Idea Cellular Strategy

7/25/2019 Idea Cellular Strategy

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StRATEGIC Management

Company name ; IDEA

t.Y B.B.A (Finance)

6thSemete!

"!epa!e# By$

NiSHIT DIWAN (15)

SAURAV RANA ()SNEHAL PATEL (64)

GR%&" 'o. $

S*+mitte# To$ #!. ,ayeh Deai

S*+mitte# on$ --/0-/

History of IDEA


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We were incorporated as Birla Communications Limited on March 14, 1995 and granted a

certificate of commencement of business on August 11, 1995 !ur registered office was in

Mumbai, Maharashtra !ur name was changed to Birla A"#" Communications Limited on Ma$

%&, 199' following the e(ecution of a )oint *enture agreement dated +ecember 5, 1995 between

A"#" Corporation and rasim -ndustries Limited pursuant to which the Adit$a Birla roup

held 51. of our /0uit$ hare capital and AW roup held 49. of our /0uit$ hare capital !ur

registered office was transferred from -ndustr$ 2ouse, 1st3loor, 159 Church ate eclamation,

Mumbai 4&& &&, Maharashtra to uman "ower, 6lot 7o 18, ector 11, andhinagar %8&11

u)arat

on !ctober , 199' With effect from anuar$ 1, &&1 following our merger with "ata Cellular

Limited the )oint *enture agreement between A"#" Corporation and rasim -ndustries Limited

dated +ecember 5, 1995 was replaced b$ a shareholders agreement dated +ecember 15, &&&

entered into between rasim -ndustries Limited on behalf of the Adit$a Birla roup, "ata

-ndustries Limited on behalf of the "ata roup and A"#" Wireless er*ices -nc on behalf of the

AW roup following which our name was changed to Birla "ata A"#" Limited on 7o*ember

', &&1 Conse0uent to the introduction of the :-dea; brand, our name was changed to -dea

Cellular Limited on Ma$ 1, && "he AW roup e(ited from the Compan$ on eptember 8,

&&5 b$ selling % ac0uired 14'&. of

our /0uit$ hare capital @nder a o*ernance and /(it ights Agreement dated !ctober %,

&&' between 65 Asia, AB7L and Birla "M", so long as an initial public offering has not

occurred and 65 Asia holds no less than 1&. of our /0uit$ hares, AB7L and Birla "M" are

re0uired to procure that =a> our Compan$ and its ubsidiaries shall not ta?e or pursue an$ of the

following actions without 65 Asias prior consent =such consent to be obtained in a board andor

shareholders resolution> including in respect of =i> an$ merger with, ac0uisition of, or


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amalgamation or consolidation with another compan$ or business =ii> assuming or permitting to

e(ist an$ borrowings or indebtedness in the nature of borrowings if the amount of all such

borrowings of our Compan$ and its ubsidiaries would e(ceed s ',8&& million =iii> entering

into a new line of business =i*> increasing our authoriDed or issued share capital or =*> entering

into a )oint *enture and =b> our Compan$ ma?es a*ailable to 65 Asia certain financial

information relating to our Compan$ and its ubsidiaries such as monthl$ management accounts,

0uarterl$ unconsolidated balance sheet and profit and loss account and the annual audited

consolidated balance sheets and profit and loss accounts

65 Asia also has a right to appoint one director to our Board so long as it holds at least 1&. of

our total issued and outstanding /0uit$ hares Mr Biswa)it ubramanian has been appointed to

our Board b$ 65 Asia pursuant to the e(ercise of the abo*e right -n addition, an$ -6! of our

/0uit$ hares re0uires 65 Asias written consent, and, further, in an$ such -6!, 65 Asia has the

right to offer for sale such number of /0uit$ hares representing up to 1&. of the total /0uit$

hares which are held b$ it B$ its letters dated +ecember , &&' to AB7L and Birla "M", 65

Asia has gi*en its written consent for the -ssue and has confirmed that it does not intend to offer

for sale an$ of the /0uit$ hares held b$ it in such -ssue

We, either directl$ or through our ubsidiaries, pro*ide mobile ser*ices in the Andhra 6radesh,

+elhi, u)arat, 2ar$ana, Eerala, Madhi$a 6radesh, Maharashtra and @ttar 6radesh =West>

Circles, and ha*e recentl$ launched ser*ices and as such are in the process of full$ rollingFout

our networ? in the @ttar 6radesh =/ast>, a)asthan and 2imachal 6radesh Circles pursuant to

licenses issued b$ the +ot

Company Outline


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+ate of /stablishment 199'

Mar?et Cap %88'

Corporate Address uman "ower,6lot 7o 18 ector 11, andhinagarF%8&11,

u)arat

Management +etails

Chairperson F Eumar Mangalam Birla

M+ F 2imanshu Eapania

+irectors F Ambrish ain, Arun "hiagara)an, Biswa)it Aubramanian, ian 6ra?ash upta, 2ans Wi)a$asuri$a,

