Satyam Mahindra Satyam – an I.T. project to provide WC
Football match details on mobile phones Changing need of customers and changing
technology
Sustaining profits in a highly competitive market. Keeping pace with continuously evolving
technology and business models. Introduction of new portfolios and faster time to
market. Creating reliable and optimized networks. Improving customer experience and customer
retention.
Reorganizing the Management structure. Providing more world class services to customer. Bringing more innovations in IT project field. Promotion of R&D activities in Telecom Centers of
Excellence. Setting up of Telecom Entrepreneur Development
Center (TEDC) for promoting entrepreneurship. Using merger and acquistions
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