Marketing Management(Porter Model, SWOT and PEST Analysis of Grameenphone Limited)

Course Title: Marketing ManagementCourse code: MKT 411

Assignment Topic“Porter model, SWOT and PEST Analysis of

Grameenphone Limited”

Submitted toFarhana Noor

Lecturer,

Department of Business Administration

Faculty of Business & Economics.

Submitted by Name IDMd. Tanvir Hasnat Shuvo 071-11-1697Alauddin Ahmed Jahan 072-11-1822Md. Obaidul Arif Khan 071-11-1761Md. Zobair Ali 072-11-1814Md. Rashdur Rahman 072-11-1823

Program: BBA Section: A

Submission Date: March 9, 2011

1 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

An Overview of Mobile industry and Grameenphone

Telecommunication industry in Bangladesh is in emerging stage,

experiencing robust growth. The monopoly in the field was demolished and

perfect competitive market emerged. Since then the entire cell phone

companies are trying to attract their subscribers through various lucrative

offers. As with advance technological advancement, the mobile

telecommunication industry proved to be competitive. Now Bangladesh has

stepped into the world of first communication and communication has been

made easy through the introduction of cellular (mobile) telephones.

Notwithstanding the initial cost of the mobile phones, the media has

outstandingly increased its popularity as we can see that presently there are

more than 19 million mobile phone users as against 1 million fixes-line (Land

Phone) subscribers.

The existing Cellular phone companies in Bangladesh are CityCell (Pacific

Bangladesh Telecom Limited), Grameenphone Ltd., AkTel Ltd., Banglalink

and TeleTalk & AirtelTelecom ltd. Among these company Grameenphone,

AkTel Banglalink, Airtel and TeleTalk adopted GSM technology and Citycell

the market pioneer started with CDMA technology.


Customer Satisfaction Factors of GP

GrameenPhone is a highly growing mobile company. In mobile telecommunication industry, there are direct and indirect factors that influence customer satisfaction. I tried to focus on the most important factors that influence customer satisfaction at GrameenPhone.

AirtimeAirtime is the core offering of GrameenPhone. So, quality of communication, network availability etc. are the most important customer satisfaction factors. Quality of airtime depends on the ratio of subscribers and transmission base stations. If the numbers of subscribers are increased without developing the network, quality of airtime goes down.

After Sales ServicesAfter sales service is one of the very important factors in the mobile telecommunication industry. GP has extensive after sales customer care tools. I would like to focus on these tools one by one:

HotlineThe centralized Call Management Center in Dhaka is manned by trained professionals and is opening round-the-clock, responding to subscribers’ queries from all over the country where GrameenPhone has its coverage. GrameenPhone Ltd has recently introduced a single dedicated hotline number 121 for all of its subscribers to provide instant service. At present there are more than 450 dedicated and energetic employees are working to provide instant over phone service to the subscribers. Call Management Center is well equipped with state of the art software’s and other important tools through which most of the problems of the subscribers can be solved instantly. Call Management Center remains open 365 days a year and 24 hours a day.

Interactive Voice Response (IVR) This is a newly introduced service by GrameenPhone. This is a automated hotline service. GP subscribers need to dial 121 to reach this service. After that s/he can get information regarding bill, usage, credit policy, bank name that receives GP’s bill, and so on by choosing different options. Subscriber needs to pay TK 2 per minute for using the IVR.

GrameenPhone Centre (GPC) GrameenPhone Center (GPC) is the most recent innovation of GrameenPhone with the aim to provide all kinds of mobile phone related services to its subscribers. For the first time in Bangladesh subscribers will get both SIM and handset related services from the GrameenPhone Centers. So far


GrameenPhone introduced 39 well decorated GPC in the country. All these GPC are not only providing after sales services but also working as the main sales channel of the company. Within each GPC there is a separate section allocated for selling and repairing handsets at an affordable cost. GrameenPhone Centers are open from 08:00 AM to 08:00 PM everyday (365 day).