2ansa Wi)a$asuri$a, 2imanshu Eapania, uan Gillalonga7a*arro, Eumar Mangalam Birla, M 6rasanna,Madhabi 6uri Buch, Mohan $ani, 6 Murari, 6an?a)Eapdeo, C Bharga*a, a)ashree Birla, a?esh ain,an)ee* Aga, hridhir ariputta 2ansa Wi)a$asuri$a,"ar)ani Ga?il

Business !peration "elecommunication F er*ice 6ro*ider

Bac?ground-dea cellular, a part of Adit$a Birla group, is oneof -ndias leading M mobile ser*ices operator

"his telecom compan$ has licenses to operate in all ser*ice areas 6resentl$ it is operating in 1% circles -deaCellular *alueFadded ser*ices li?e 6, call conference,M, 6 and also

3inancials "otal -ncome F s 19%'&48 Million = $ear endingMar &1>7et 6rofit F s Million = $ear ending Mar &1>

Compan$ ecretar$ 6an?a) Eapdeo

Ban?ersAuditors +eloittee 2as?ins # ells


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Current Performance

"he countr$Hs fourth largest telecom operator b$ re*enue has been reporting a gradual re*i*al in

its established 1% circles ince the eptember &1& 0uarter, re*enue from these regions has

increased b$ nearl$ . 7ot onl$ that, the growth is accompanied b$ higher profitabilit$

notwithstanding the pressure on tariff rates -ts operating margin has e(panded b$ '& basis

points to 9'. despite a %. fall in perminute re*enue during the period

2owe*er, the strong momentum in the relati*el$ older circles is partiall$ offset b$ its operations

in the nine new circles, including Mumbai, Bihar, and "7 among others "hough re*enue in

these circles has increased b$ a strong 4. in the past 1 months, it is not enough to co*er

operating e(penses

"he new operations are $et to brea? e*en "he fact that the operating loss from these operations

widened toI1%9< crore during the une &11 0uarter from I11, nine out of e*er$ 1& -dea

subscribers had an acti*e account as defined b$ the regulator in Ma$ &11 "his combined with a

stable trend in its perFminute re*enue and the launch of new ser*ices under % technolog$ puts

-dea in the sweet spot "his should support its stoc? in the near term, which has gained 4&. in

the past three months


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Mission

We will delight our customers while meeting their indiidual communications need any

time anywhere!" We surie #ecause of our customers!

$ision

"o be the most customer J focused mobile ser*ice brand, continuousl$ inno*ating to help liberate

our customers from the shac?les of time and space

WHA% &%'A%E(IC AC%IO)& &O)* &HO+,D %A-E %O &+PPO'% I%& .+&I)E&&/

,E$E, DI00E'E)%IA%IO) &%'A%E(*1

.uild on our strong position in the Esta#lished Circles

As at eptember %&, &&', the footprint of our /stablished Circles alone co*ered appro(imatel$

4


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Derie synergies and economies of scale from an e2panding operation

ince our incorporation in &&, we ha*e grown both organicall$ and through ac0uisitions and

ta?eo*ers -n anuar$ &&4, we operated in onl$ 5 Circles whereas now we ha*e operations in 11

of -ndias % Circles We belie*e that standardiDing and centraliDing our operations, where*er

appropriate, will help eliminate duplication and impro*e operational efficiencies We ha*e, for

e(ample, standardiDed our approach to

customer care We ha*e successfull$ centraliDed se*eral applications, including /nterprise

esource 6lanning using !racle 3inancials, interconnect billing using customiDed software, a

call management s$stem and a fraud management s$stem

.uild a meritocratic organi3ation with a strong focus on people

We are an e0ual opportunit$ emplo$er and encourage di*ersit$ "he *alues we embrace are

integrit$, commitment, passion, seamlessness and speed We place emphasis on emplo$ee

de*elopment and we ha*e, for e(ample, committed oursel*es to an a*erage of 1& da$s training

per emplo$ee this financial $ear As part of the Adit$a Birla roup, we ma?e full use of the

facilities of $anoda$a, the Adit$a Birla roups renowned management institute located outside

Mumbai, to ensure ade0uate training and team building We regularl$ e*aluate our emplo$ees

engagement le*els to help ensure that subscribers e(periences e(ceed e(pectations -t is with

this ob)ecti*e that we are optimiDing and standardiDing our processes across the organiDation

using the :' -MA; approach which is designed to minimiDe human error and enhance re*enue

and producti*it$


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0ocus on customer serice to enhance #rand appeal

We place significant emphasis upon deli*ering an efficient and friendl$ e(perience at all contact

points in the subscriber life c$cle !ur tariffs are designed to be transparent and eas$ tounderstand We ha*e de*eloped call centers to focus on our subscribers needs for ser*ice and to

crossFsell our *arious products We ha*e consistentl$ focused on inno*ati*e products that

address e(isting and latent needs of our subscribers 3or e(ample, we ha*e recentl$ promoted a

free oneF$ear life insurance co*er of s 1&,&&& to a section of customers who subscribe to our

