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JAIPURIA INSTITUTE OF MANAGEMENT, LUCKNOW A STUDY ON BHARTI AIRTEL Date: 02/August/2010 Submitted By: Submitted To:

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Page 1: Fom Bharti Airtel (Shivam)

JAIPURIA INSTITUTE OF MANAGEMENT, LUCKNOW

A STUDYON

BHARTI AIRTEL

Date: 02/August/2010

Submitted By: Submitted To: Stuti Agarwal (JIML-10-FS-043) Dr. Manisha SethUdayan Gulati (JIML-10-FS-049)Shobhit Agarwal (JIML-10-137)Shivam Ramchandani (JIML-10-FS-041)

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TABLE OF CONTENTS

Topics:

Introduction 3

History 4

Market Position 5

Social Responsibility/Ethics 6

Vision/Mission/Goals 7

Planning Process 8

SWOT Analysis 9

Organising/Organizational Chart 10

Organising Culture/Motivational Aspects/ Types of Leadership 11

Controlling Process 12

Controlling Measures 13

Summary of the Report 14

Observation of the Report 15

References 16

Appendices 17-19

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ACKNOWLEDGEMENT

Perseverance Inspiration and motivation have always played a key

role in the success of any venture. So hereby it’s our pleasure to record

thanks and gratitude to the people involved.

Firstly, we thank to our subject teacher Dr. Manish Seth for her

encouragement, continuous support and help in completing the study at

Bharti Airtel Limited.

And Special thanks to Mr. Chakraborty for always ready to listen

and give advice.

At last, thank to my parents and friends for being so supportive &

being my inspiration on this project.

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INTRODUCTION

Airtel is one of the India’s leading providers of telecommunication services with a

nationwide presence in all the 23 licensed jurisdictions (also known as Telecom Circles). Airtel served an aggregate of 88,270,194 customers as of December 31, 2008; of who 85,650,733 subscribe to our GSM services and 2,619,461 use our Telemedia Services either for voice and/or broadband access delivered through DSL. Airtel is the largest wireless service provider in the country, based on the number of subscribers as of December 31, 2008. They also offer an integrated suite of telecom solutions to our enterprise customers, in addition to providing long distance connectivity both nationally and internationally. They have recently forayed into media by launching our DTH and IPTV Services. All these services are rendered under a unified brand “Airtel”. The company also deploys, owns and manages passive infrastructure pertaining to telecom operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of Indus Towers Limited. Bharti Infratel and Indus Towers are the two top providers of passive infrastructure services in India.

In this report we are observing the Business from a “Management Standpoint”. Successful businesses have extensive knowledge about their customers and competitors. Getting accurate and specific information about your customers and competitors is a critical first step in market investigation and development of a marketing plan. Accurate market assessment and development of an effective plan is critical to the success of both new and existing businesses. The market impacts and directs all aspects of the company's activities and ultimately will lead to success or failure of the business.

In developing a market plan, your primary functions are to understand the needs and desires of your customer select or develop a product or service that will meet customer needs, develop promotional material that will make the customer aware, and ensure product or service delivery, and this is what the report is all about. We are describing the “Management Process, Decision Making Process, Planning Process” and other techniques of Business/Company.

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Bharti Airtel

HISTORY

Bharti Airtel is India’s no.1 reliable network, serving at around 88 million voice & data

user subscribers. The need of research study is to study about Bharti Airtel,

understanding its various strategies that keep it ahead of all other competitors like

Vodaphone, Idea, and Reliance etc. This study is undergone through various steps of

research project. The method used for the research project are- Group Discussion,

internet browsing, different graphs & chart study etc. From this analysis we found that

Bharti Airtel has the largest market share due to its calling plans, Tariff plans and other

strategies.

Some of the key points are:

Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises.

Bharti Airtel, formerly known as Bharti Tele-Ventures Limited (BTVL).

India's largest and world's third largest cellular service provider.

More than 88 million subscribers as of 31 December 2008.