GrameenPhone Service Desk (GPSD) Previously people at the rural areas had to come in the major cities to get customer service, which is a real hassle and time consuming process for them. To solve this problem GrameenPhone introduced Service Desk with a vision to provide service at the rural and remote areas. At present GrameenPhone have total 607 Service Desk around the country through which it provide service at grass root level. All these GPSD remain open from 09:00 AM to 05:00 PM in five days a week.

Customer CommunicationThe centralized Customer Communication located in Dhaka, handles written requests of subscribers, both verbally and in writing 7 (seven) days a week from 8 AM to 8 PM. Customer Communication deals with all sorts of written complain received through fax, letter by post and e-mail. It also builds relationship with the valued subscribers on a regular basis. The major responsibility of the unit is to maintain relationship with the high users and ensure that the present subscribers are not going to switch to other operator.

Travelers To Customer “Travelers to Customer” is another recent addition of service in Customer Service Department which is also the first time of its kind in the country. The major responsibility of this unit is to provide service at the customer’s doorstep with the slogan of “Let’s not expect the customers to travel to get the service rather let service travel to the customers”. Currently it’s providing service in the major cities of the country and to the high volume users of GrameenPhone.

Corporate Customer CenterThe Corporate Customer Center aims to provide quality customer service to the country’s preferential business customers. A professionally trained team is dedicated to provide After Sales Services and Solutions customized to the need of the business customers and initiate pro-active visits as a part of routine contact to look into the needs with an aim to build long-term professional relationships. Their professional customer care team is available to help seven days a week, 365 days of the year - whether for general queries, or to assist with any problems subscribers may possibly face. Their


dedicated relationship managers are assigned to provide personalized service right from the beginning of the relationship.


Five forces Model of Porter-1. Entry of competitors2. Threat of substitute3. Bargaining power buyers4. Bargaining power of supplies5. Rivalry among the existing player6. Government

Entry of competitors Economic of Scale: it is very easy for GP to increase economic scale.

With 23 million subscribers, more than 40 percent market share, and billions of dollars invested in Bangladesh, GrameenPhone is meeting the scale and scope of the challenge—and unleashing widespread social benefits in the process.

Capital: GrameenPhone has a huge amount of capital mainly invested by the shareholders. Capital size is $280 million. Moreover, global institutions like IMF, World Bank etc. have sanctioned loan for GP. This is a huge success for GP. GrameenPhone total capitalization was US$120,000,000, including around US$50 million from IFC/CDC, and the Asian Development Bank (ADB).

Access Technology: GrameenPhone Ltd., Bangladesh’s largest mobile phone operator recently opted for Oracle technologies to streamline its business operations. The telecom major will be deploying Oracle technology to standardize its IT infrastructure and reduce cost of ownership, thereby enhancing customer service in Bangladesh.

Customer switching costs: GP may design price-structure and product-offerings in such a way that switching cost to any substitute product becomes higher and buyers will stick to them.

Customer loyal: Grameen Phone is losing its loyal customer to other operators due to cheaper and attractive promotional packages from other operators, though 98% of the population is covered by the network of GP. For their loyal customers GP can launch promotional packages, like loyal customer package, GP partner.

Threat of Substitutes: Quality: Grameenphone give the high standard quality through their

customers. They modified their packages for consumers’ wants and demand. They provide various facilities, which don’t given by any other competitors.

Buyers’ willingness to substitute: The loyal GP customers don’t move any other operator, because they have the highest number of customers’ and a strong network protocol.


The relative price and performance of Substitutes:

Operator SIM Price PerformanceGrameenphone 149 High

Banglalink 300 Moderate Robi 100 Low

Citycell 400 Very LowAirtel 150 Moderate

Teletalk 150 Low

Cost of switching Substitute: When customers’ want to switch GP from another network, then they must bought a new connection for use.