:+ialler "one; GA "he simplicit$ of application for and the securit$ pro*ided b$ the co*er

matched the profile of the segment of customers to which it was targeted At present,

appro(imatel$ 4'. of our emplo$ees ser*e in customerFfacing roles

Corporate (oernance

"he pro*isions of the listing agreement to be entered into with the toc? /(changes with respect

to corporate go*ernance will be applicable to us immediatel$ upon the listing of our /0uit$

hares on the toc? /(changes We intend to compl$ with such pro*isions, including withrespect to the appointment of independent directors to our Board and the constitution of the

*arious statutor$ committees in accordance with the corporate go*ernance code as per Clause 49

of the listing agreement to be entered into with the toc? /(changes prior to listing -n

accordance with Clause 49 of the listing agreement =to be entered into with the toc?

/(changes>, the Compan$ has constituted an audit committee and a shareholders in*estors

grie*ance committee -n addition the Compan$ has also constituted a finance committee, a

remuneration committee and a compensation committee


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.oard of Directors

)ame 4Connections5.oard

'elationships%itle

%ype of

.oard

Mem#e

r

Age

Himanshu -apania 67 elationships Managing +irector and +irector FF 51

%ar8ani $a9il M!A! 76 elationships -ndependent +irector, Member ofAudit Committee, Member of/sos Compensation Committeeand Member of emunerationCommittee

FF elationships FF Adit$a Birla 7u*o Limited '&

Pe8aar Murari IA&

4retired5

6 elationship

s

FF Aban !ffshore Limited


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)ame 4Connections5.oard

'elationships

%ype of

.oard

Mem#er

Primary Company Age

Madha#i .uch 6B elationships FF reater 6acific Capital LL6 4'

Idea Cellular

-dea Cellular is nothing but a compan$ =wireless telephon$> that operates in around

twent$ two telecom circles ie in -ndia -n 1995 it came into e(istence -t began as a )oint

business enterprise in between Adit$a Birla roup, "atas, and A"#" b$ appending Wings

Cellular =that operated in @6, M6>, "ata Cellular and Birla A"#" communications At the

starting it had )ust some degree of footprint in the field of M -n the $ear of &&4 /scotel

ac0uisition pro*ided -dea a properl$ pan -ndia presence wrapping M6, A6, oa, u)arat, @6,

Maharashtra, Chhattisgarh, 2ar$ana, +elhi, West Bengal, Eerala, a)asthan -t had won award of

M Association for best billing as well as customer care solutions for two successi*e $ears

Pestle Analysis

"he growth of telecom sector is *er$ fast in -ndia -ndian telecom industries ha*e thirdhighest position in the globe At present there are 5 million mobile subscribers

Political Attention o*ernment is gi*ing special attention to these pri*ate

sectors "A- is the go*ernment bod$ for telecom

industr$ which controls all ser*ice pro*iders -n -ndia out

of 1&& people 1%8 people ha*e telephone, but set target is

' people per 1&& -t means there is re0uirement of more

45 million connections which cost around '& billion @K

-n toda$s condition the there is political stabilit$ is in

fa*or of the telecom industries

Economical Attention Wealth of an$ countr$ depends upon its economic
http://investing.businessweek.com/research/stocks/people/person.asp?personId=29158628&capId=24964598&previousCapId=8536912&previousTitle=IDEA%20CELLULAR%20LTDhttp://investing.businessweek.com/businessweek/research/stocks/people/relationship.asp?personId=29158628&capId=24964598&previousCapId=8536912&previousTitle=IDEA%20CELLULAR%20LTDhttp://investing.businessweek.com/businessweek/research/stocks/people/relationship.asp?personId=29158628&capId=24964598&previousCapId=8536912&previousTitle=IDEA%20CELLULAR%20LTDhttp://investing.businessweek.com/research/stocks/people/person.asp?personId=29158628&capId=24964598&previousCapId=8536912&previousTitle=IDEA%20CELLULAR%20LTDhttp://investing.businessweek.com/businessweek/research/stocks/people/relationship.asp?personId=29158628&capId=24964598&previousCapId=8536912&previousTitle=IDEA%20CELLULAR%20LTDhttp://investing.businessweek.com/businessweek/research/stocks/people/relationship.asp?personId=29158628&capId=24964598&previousCapId=8536912&previousTitle=IDEA%20CELLULAR%20LTD