Airtel provides mobile & fixed wireless services using GSM technology across 23

telecom circles.

Largest Telecom Company listed on Indian Stock Exchanges.

The company also has a submarine cable landing station at Chennai, which connects

the submarine cable connecting Chennai and Singapore.

On 19 October 2004, Airtel announced the launch of a Blackberry Wireless Solution

in India. The launch is a result of a tie-up between Bharti Tele-Ventures Limited and

Research in Motion (RIM).

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Market Position of the Company

Share value of the company: 322.55*           

Volume 1,893,379

Previous Year Close 320.35

Day's H/L (Rs) 324.30 - 317.55

52wk H/L (Rs) 467.00 - 229.50

Market Cap (Rs Cr) 122,488.36

Revenue  US$ 7.254 billion (2009)

Operating income  US$ 2.043 billion (2009)

Net income  US$ 1.662 billion (2009)

Total assets  US$ 11.853 billion (2009)

(Fig. 5 shows the financial statements)

Services by provided Bharti Airtel:

Airtel Communications ServicesPrepaid Connections

Postpaid Connections

Blackberry

Smart phones

Wireless Internet

International Calling Cards

Digital TV Services

The Digital TV business provides Direct-to-Home (DTH) TV services across India under the brand name Airtel Digital TV. It started services on 9 October 2008.

Telemedia Services

The Telemedia business provides services in 89 Indian cities and consists of two brands.

Airtel Broadband provides broadband and IPTV services. Airtel provides both capped as

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well as unlimited download plans. The maximum speed available for home users is

16Mbps.

Social Responsibilities

"As a first step towards fulfilling the vision of the Government and the leadership of the country, Bharti has kick-started it’s voluntary and affirmative action in making significant contribution to provide education to the weaker sections of the society, so as to make them employable. We need to ensure that our children and young people have access to quality education. Through Bharti Foundation we are determined to make a substantial impact in this area."

"As a responsible corporate citizen, we have decided to substantially scale up our existing programs in the area of education, in order to support the aspirations of under-privileged in the country."

At Bharti Enterprises, there is absolute belief in quality education being the most important tool for social and economic development in India. All educational programs initiated by Bharti Foundation involve close partnerships with the government, policy makers, local communities and the general public.

Bharti Foundation implements education programs in primary and higher education to help both holistic and academic development of underprivileged children and youth across the rural pockets of India. The primary school program is designed to teach students to explore, question, reason and communicate effectively.

Ethics

The partners will conduct all its dealings in a very ethical manner and with the highest business standards.All partners with a business relationship with Bharti Airtel shall comply with the highest level of integrity and ethical practices.The partners will provide all possible assistance to Bharti Airtel in order to investigate any possible instances of unethical behavior or business conduct violations by its employee. Partner will disclose forthwith any breach of these provisions that comes to their knowledge to allow for timely action in their prevention and detection.Partners will adopt appropriate processes to prevent offering any illegal gratification in the form of bribes or kickbacks either in cash or in kind in the course of all dealings with us. Any instances of such violations will be viewed in a serious manner and Bharti Airtel reserves the right to take all appropriate actions or remedies as may be required under the circumstances.

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All partners are required to confirm their compliance to ethical dealings on an annual basis by signing a certificate to this effect as per Bharti Airtel's standard annual certificate.

Vision

By 2010 Airtel will be the most admirable brand in India.

Loved by more customersTargeted by top talentBenchmarked by more businesses.First private telecommunications company to launch long distance services

By 2020:

To build India's finest business conglomerate by 2020Supporting education of underprivileged children through Bharti Foundation Strategic Intent:

o To create a conglomerate of the future by bringing about “Big Transformations through Brave Actions.”

Mission

“We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more”

Innovative products and servicesCost EfficiencyUnified Messaging SolutionsWe will meet the mobile communication needs of our customers through Error-free service deliveryHas a target of 125 million subscribers by 2010

Objectives/Goals

To undertake transformational projects that have a positive impact on the society and contribute to the nation building process. To Diversify into new businesses in agriculture, financial services and retail business with world-class partnersTo lay the foundation for building a “conglomerate” of future.

