Analysis Motive Purpose Success FactorStructure Problem

Sirinan Saeueng 4880366Sirot Sawangsawai 4880394Bhuk Kranantawat 4880487

Waraporn Chianwatanasuk 4880605Tanai Techasmit 4980625

Analysis Motive Purpose Success FactorStructure Problem

Have You Considered Orange?

Analysis Motive Purpose Success FactorStructure Problem

Company OverviewCompany Overview

Analysis Motive Purpose Success FactorStructure Problem

Industry ProfitabilityModerate

Threat of Substitute Threat of New Entrance

Bargaining PowerOf Suppliers

Intensity of Industry Rivalry

Bargaining Powerof Customers

Moderate• PCT• Fixed line

Moderate• High Investment• Growing market• Only 2 players

High• AIS : FMA• DTAC : Strong promotion

Low• Only 2 choices: DTAC & AIS• In learning stage: high switching cost

Moderate• Fragmented & small• Only 2 buyers: DTAC & AIS

Industry AnalysisIndustry Analysis

Analysis Motive Purpose Success FactorStructure Problem

Competitive AnalysisCompetitive Analysis

CP Orange DTAC AIS

Signal 3 4 5

Promotion 4 5 3

Customer Service 3 5 4

Price 4 4 3

AIS DTAC-The largest network coverage- Good reputation and brand awareness- Market base and knowledge- 48% market share- Three successful brands target different customers

- Engineered network to prevent disconnection- Excellent promotions- Well defined target customers with loyalty and awareness

- Less market share for prepaid customers- The service price is relatively high

- Less market share for postpaid customers- No competitive advantage over the signal based as the government granted the operation on AIS

Strength

Weakness

Analysis Motive Purpose Success FactorStructure Problem

SStrengthtrength

TThreathreatOOpportunitypportunityWWeaknesseakness

• Reputation of CP helps capture local market

• Market knowledge and base from CP

telecommunication service such as PCT.

• Qualified and skilled employee and training

and developing program.

• Strong financial support.

• Brand recognition

SWOT AnalysisSWOT Analysis

• Loss of first mover advantage

• Conflict of decision making process from

culture differences

• Increase the market share as Thai market is

in the growth stage.

• Move to other types of related business such

as interest and so on

• Economical instability

• Political instability

• Uncertainty of the government policy

• New comers as the market was expanding

very quickly

Analysis Motive Purpose Success FactorStructure Problem

Partner OverviewPartner Overview

MotiveOrange: Pursue growth strategy by using market penetration Asia was potential

- Thailand as fastest growing with infrastructures: no market knowledge CP: See potential market growth by diversification from PCT and fixed line to wireless

- Looking for: capital investment, service knowledge & experience in wireless and technology development

There is a strategic fit between both parties: MARKET EXPANSIONOrange: capital investment & service excellence, CP :customer base & knowledge of market

Analysis Motive Purpose Success FactorStructure Problem

CP Orange PurposeCP Orange Purpose

Vision“To create a pioneering, wire free future where people can communicate wherever, whenever, and however they wish.”

Vision“To create a pioneering, wire free future where people can communicate wherever, whenever, and however they wish.”

Mission“To become Thailand’s premier communication company: first for service, first for quality, first for innovation, and first choice for customers.”

Mission“To become Thailand’s premier communication company: first for service, first for quality, first for innovation, and first choice for customers.”

CP Orange broke the old ways of marketing strategies like cutting price to...• Delivered personalized and extra services to its customers such as- SMS in Thai language- Pre-paid and post-paid service- Service to customers from other networks- Allowed customers to choose their own telephone numbers- Work with Alcatel to bring in GPRS technology to Thailand- Work with Rockwell customer contact center for customers feedback collection and service improvement

CP Orange broke the old ways of marketing strategies like cutting price to...• Delivered personalized and extra services to its customers such as- SMS in Thai language- Pre-paid and post-paid service- Service to customers from other networks- Allowed customers to choose their own telephone numbers- Work with Alcatel to bring in GPRS technology to Thailand- Work with Rockwell customer contact center for customers feedback collection and service improvement

Analysis Motive Purpose Success FactorStructure Problem

Type & StructureType & Structure

Market-based alliance geographical-based joint venture

CP Orange Organizational Structure:• Orange SA 49%• TA 41%• CP 10%

CP Orange Organizational Management:• Orange SA Mr. Hans Snook, the founder of Orange as the chairman• TA Mr. Supachai Chearavanont, the president of TA as CEO• Daily management decision making: CEO• Special management decision making: Both CEO and Chairman

CP Orange Organizational Development:• 2000: Signing of the joint venture agreement• 2002: Launch of the joint venture and service• 2003: 1.6 million users, 8% of market share• 2004: 1.9 million users, CP bought 39% share from Orange

Analysis Motive Purpose Success FactorStructure Problem

Alliance Significance:• Diversification of business and capture of mobile phone market from CP• Large capital investment and gain of market from Orange• With the alliance, change of mobile phone market in terms of prices and services

Significance & Success Factors Significance & Success Factors

Key Success Factors:• Exchange of knowledge, information, resources and benefits• Strategic fit• Governing mechanism• Opportunity for improvement for both companies

The Result of the Alliance:• Alliance failed due to the unfitted strategy

- Orange SA changed to focus on cost saving management andinvestment reduction- CP still focused on expanding the investment in Thai market torespond to the fast growing telecommunication market

Analysis Motive Purpose Success FactorStructure Problem

Problem Identification:• Financial funding from Orange SA was declining• Telecom Asia wanted to move & to expand faster (a conflicting strategic fit)• Orange SA stopped funding and pulled out of the joint venture

Problem Cause:• In 2002, European telecommunication market was in the downturn• The growth projection was overestimated • Orange SA was in debt• Funding to foreign market decreased over time

The Conflicting Strategic Fit:• While European market was facing problems, Thai market was booming• Under competitive pressure, Telecom Asia was obliged to expand• The lack of decision making power impeded this process

Problem IdentificationProblem Identification

Pull the Plug:• Orange SA stopped all funding for expansion in Thai market• CP began to buy shares from Orange to gain more decision making power• The purchase raised CP’s shares to 83% from 44%

Analysis Motive Purpose Success FactorStructure Problem

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