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condition -ndia comes under growing econom$ -ndia was

also less affected b$ the recession than other de*eloped

countries o there are more chances of continuous

growth for -ndia "elecom -ndustr$ contributes 1. to

+6 "herefore the economic condition of -ndia is good

for the telecom sector

&ocial Attention "he telecom industr$ has brought re*olution in the

societies of -ndia in the field of communication -t is

decreasing the cost and the timeFperiod for the transfer of

messages -n &&5 there were 11& million connections

which increased to 5& million in &&< which proof

people eagerness to adopt new medium ofcommunication

%echnological Attention "echnolog$ has its own *alue in telecom companies

Adopting new technolog$ li?e % has become the mode

of sur*i*al for the companies ooner the compan$ adopts

the technolog$ greater opportunit$ it en)o$s

,egal Attention "elecom companies in -ndia are controlled b$ go*ernment

there are bodies li?e ministr$ of communication and

-nformation "echnolog$ which ma?e rules for thesecompanies -ndian telecom polic$ in 1994 encourages

foreign and pri*ate in*estment which became more

liberaliDe in the form of -ndian "elecom 6olic$ in 1999

Enironment Attention /n*ironment pla$ important role for the e(istence of the

compan$ -t includes culture, beha*ior, demographic

condition which affects the compan$ -t is important for

the compan$ to mould itself according to the

en*ironment


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Porter fie factors


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%hreat of rialry


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"oda$ there is lots of competition between telecom companies to be ahead of each other

"here are go*ernment companies li?e B7L and M"7L ome pri*ate -ndian companies li?e

"ata, eliance and some are foreign companies li?e Godafone, spice

%hreat to new entrants

-ndian telecom companies facilitates opportunities to foreign companies in different

fields li?e G67, satellite phone calls, %, international calls and *alue added ser*ices

Mar9et for idea (rowth Aenue

ural telephon$

/nterprise telecom ser*ice

GA =*alue added ser*ices>

%

WiMA

-nfrastructure sharing

Girtual pri*ate networ?

Managed ser*ices

-n -ndia big amount of pla$ers upFandFcoming in the mar?et national le*el from its state

le*el e(istence li?e

Aircel

Girgin

pice

-dea

Godafone

%hreat of su#stitute product and serice

"he ser*ices li?e M, internet, G!-6, C+MA mobile, Wire line, broadband, carriers, GA",

M6LFG67, etc are pro*ided b$ telecom industr$ While tal?ing about internet telephon$, it is

increasing as a good alternati*e With cheaper rate it offers *ideo conferencing )ust li?e ?$pe


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I&P MA'-E% &HA'E 45

1 B7L 45 M"7L 19% -3 89

4 B2A"- A-"/L '85 /L-A7C/ '1' "A"A 62!"!7 4

.argaining Power of Customer

As it is offering ser*ices at cheaper rate, bargaining power of its customers is *er$ low

But due to the launching of mobile ser*ices at cheaper rate b$ Airtel and other telecom

companies, customers ac0uired man$ options o it could be bargaining power from the

customers point of *iew

.argaining Power of &uppliers

-dea cellular consumes iron, aluminum, electric wires for tower ma?ing -t purchases

these raw materials in bul? 0uantities that e*er$ supplier wants to sell their product "hus the

bargaining power of suppliers is *er$ less

Opportunities

- -ncreasing number of cellular phones- tarting of % ser*ices- 7o?ia pro*iding -dea the *enderFatheist consultanc$ ser*ices- -dea offers -nternet connecti*it$ in & circles- -dea )oined -BM to integrate some -" wor?

-ncrease in the number of mobile phone is an opportunit$ for -dea because it can be a reason

of increase in consumers of ser*ices % technolog$ is a new technolog$ in mobile world -t iscostl$ to setup but once it is setup then it gi*es profit in the sense of speed, 0ualit$ and co*erage

6eople are also mo*ing to the % "oda$ 7o?ia is also manufacturing mobile with %

functioning 7o?ia is helping idea in their business models, effecti*el$ of s$stems, and

technologies


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%hreats

- Brand name of other companies- 3orce b$ courts to reduce tariff- 7ew 6la$ers 6romotional prices

- -ncreased networ? costs- +ecline of A6@"here are man$ other companies li?e Airtel, Godafone which has *er$ repudiated brand

image and are potential threats for idea 3orce b$ the courts to reduce tariff has resulted in

lowering of ser*ice ta( of ser*ice pro*ider 7ew pla$ers li?e Aircel started one paisa per second,

as a result it become *er$ difficult to reduce call rates, but for sur*i*al in mar?et it is necessar$

to do Adopting new technologies in the networ? is costl$ and increases the cost price

According to AB- research A6@ of telecom including -ndia is falling

E0E Matri2

-E* 0actors Weight 'ating Weight &core

Opportunities

-ncreasing number of cellular phones % 4 1

tarting of % ser*ices 1 % %

7o?ia pro*iding -dea the *enderFatheist

consultanc$ ser*ices

% '

-dea offers -nternet connecti*it$ in & circles &5 % 15

-dea )oined -BM to integrate some -" wor? &5 % 15

%hreats

Brand name of other companies 11

3orce b$ courts to reduce tariff &4 1 &4

7ew 6la$ers 6romotional prices &8 &8

-ncreased networ? costs & 1 &

+ecline of A6@ &5 1 &5

%otal 1 81

We can obser*e in /3/ matri( that trategies of handling the opportunities is a*erage and need

to impro*e


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A #rief a#out Internal Analysis