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Economic Scenario

GDP growth rate - Averaged around 7.9 % from 2002-2008Rising Tele-density – Target of 45% by 2010Growing per capita income/disposable IncomeRs 12000 in 2002 to Rs 33000 in 2008)Falling Handset PricesModerate inflation levels which were prevalent during the past 7 years – around 5-6%

PlanningPlanning for items/services is done at different time horizons.

Long Term Planning

Annual Planning

Quarterly / Monthly Planning

Daily Planning

Long Term Planning

The time horizon is three years and it is strategic in nature. Strategic / privileged partners would be a part of the planning process and the long term plans would be communicated to all partners. These plans would help partners to align their vision and business model with Bharti Airtel and covers areas of business model, market drivers, supply chain alignment, technology and emerging trends.

For e.g . Airtel planned for the products like “Lifetime Sims”.

Annual Planning

The time horizon is one year and it is tactical in nature. Strategic / privileged partners would be a part of the planning process and the Annual plans would be communicated to all partners. These plans would help partners to provide for resources in their business plan to support the requirements of Bharti Airtel.

Quarterly/Monthly Planning

Quarterly / Monthly plans are operational in nature. The plans would cover tentative requirement of a quarter and confirmed requirements for a shorter period of time. These plans would include inventory levels, demand forecast and replenishment requirements. These plans would help partners to plan their operations.

Daily Planning

Daily Plans are at the execution level and would capture changes in the earlier planning cycles. Partners need to adhere to the daily plans and make adjustment to their long term / short term plans as per the changes communicated from time to time.

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(Fig. 3 represents the Planning Process)

Decision Making ProcessDecision making for each level is done at entirely at their level. This encourages effective problem solving. Puri says: - As decision making goes down the chain, the problem get appropriately addressed closest to where they arise. Sometimes in large organisation if the problem is at level 10, it gets solved at level 1 by time which changes colour and texture and the solution is bound to be less effective. We operationalised the decision making process. I often tell my teams, “Come to me with a problem and a solution, not just the problem.”

Changes the Company is facing in light of present economic scenario

SWOT ANALYSIS

Strength Market Leader Recognized GloballyStrong Brand ImageStrong New Business Development teamStrong FinancialsLargest Telecom Player 22.6%

WeaknessOutsourcing of core systemNetwork Coverage

OpportunitiesLow Broadband Penetration, Rural Telephony Bharti Infratel – Cutting Down cost in rural areaCurrent Tele-Density – 30.6 is still low among developing countries

ThreatsFalling ARPUIntense Competition & Shortage of Bandwidth New Players coming in IndiaUncertain Economic Condition

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(Fig. 1 & 2 shows the detailed information regarding the SWOT Analysis)

Organizing

“Organizing is the structural framework within which the various efforts are coordinated and related to each other."

Organization is one of the basic functions of management. Organizing is referred to as creating a structure of relationship for the efficient management of the enterprise. In other words organization means a group of persons working together to achieve some common objectives. It is related with building up of a framework or structures of various inter related parts. We can say that, organizing is a process consisting of a series of steps by which managers create a network of authority responsibility relationship. It helps the people to work together (relate to one another) for a common aim /objective.

Airtel is an ideal organization because of following points:

It has:.Harmonious grouping of Functions.Clear division of Duties and Responsibilities.Reasonable span of control.Provision for growth and expansion.Specialisation of employee’s.Full use of man-power.Provision of two-way and effective communication

Steps/Procedures in the process of organizing:. Identifying the work. Division of work. Assignment of duties. Grouping of activities. Delegation of authority. Co-ordination. Defining relationships

Organizational Chart of Bharti Airtel

This organizational chart gives a brief description of the levels of management in the organization. The chairman and the managing director here is the head of the organization i.e. they constitute the top level management. the next level is the president and CEO after the chairman who is again further sub-divided into various stages i.e. the president for various department such as mobile services, Telemedia, etc. below the president are the directors of various other department present in the organization like customer services, supply chain, technology, etc.