Bargaining Power of Suppliers:

Concentration of suppliers: Grameenphone have sufficient wholesaler around the country, so they have a strong supply chain management. Customers can easily buy the product different Sim selling shop and customer care centers.

Branding: GP is the highest mobile usage brand of Bangladesh. It has a strong supply and chin management.

Profitability of suppliers: Suppliers can’t force to price rising. GP fixed the price and suppliers can only supply the products.

Role of quality and service: GP always provide their services as maintain highest quality standard as their role.

Bargaining power of buyers: Concentration of buyers: Grameenphone have sufficient wholesaler

around the country, so they have a strong supply chain management. Customers can easily buy the product different Sim selling shop and customer care centers.

Differencation: Products are high standard. Business people can use Blackberry and Business Solution package.

Profitability of buyers: Buyers can easily get the packages which they want.

Role of quality and service: Buyers always seek the quality full products. From the buyer’s need, GP can easily fulfill the quality service.

Switching costs: It is easy to switch the suppliers. Because it depends on buyers behavior.


Intensity of rivalry: The structure of competition: Absolutely GP is a market leading

company of our country. GP provides highest value rather than other operators. GP has the highest number of customers’ and they have a strong network and market system rather than other competitors.

The structure of industry costs: GP takes some stapes or strategies, when the competitors give any advertisement. When needed, they can easily cut the price.

Switching cost: Buyers need not to switch. If anyone wants to switch then, buyers have to carry a high value.

Exit barriers: Now a day, Teletalk, Citycell and Robi can any time out of market. Because their market system too much poor rather than GP. They can’t compete with GP.

SWOT AnalysisSTRENGTHS:Being the largest player in the market, GP has a considerable amount of hold in the market. The strengths of GrameenPhone are as follows:

Established Brand: The branding activities have led GrameenPhone to build a strong brand. The mother brand is placed on the same platform another renowned brands like British American Tobacco, Citicorp etc in Bangladesh.

Low start up cost: A low start up cost required to reach out to the public.

Individualism: Although GrameenPhone has close affiliation with its multinational parent company, GrameenPhone has an independent brand identity in the market.

Experience in telecom market: Most of the Point of Sale (POS) i.e. the GP outlets has experience on selling telecom product. GP has the largest distribution channel in Bangladesh, which enables to offer their product in every corner of Bangladesh.

Well located Point of Sales (POS): All the POS’s are situated in good location, which ensures easy access for all the consumers of the product.

Economies of scale: GP has now reached a stage where it enjoys economies of scale to the fullest extent. If any new punk, i.e. any new entrant tries to dig its way in by low tariff, then GP can easily counter that problem by following suit but without any losses as they are low cost producers already. Attractive profiling of POS which attracts the customers.


Wide Acceptability: The branding activities and the service of GrameenPhone have earned 69% of the market share.

Market Awareness: GP has wide distribution network and good knowledge of this and therefore serves the market demand accordingly.

Widest Coverage: GP has covered all over the country. Extensive Market presence (availability): To make telecommunication accessible to the mass market, GP has set up its POS in the most convenient areas of the districts under the GP network.

Customers Trust: Wide connectivity, easy communication and affordable price have earned customer confidence and made people depended on GP on a day to day basis.

WEAKNESS:Every company has its weak points and GP is no exception to that rule. The weaknesses of GP are:

No Copyright: The GP brands are not protected by copyrights, which has led to the misuse of the branding attributes and bears the risk of such misusage in future as well.

Market follower: GP is not market leader as they follow others. GP is good at following suit rather than innovation. The proof of this can be seen now, as its rivals reduce tariffs and increase the increased validity of the prepaid service, GP immediately followed suit. In fact it came up with a whole new package called DJUICE, consisting of reduced call rates. This attitude of GP is a very big weakness as new subscribers are immediately attracted to the price cut of GP’s rivals and by the time GP follows suit, it would have lost the potential subscribers to its rivals.