-nternal anal$sis is *er$ essential for strategic management of an organiDation "o

identif$ organiDations strength and wea?ness we need the help of internal anal$sis B$ going

through this anal$sis the organiDation will be able to ?now about the merits and demerits which

will help to fulfill the needs of organiDations target mar?ets 3rom the organiDational

sustainabilit$ and customer point of *iew the strength as well as wea?ness is identified =+a*id,

&&8> -t is because sometimes the customers recogniDe what an organiDation could not recogniDe

-t anticipates well about the capabilities of an organiDation

&ignificance

-t estimates the siDe or 0ualit$ of such things li?e mar?et condition of business,

differentiation from the competitors, problems faced b$ the customers with compan$s products

and the wa$ to deal with their problems

Profit analysis

"his anal$sis can be done through different resources as e(plained belowN

Physical-t is a public listed compan$ -t has license to operate on twent$ two fields 7ow in

around fifteen ser*ice fields its operations are present, incorporating a customer base of twent$

four million wrapping greater than si(t$ percent of population in the total -ndian telecom

=Capitaline, &&9> 7ow in Mumbai it has got its corporate office And in u)arat it has got a

registered office "he whole spheres of offices are situated in around se*enteen states -t has )oint*enture with some famous organiDations li?e 7+"G for *alue added ser*ices, Cellebrum -ndia

6*t Ltd and for roaming Bharti "elesoft -t has )oined with Lowe -ndia 6*t Ltd on behalf of

mar?eting communication and on behalf of networ? 7o?ia and /ricson are its ma)or partners

=Bureau / , economictimesindiatimescom>


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'eputationit has ac0uired a strong reputation in -ndian telecom industr$ -t is listed in B/

and 7/ =Bomba$ toc? /(change # 7ational toc? /(change> -n &&9 b$ /conomic times it

has got award as :/merging Compan$ of the $ear; ="he /conomic "imes, &&9> And also it has

got awarded for OCare ser*ices in the best billing or Ocustomer care at M association award

which was in Barcelona, pain -t got prestigious olden 6eacoc? Award on behalf of its modern

product :M$ gang; in &&8 -dea cellular limited is one of the official supports for --3A awards

=-dea Cellular>

Organi3ational Adit$a Birla roup is the compan$ which reflects its operations *ia -dea

Cellular -t has the lin? with its distributors as well as the suppliers "o priDe to the emplo$ees,

distributors and suppliers it conducts award functions e*er$ $ear /ach and e*er$ emplo$ee as

well as shareholder gets di*idends and bonuses in each $ear

0inancialThe Idea Cellular ha a!"uired a !urre#$ ra$i% %& 1'*1 a#d "ui!+ ra$i% %&

1'*1' I$ illu$ra$e $ha$ !%#,er$i# ae$ i#$% !ah i ,er. !%#,e#ie#$ &%r $he/ a#d

al% $he$ 0a. $he !urre#$ liaili$ie (Ca0i$ali#e2 3)' 1'5 illi%# i $he 7%r+i#

!a0i$al' I$ 0r%,e $ha$ i$ ha %$ a l%$ %& !ah &%r da. $% da. %0era$i%# a#d 8#a#!ial

$a+' The. ha,e hareh%lder &u#d i#!%r0%ra$i# e"ui$. hare a 7ell a e#eral

reer,e i'e' %& 3 illi%#' The 7h%le l%#-$er/ de$ i 6 illi%# ( 1ong2te!m #e+t

3 capita1)2 $here&%re i$ i a# ad,a#$ae $% %$ai# l%a#' (Idea Cellular Re,e#ue2

3)' I# 3 i# all $hir$ee# %0era$i# er,i!e 8eld2 re,e#ue &%r 91 : R' 36

/illi%# i#!reaed . 1';' (The -dea has found to be *er$ inno*ati*e =-dea

Cellular e*anue> "he$ ha*e the punch line called :An idea can change $our life; -t is their self

image -n &&8 it pro*ided radio ser*ices to the customers as :-dea radio;


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%echnological I$ i#,e$ a l%$ $%7ard e#ha#!i# $e!h#%l%.2 CR? (Cu$%/er

Rela$i%#hi0 ?a#ae/e#$)2 #e$7%r+2 a#d 7irele 0a!e' (@ur Par$#er2 3)' The.

ha,e li#+ 7i$h I>? ha,i# a !%#$ra!$ %& 1'3' I$ ue I>? a00li!a$i%# er,er &%r

$heir i#&%r/a$i%# $ra#a!$i%# li+eB 8#a#!ial $ra#a!$i%#' , !L"6 =!nline "ransaction 6rocess>, etc ="he 3inancial /(press>