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(Chart shown in appendices Fig.4)

Organizational Culture

Bharti Airtel is a diverse multicultural organization with 48 nationalities represented across its various businesses in 21 countries. Bharti has traversed a long way from its humble beginnings as a bicycle component manufacturer to a multinational group present in several businesses. Their values encompass:

Entrepreneurship: A core tenet for a first-generation entrepreneurial company. The company believes in providing people opportunities to do all that they can and be what they want to be.Respect for all: Being respectful towards all whom we meet during our day-to-day professional interactions.Passion for performance: Our journey would not have been possible without an enduring, bordering on fanatical focus on performance. This is what we also seek in our employees – a keen focus on outcomes through performance excellence.Teamwork: We value “the power of many” and look to harness collective synergies through collaboration and teamwork.Building collaborative partnerships: Forging strategic partnerships with eminent brands and companies from across the world - be it Singtel, Wal-Mart, AXA, Del Monte - is part of our DNA. Much of the work gets done by picking up the phone or popping into a team member’s cabin.

Motivational Aspects

The Motivational Techniques followed by Bharti Airtel are of three kinds:

Arousal of behaviorDirection of behavior

Persistence of behavior

Arousal of behavior relates to a specific thing that activates behavior.

Direction of behavior relates to what is responsible for directing the behavior.

Persistence of behavior relates to how the behavior is sustained.

Type of Leadership

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Airtel follows the “Situational and Participative Leadership Styles” which shows that leaders must adjust their leadership style according to the situation as well as to the people being led. The Company makes effort to make the employees participate in the management process and also prepares them for the future events and odd situations.

(Fig.6 shows different types of leadership)

Controlling Process

Strategic Sourcing: Establishing a proper telecom sourcing strategy is the key to maintaining a successful TEM program. Identifying the right sourcing partners will ensure service providers provide an acceptable level of service with the commitment to ensure a long term relationship that will bring mutual benefits. Ideally, a sourcing strategy should be made up of a combination of established enterprise-wide telecom specific policies and procedures together with experienced procurement specialists who understand the telecommunications landscape. During the sourcing process, tariff rate benchmarking and detailed contract negotiations with service providers should be conducted to ensure the relationship is mutually beneficial with long term implications. The result of proper sourcing is the trickledown effect of savings that flow straight through the whole TEM lifecycle.

Procurement : A proper procurement strategy should focus on service order management automation and processes that provide centralization and standardization to handle all service requests, service orders, and order tracking of products and services from within the enterprise. All service requests and orders should be tightly associated with the organization’s inventory management system. Processes and workflow capabilities should also be customized to provide optimal process models that meet each enterprise's unique business environment. Employing an effective procurement strategy will bring about potential cost saving benefits, ranging from the elimination of ordering duplicate service inventory to time-based cost savings from streamlined ordering and tracking workflows throughout the procurement process.

Bill Processing : Bill processing should be automated to handle the receipt, loading, audit, cost allocation, approval, payment, and tracking all telecom invoices within the enterprise. With automation, the processing of telecom invoices is simplified by providing a more streamlined workflow with a consolidated view of all service provider expenditures in a standardized format across the enterprise. As a result, enterprises can see productivity gains from audited and approved bills being paid on time, the elimination of late payment fees, streamlined headcount to load, process, and pay bills, and more granular tracking and cost allocations of all telecom spend activity within the enterprise.

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Inventory Management: Inventory management is perhaps the most dynamic process within the whole TEM lifecycle. The management of inventory and its associated MACDs (Moves, Adds, Changes and Disconnects) is in constant flux. Thus, establishing a centralized and extensible process oriented inventory management system to capture and manage this change is critical to ensuring optimal inventory best practices within the enterprise.

Deploying an effective inventory management system will result in benefits such as the identification of duplicate, unknown, or "zero use" inventory, more streamlined processes to manage all MACD activity, and the increased ability to track and monitor inventory to ensure optimal use with maximum accountability.