Lack of innovation: GP still now does not have the latest mobile Internet technology, which by the way is quite old and did not start MMS, i.e. multimedia messaging. This is a major setback for GP as new funky stuff always attracts young and enthusiastic subscribers and thereby increasing the revenue for GP.

Lack of working capital for Outlet and Individual agents: This is a major setback for GP as most of the retailers cannot provide optimum service and thereby hurting GP’s image to some extent.

Lack of well-trained personnel: Because of this, the sales personnel lack the convincing power to convince people to use GP’s connection.

Sub brands are not well established.


Billing System: The abrupt barring of connection due to a complicated billing system confuses the customers. Such hassles lead to an unfavorable impression for the company.

Network Limitation: Call drop, congestion, and poor connectivity with BTTB result in bad image of the company.

OPPORTUNITIES:o Opportunities for GP are endless. They have the money and experience

to diversify.o The main opportunities for GrameenPhone would be:o Brand Value of GP: GP products are well known for its services and

quality. Because of this goodwill many potential subscribers might be attracted to GP.

o To have continuous presence of GP all over Bangladesh.o Helpful attitude from GP personnel. People want pampering. o Marketing support provided by GP. The sales and distribution channel

is supported by GP, which gives the channel a wider opportunity.o New licenses complementing GSM telephony.o Strategic alliances with airtime vendors (service providers) would bring

opportunities for further development.o More international roaming partners.o Good pre paid service would bring more revenue.o Ownership of distribution partners.o Stock return facility. Many retailers are attracted to sell GP products as

GP has a policy to take back unsold stock.o Stock receiving facility on credit. Retailers also appreciate this facility

to getting stock on credit and pay later.o Hand set and Kit lifting from the same point. GP sells all cellular related

products at the same place. So it is convenient for the consumer to get everything under one roof.

o Better utilization of IT resources which would give GP the opportunity for faster growth

o Sophisticated and flexible billing system.o Introducing rental phones.o Increased sale of village phone through Grameen Banks infrastructure.o Automation of routines and procedures.o Availability of concern contact point of GP. No matter what the time is,

there is always someone at GP to answer all the subscribers’ queries.


THREATS: No matter how big or small, companies will always have threats that

question their very existence. However some threats remains within the company itself rather than from its rivals or the anticipated newcomers. These threats could arise from the strategies adopted by the company, in this case GP, which prohibit GP to function smoothly.

The threats for GrameenPhone would be: Public demand for discount on price. Everyday consumers are

demanding lower tariffs and better quality. This might pose a threat to GP.

GP is anticipating a possible threat from the new entrant BTTB. The state owned fixed-line monopoly BTTB has entered the market with extremely low tariffs. It is thought that the competitive environment that prevails today might be destabilized as BTTB starts operating at full potential. Currently BTTB poses very little threat to GP as they have just started their operation.

Fluctuations in the foreign exchange market as another area of concern while possible changes in fiscal policies like the tax regime may also have a negative growth of the mobile phone sector. The import duty on Handsets has been re-fixed at BDT 3000 for a handset costing over BDT 10000 and BDT 4000 for a handset costing over BDT 10000. This would replace the existing BDT 2500 flat rate of import duty on handsets.

According to recent study, even the existing cost of doing cellular telecom business in Bangladesh is relatively much higher than that of the neighboring countries because of the higher cost of leasing infrastructure, regulatory hindrances, high import duty on handsets, and high cost of interconnection. For example, the infrastructure leasing cost from BTTB perE-1 PCM in Bangladesh is about 10 times higher compared to that in other countries of the south Asian Region.

Split sale. Day by day consumers are spread out to many other competitors in the market.

Higher commission provided by the competitor cellular phone providers. This discourages the various sales agent selling GP products

Lack of interconnection with fixed network Inadequate information flow regarding future planning of GP. If the

consumer knows the future packages or the coverage expansion of GP in the future, then many subscribers can make decision in buying GP before they even think about other cellular companies.