$alua#le"he "elecom sector in -ndia is pro*iding better ser*ices and its growth is also *er$

fast ome of the multinational companies li?e A"#" =@A> and M"7 =outh Africa> want to

ta?e a control in -ndia, but companies li?e -dea Cellular and Airtel pre*ent them to become the

mar?et leader -dea cellular in -ndia has ac0uired better goodwill -t is a component of 1K billion

of :Adit$a Birla roup; which is the first multinational group of -ndia "he operations are

spread in 18 countries =-dea Cellular, &&9> -dea was not there as the first in telecom industr$

but the 6 was first launched b$ -dea Cellular, "he /conomic "imes awarded for this in &&9


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as an emerging compan$ of the $ear ="he /conomic "imes, &&9> "herefore the products ha*e

gi*en good *alues to the customers

)ot &u#stituta#leAll other pla$ers ha*e the similar ser*ices with different name uppose a

customer is not satisfied b$ an$ ser*ice then he can easil$ switch to other brands o other

pla$ers are getting benefits of these reasons and coming with similar and lower ser*ices 6ricing

strateg$ is still a negotiating factor for lots of companies

Hard to imitate"A- is the bod$ which controls the rules and regulation of the telecom

compan$ er*ice name, product and punch line are registered trademar? which cannot be copied

b$ other compan$ but the$ can ha*e them with different name and pac?ages -dea Cellular ha*e a

punch line OAn idea can change $our life will be onl$ used b$ the -dea cellular

Internal 0actor Analysis

&trength

'eputation of .rand Adit$a Birla roup operates in 5 countries and it is the owner of -dea

cellular -t is the first -ndian multinational compan$ and also it is part of 1&& fortune companies

which gi*es a lot of strength to -dea =-dea Cellular>

Increase in Profit margin with high rateAs compared to its competitor li?e Bharti Airtel and

Godafone, -dea had a growth of 15. in &&


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rate of K1% trillion =-nsight research corporation 7ew erse$> Also -dea cellular has a huge

mar?et, target audience, and operations in man$ parts of -ndia ="he Mone$ control, &&9>

%echnology innoation used in Idea -dea cellular is the compan$ which started the ser*ices of

6 -ndia and come up with new product li?e OM$ gang and O-dea radio -dea cellular alwa$s

inno*ate the technolog$ =httpNnewsoneindiain>

Adertising and promotion in Idea -dea cellular does man$ promotional ad*ertisements, and

also uses Boll$wood stars li?e Abhishe? Bachan "he punch line OW2A" A7 -+/A - - made

idea *er$ popular and was *er$ effecti*e =httpNwwwboll$newDcom>

&trategic agreement with other #rands -dea cellular also has strategic agreement with

companies li?e -BM and !racle "hese companies ha*e its own brand image in the field of

software and solutions li?e CM, !LA6 -t also has tie up with 7o?ia which shows that -dea is

dedicating superior ser*ices =-dea 6ortal>

Wea9ness

)o .road#and serice Li?e other companies B7L, Airtel, "ata, and eliance -dea does not

pro*ide the broadband ser*ices "oda$ these companies are pro*iding data card also which is

adding the *alue to their ser*ices and on the other hand it wea?ening the -dea cellular mar?et

,ow coerage in India 6resence across nation of -dea is low as compared to other companies

li?e Airtel and eliance o there is a huge mar?et a*ailable which -dea cellular is missing

Mar9et leader only in )orth India -n 7orth -ndia -dea Cellular has *er$ good mar?et but on

the other hand in south mar?et share is *er$ small o other companies are benefiting this

mar?et

Direct to Home &erice is not aaila#le -dea cellular does not pro*ide +"2 ser*ices to its

customers whereas eliance and Bharti Airtel pro*ide +"2 ser*ices -f we tr$ to anal$De thefuture then +"2 will be common ser*ice Customer loo?s for better and more facilit$ so unF

a*ailabilit$ of +"2 seems to be wea?ness for the compan$

,ess mar9et share in ur#an mar9et -n the rural mar?et -dea Cellular has *er$ good position

that is


23/45

I0E Analysis Matri2

-ey Internal 0actors Weight 'ating

Weighted

&core

&trengths

eputation of Brand &&' 4 &4

-ncrease in 6rofit margin with high rate &&< % &1

3inancial power &&9 4 &%'Mar?et share of -dea &&8 % &4

"echnolog$ inno*ation used in -dea &&9 4 &%'

Ad*ertising and promotion in -dea &&8 % &4

trategic agreement with other brands &&< 4 &8


24/45

+nderstanding the competition

When a product of a compan$ enters the mar?et then the compan$ tries to get position in

the mar?et with its image o understanding the strength wea?ness, opportunities and threats of

other competitors become important -t gi*es a brief idea what a compan$ is capable of with

respect to other brands where it is lac? behind -t also helps in forecasting and future planning