Reporting & Analysis : Reporting and analysis should be customizable and flexible to provide output views that are relevant to all levels of the organization. Output formats should include online dashboard views, multi-format document export capabilities, and integration with external systems such as data warehousing and enterprise resource planning (ERP) systems. Multi-level security functions should also be implemented to ensure the right party with the assigned rights can receive and view their associated information.

Control Measures

Expansion of the organization: A growth of a company tends to have very profitable reinvestment opportunities for its own retained earnings. Thus, expansion of an organization is very important. For e.g. Airtel Connects with Africa – to become the first Indian brand to go truly global.

Test Process Improvement: The products the Company manufactures are used in an area of the industry where errors leading to a stop in production can be quite expensive. Bharti Airtel lays emphasis on the improvement of the reports and harmonizes the documents and standardizes the documents. For e.g. Bharti Airtel announces Strategic Organization Changes for Future Growth.

Reduction of Environmental Effects: Environmental issues have become increasingly more important the last decade. It is of great importance to reduce emissions of green house gases (GHG) and the transport sector contributes to a large part of GHG emissions. Longer transport time contribute to higher capital cost of goods during transit. For e.g. Airtel is making efforts to reduce the cost of transportation by 3%. The company has taken measures to control the high prices of raw material due to long routes of transport.

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Summary of the Report

This report on Bharti Airtel is done to find out certain objectives

regarding the strategic approach adopted by Bharti Airtel to stand strongly in

the competitive telecom market. Airtel’s marketing strategies are analyzed

by using various models like SWOT Analysis, Organizational Chart,

Porter’s Five Forces, Porter’s Generic Strategy & etc.

The outcomes of these models are properly analyzed to find

companies position in the market & various ways how company is surviving

in this competitive market.

This report on Airtel not just give us description about the company

but it also talks about the various marketing strategy adopted by the

company. SWOT analysis of Airtel helps to find out the weak points of the

company and to find out the way to overcome these problems.

This Report also focuses on vision, mission, goals and various levels

of organization present in Bharti Airtel. It also explains the various

controlling processes used in the company.

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Observation of the Business from a Management Standpoint

During the project I find out the whole information regarding the company BHARTI

AIRTEL. We have paid special consideration towards that how to make a company more

and more successful in a market and also realized that there is only one way by servings

the consumer in such a way as to make them more and more satisfied and more and more

delight by our various schemes, offers and services and all the other sectors which

influence on customer for using such a good product of a good company.

There, I would also like to suggest few points over which top management should think

and take corrective action to overcome those drawback due to which Mobile Service

providing companies & authorized dealer has gradually losing its market position so that

the company must take following measure to regain its market position.

1. Company should encourage to solve the customer complaint customer satisfaction

should be the ultimate aim of the organization so customer complaints should be

removed

2. Promotion by local advertisement & on electronic media more as to print media

as it is the biggest media to reach common customer.

3. Companies should also start promotional schemes for the customers.

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References

Bharti Airtel, Annual Report -2008

Investors presentation, Bharti Airtel Limited, November 2008

Telecommunication Services, Indian Industry: A Monthly Review, CMIE – November 2008

Analyst Report – Bharti Airtel, Asit C. Mehta Investment Intermediates Ltd.

Telecommunication Sector Report – March 2008, CRISIL

Capitaline Database http://capitaline.com

Indian Telecommunication Sector - August 2007, IBEF Report

“Next Big Spenders – Indian Middle Class”, Business week

Websites:

WWW. BHARTIAIRTEL.IN

WWW. AIRTEL.IN

WWW. GOOGLE.COM

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Appendices

Poter’s 5 forcesFig. 1

Poter’s Generic StrategyFig. 2

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Organizational ChartFig. 4

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BCG Matrix for Bharti Airtel

Fig 3

LOWHIGH

HIG

HLO

W

Mobile Services

DTH & IPTV

Broad Band

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Financials SnapshotFig. 5

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Leadership StylesFig. 6

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