Change in regulations having negative effect on its business Tremendous sales pressure from GP. The sales and distribution system

of GP is under severe pressure all the time to increase the sales figure. We all know that pressure doesn’t always achieve the desired level of sales, but it might disrupt it.

Political favoritism to other operators.


PEST Analysis:

Politicalo Tax Policies: As a SEC listed company GP’s corporate tax rate is

35%. Another competitor’s tax rate is 45%. So they get extra benefit from the market.

o Consumer Protection: Consumers’ are protecting in this network. Any one can’t easily collect about the individual’s information,

o Safety Regulation: VIP’s numbers are always disclosed and maintain a serial.

o Political Stability: in our country all of the business has strong political stability so GP is always in political stability.

Economico Economic Growth: GP contribute their share in SEC. there

economic growth is rather than the other competitor. o Unemployment policy: It is a large company and it has about

30000 employees around the country.o Stage of business cycle: Now GP has stay in 3rd position in

maturity life cycle.o Consumer confidence: Customer confidences of GP users are too

much high in every user sector. Business solutions for Business persons, Djuice for young generation and other regular packages for normal users.

o Taxation: As a SEC listed company GP’s corporate tax rate is 35%. Another competitor’s tax rate is 45%. So they get extra benefit from the market.

Socialo Income distribution: they are contributing their income throw

dividend to their share holders. Existing they are connect with several social responsibilities.

o Lifestyle changes: Mobile user can change their lifecycle stricture. Anyone can get everything through using mobile and internet.

o Education: GP contribute their existing income for the rural education. They have a theme that, “Alo asba e”

Technologicalo Govt. research spending: They are contributing with the Govt.

research spending every time.o Industry focus on technological effort: Their technological

effort is higher than other competitors.o Internet: EDGE system is first open by GP. They are the market

leader of mobile connection modem also.13 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

o Mobile Technology: They always offering value added mobile technology service.


CORPORATE SOCIAL RESPONSIBILITIES

GrameenPhone started its journey 10 years back with a believer of “Good development is good business”. Since its inception, GrameenPhone has been driven to be inspiring and leading by example, when it comes to being involved in the community. GrameenPhone believe that, sustainable development can only be achieved through long term economic growth. Therefore, as a leading corporate house in Bangladesh GP intend to deliver the best to their customers, business partners, stakeholders, employees and society at large by being a partner in development.

GrameenPhone defines Corporate Social Responsibility as a complimentary combination of ethical and responsible corporate behavior as well as a commitment towards generating greater good in society as a whole by addressing the development needs of the country.

To interact effectively and responsibly with the society and to contribute to the socio-economic development of Bangladesh, GrameenPhone has adopted a holistic approach to Corporate Social Responsibility, i.e. Strategic & Tactical. Through this approach GP aims to, on the one hand involve itself with the larger section of the society and to address diverse segments of the stakeholder demography, and on the other remain focused in its social investment to generate greater impact for the society.

GrameenPhone focuses its Corporate Social Responsibility involvement in three main areas - Health, Education and Empowerment. They aim to combine all their CSR initiatives under these three core areas to enhance the economic and social growth of Bangladesh.

ConclusionAs the research finding show the poor service awareness status of Grameenphone subscribers, hence obviously GP has to increase awareness of subscribers. Increased service awareness status will raise the service value of GP, increase subscribers usages rate result increase revenue for GP. If continuous development of new product and service can’t simultaneously aware subscribers then it will neither worth much to subscribers nor add value to the company. Hence, it is clearly observed that there is a GAP between services provided and services awareness. Now GP has to consider this GAP minimization and maintain alignment with service offering and service awareness. Otherwise, in the long run new services innovation will not give its ultimate success.


Documents

Marketing Management(Porter Model, SWOT and PEST Analysis of Grameenphone Limited)