6roduct or ser*ice substitution is strong weapon in the hands of customers and if the companies

pricing polic$ is matching with the customer e(pectation than there is no one who can ta?e awa$

the business of that compan$

Identifying the competitors

-t is *er$ important to ?now for the compan$ that who are the competitors tud$ing the

profile of competitors gi*es their strength and wea?ness -t helps in creating the strategies for the

product and mar?et share


25/45

Competiti4e "!o51e Mat!i

Idea Airtel $odafone 'eliance telecom

C&0s Wt 'ating Wtd

&core

'ating Wtd

&core

'ating Wtd

&core

'ating WtD

&core

Mar?et hare &15 &%& 4 &'& % &45 1 &15

Brand -mage &15 % &45 4 &'& % &45 &%&

Management

e(perience

&&< % &1 4 &8 % &14 % &1

Pualit$ of ser*ices &&8 % &4 4 &% 4 &% 1 &&8

6romotions and

ad*ertisement

&&' % &18 % &18 % &18 % &18

ales Channel li?e

!utlets, +istributor

&1& 4 &4& % &%& 4 &4& &&

3inancial tatus &1& 4 &%& 4 &4& % &%& % &%&

!rganiDation Culture &&8 4 &% % &4 &1' % &4

rowth of sales &&5 % &15 4 && % &15 &1&Lo$alt$ of customers &&' &1 &1 &1 &1

lobaliDation &&5 % &15 4 && 4 && 1 &&5

-mage of compan$ &&5 % &15 4 && % &15 &1&

"otal 1 9< %'4 %& &%

CPM and I0E Analysis


26/45

After stud$ing C6M and -3/ Matri( we can conclude that compan$ is in better condition

"here is a re0uirement of some new strateg$ to increase its strength and position in mar?et share

"here is also re0uirement of pro*iding the +"2 and broadband ser*ices which is toda$s

re0uirement With the help of -3/ and C6M matri( strateg$ for future can be decided


27/45

!n the basis of different tools and techni0ues for e(ample W!" anal$sis, Competiti*e

profile matri(, -nternal 3actor e*aluation, esource based *iew, and we can suggest the suitablestrateg$ for -dea Cellular 7ow we will use / matri( and BC matri( to come to e(act

conclusion to select the right strateg$ for the firm for the coming $ears, and also considering the

fact that in upcoming $ears telecom sector will grow at high speed

-dea cellular is one of the branches of Adit$a Birla roup Adit$a Birla roup is a

multinational compan$ which operates in more than 5 countries -t is the repudiated compan$ to

be the first -ndian multinational and part of 1&& fortune companies "his is the biggest strength

which -dea cellular get benefit of being the part of highFstatus group =-dea Cellular> "he profit

margin of -dea cellular in &&'F&< has relati*e growth of 4. and in &&


28/45

% WO strategiesQ with the help of ta?ing ad*antage of e(ternal opportunit$ -dea can

impro*e the internal wea?ness

4 W% strategiesQ these strategies are defensi*e tactics which is used to reduce the

internal wea?nesses and a*oid the e(ternal threats

!n the basis of anal$sis of the W!" anal$sis of -dea cellular of the pre*ious report we will

construct the tows matri(

&O strategies ince the mobile users in rural -ndia is increasing at *er$ fast rate so according to

trength and opportunit$ strateg$ the compan$ should penetrate the rural mar?et -n other words

we can sa$ it is the strateg$ of becoming *er$ close to urban consumers ince -dea Cellular

inherit the good brand reputation of Adit$a Birla roup, the position of being first organiDationto launch the ser*ices li?e 6, the compan$ can easil$ penetrate the rural mar?et and grab the

mar?et b$ offering e(tra ser*ices at affordable range -n this t$pe of situation Brand image pla$ a

important role A good ad*ertisement can be used to gain this large pool of customers

WO &trategies"his is a tool to understand the wea?nesses and weigh against them with the

opportunities that is a*ailable in hand "hen this strateg$ is used to see how wea?nesses can be

utiliDed in ma(imiDing the e(isting opportunities

-n past the firm was concentrating onl$ the consumers of 7orthern -ndia Bu now in its new

de*elopment plan it has slowl$ co*ered the other parts of -ndia also, but *alue added ser*ices

li?e mobile broadband and +irect to home which other pla$er li?e eliance and "ata are doing,

-dea has not pro*ided an$ such ser*ices -f the compan$ will pro*ide these ser*ices then it will

gi*e a uni0ue strength to compan$ and also some di*ersification can be obser*ed

&% &trategies Compan$ biggest strength is its brand name and the growth of mar?et share in

both north and west part of -ndia "he compan$ also en)o$ed the benefits of its promotional

strategies Man$ of the new ad*ertisements ha*e gi*en success in e(ecuting the brand message

to the consumers But there is a re0uirement of carefull$ anal$De the threats which cannot be the

ignored and it should be con*erted into strength "he compan$ should be alwa$s upgraded in

latest infrastructure and technologies Compan$ reputation can also be effected b$ poor

e(ecution of promotional acti*ities pecial care is re0uired in selecting the technolog$, with


29/45

whom the firm should tie up =li?e strategic alliance with 7o?ia and other ma)or software

pro*iders li?e -BM> @ntrained wor?force can be another ma)or threat

o on the basis of abo*e information strateg$ which compan$ can use is pro*ide appropriate

training to wor?force and at appropriate time econd strateg$ which compan$ can adopt is

dealing with local distributors which will re0uire effecti*e con*incing power -dea cellular can

reduce this threat b$ pro*iding time to time suitable training to its wor?force @pgrading the

technolog$ and introducing more inno*ati*e promotional acti*ities can bring man$ changes in

compan$s business

.C( matri2

.C( Matri2 of Idea Cellular ,imited with respect to Airtel and industry growth rate

-dea

"he whole "elecom -ndustr$ is increasing at a rate of %5. as compared to the base $ear &&'F&


30/45

mobile subscribers has touched 5& crore "he first position is captured b$ Bharti Airtel for long

time with %. share but now there mar?et share is decreasing -n -ndia in the total M mar?et

-dea Cellular Limited has a share of . =as on ul$&9> and has growth rate of 18. annuall$

At 6resent it is wor?ing in 11 ser*ice areas, ha*ing a customer support of 4 million co*ering

more than '& . of the total -ndian telecom population =Capitaline, &&9> -n present -dea cellular

has its corporate office in Mumbai, and a registered office in u)arat -t has its -ts circle offices

in 1< states -t also has partnership agreements with some famous organiDations such as, 7+"G

and Cellebrum -ndia 6*t Ltd for GA =*alue added ser*ices>, and for roaming Bharti "elesoft,

for mar?eting communication it has tied up with Lowe -ndia 6*t Ltd and for networ?, 7o?ia

and /ricson are its biggest partners =Bureau / , &&9> o it comes under star

Internal/E2ternal Matri2

"his -/ matri( is the planned tool which is normall$ used to stud$ the operational condition and

the strategic position of the business -t includes both the e(ternal and internal factors which

affect the business on the basis of scores of both e(ternal and internal factor e*aluation =-3/ and

/3/> we decide the compan$s place in the Matri( "he matri( is di*ided in nine grids and the

strateg$ will be e(plained b$ the relati*e position of the compan$ in the grid "he compan$ lies

in the position of strong so it is in the strong grid of -/ matri( so the compan$ has to grow and

build which suggests that the compan$ should go for intense and aggressi*e tactical strategies

li?e mar?et penetration, product de*elopment or mar?et de*elopment "he compan$ can also go

for the alternati*e of bac?ward, forward or horiDontal integration


31/45

row

-dea

And Build

2old And Maintain

2ar*est !r +i*est

Guantitatie &trategy Planning Matri2

"his matri( is used to approach a strategic planning for e*aluating the possible strategies it uses

an anal$tical tool for the comparison of the alternati*e strategies 2ere we are considering

following three alternati*e strategies for -dea this includesN F

1 &trategic Alternatie 6 Can go for bac?ward integration such as Godafone ac0uire

2utch to increase mar?et share or forward li?e ac0uire distributers &trategic Alternatie ? Can go for mar?eting penetrationN "arget the urban segment

launch a new ser*ice with same brand name li?e "ata +ocomo has done :Billing per

pulse rate;, pro*ide more high end ser*ices li?e 6, mobile internet ser*ices and

pro*ide good customer ser*ice% &trategic Alternatie = Can go for the horiDontal integration acti*ities ie Airtel has

gone for +ish "G, eliance has gone for Big "G

EFE

Sco!e

IFE Sco!e


32/45

/*aluating the abo*e mentioned strategies with assigned weight to the strength, wea?ness,

opportunities and threats present in front of the compan$, and we ha*e figure out that the

strategic alternati*e ie "arget the urban segment launch a new ser*ice with same brand

name Li?e "ata +ocomo has done, 6ro*ide more high end ser*ices li?e 6, mobile

internet ser*ices and pro*ide good customer ser*ice "his strateg$ has the attracti*eness

score of '

Analysis of #alance sheet

After anal$Ding the balance sheet we can get idea on the financial position of idea cellular Also

we can recommend some points on the basis of their financial performance -f we see the

compan$ balance sheet there is a net current asset =s 1,4&&< Crore in &&9, s F1,11


33/45

De#t/ Euity 'atio

"his ratio indicates the long term sol*enc$ of the firm -t describes the efficienc$ of the

management in financial decision and forecasting "he debt e0uit$ ratio of the compan$ is &'irla Nu,%*h$$0*777'adi$.airla#u,%'#e$/edia0reOreleae0rereleae'a0=

ID>P9al.

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(#'d')'

A7a$ha00a2 '2 M Redd.2 ' S' Business en"ironment for strategic management

>al7a#i2 N' Strategic management and business polic*


43/45

>al7a#i2 N' Strategic management and business polic*

>ar#e.2 J' >'2 M He$erl.2 W' S' Strategic management and competiti"e ad"antage

>ar#e.2 J' >'2 M He$le.2 W' S' Strategic management and competiti"e ad"antage

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44/45

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Documents

Idea Cellular Strategy