Download - Dizz PPT Presentation- Team Synergy
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Dizz Synergy Consulting
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Agenda
Organizational Diagnosis Critical Success Factors
Market Development Strategy Issues And Recommendations
Conclusion
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Organizational DiagnosisMacro-analysis
Political
Economic
Social
Technological
Mobile network operator industry
Regulation Recession
Foreign exchange
Growing importance of technology
Rate of technological change
Diffusion rate of technologyChanging customer needs
Emerging technology: 3G
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Industry Competitiveness
Threat of new entrants
Buyer power
Supplier power
Threat of substitutes
Intensity of rivalry
among firms
Low
High
High
HighHigh
Low threat of new entrantsHigh initial capital requirements, economies of scale, and tight regulatory requirements
High threat of substitutesMany substitutable products from other industries, relative costliness of mobile services as compared to other services
High buyer powerLow switching cost, homogeneity of products within industry, elastic demand for the industry’s service
Low supplier powerHighly competitive handset manufacturing industry
High intensity of competition within industryLow product differentiation, same costs and sources of inputs, regulatory pressures for competition
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Organizational DiagnosisSWOT Analysis
DIZZ
STRENGTH
OPPORTUNITY
WEAKNESS
THREAT
MARKET DEVELOPMENT
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CRITICAL SUCCESS FACTORS
- IT system- Business process
- Alliance with suppliers- Partnership with institutions- Alliances with search engines
Timely innovation to address changing wants and needs
Consistent superior performance to create
customer loyalty
Resource management especially financial
resources to support projects and investments
Critical Success Factors
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Average Proportion of Customers
44% 41%
15%
Market Development Strategy
Europe
Asia
Africa
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Market Development Strategy
2008 2009 2010 2011 2012 2013 2014
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
EuropeAfricaAsia
Trend in Revenues
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Market Development Strategy
• Asia has the most market potential among the regions
• 85% of India is yet to be tapped as mobile phone customers
TARGET THIS EMERGING
MARKET
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2010 20 € 2,151 € 484 2.85%
2011 24 2,664 599 3.53%
2012 28.8 3,229 742 4.37%
2013 34.56 4,086 919 5.41%
2014 41.472 5,060 1,138 6.70%
Year Customers Revenue Profit ROI
Market Development Strategy Investment in India
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Issues and Recommendations
Regulator threat in Yee4
Proposal to change the organizational structure2
Resignation of CEO in Africa3
Errors in update of contracts details in Europe1
Top Priority Issues
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Issue 1
Engage the original developer to repair the system
Adopt tighter policies to improve the process of selecting outside contractors
Situation
• Customers in Europe complain of being charged excess rates• Defective CAS application written by an outside contractor• Potential 70.22% decrease in profits
Errors in the Upgrade of CAS
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2009 2010 2011 2012 2013 20140
20
40
60
80
100
120
140
160
180
YEAR
Assuming Normal Operations Assuming Errors Persist
CUSTOMERS
Forecasted Number of Customers (in millions)
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Forecasted Operating Profit (in millions)
2009 2010 2011 2012 2013 2014 -
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
YEAR
PROFIT
Assuming Normal Operations Assuming Errors Persist
Average Percentage Decrease in Profits
70.22%
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Issue 2Proposal to Change
Organizational Structure
Advantages Disadvantages
Reject proposal because of need
of Dizz for responsiveness
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Issue 3 Resignation of CEO in Africa
Assign a new CEO in Africa from its senior management team.
Situation
• CEO in Africa resigns; European CEO assumes position• Strategic direction dispute• Weakness in organizational leadership in Africa
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Invest in the upgrade of transmitters not later than September 2009
Situation
• Threat of being fined• Non-compliance with regulator’s requirements• Potential fine; possible loss of license and revenues from Yee
Issue 4 Regular Threat in Yee
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Total Differential Cost (in millions)
Upgrade Transmitters in Yee
Shutdown Operations in Yee
Total Differential Cost
8,578
2318,809
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Shop in shop proposal
Marketing efforts targeting children in Asia
Acquisition of Casung handsets
Network Security
Performance Related Pay Scheme
Other Issues
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Shop in shop proposal
Advantages
• Potential for increased revenues over life of lease• Increased visibility in shop locations
Disadvantages
• Net cash outflow over life of lease
Reject proposal because of expected loss on the project
Situation
• Offer by major department store chain to open 100 shops across Europe
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Forecasted operating profit over the term of the contract
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
02,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
Net Cash Outflow Over the Lease term
28,284
Gross Profit per year Total Costs per year
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Advantages
• Potential to increase customer base and revenues• Help achieve CSR goal of working to protect children
Disadvantage
• A potential business ethics concern
Adopt the marketing program to other regions
Marketing Efforts Targeting Children in Asia
Situation
• Marketing drive in Asia targeting children• Roll out of marketing program to other regions
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Marketing Drive in Asia
CORPORATE SOCIAL
RESPONSIBLITY
ADDITIONAL REVENUES
MARKETING EFFORTS ON
CHILDRENSECURITY
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Opportunity to Acquire Casung for 10 M Euros
Advantages
• Low acquisition price• Potential for efficiency from backward integration
Disadvantages
• No competitive advantage expected to arise from acquisition• Increased operating complexity from diversification
Reject proposal to acquire Casung
Proposal to Acquire Manufacturer
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Acquisition of CasungExisting good relations with existing suppliers
Unsuitability of second-tier handsets for a multinational network company
Risk of Casung’s poor product quality
Little experience of the region in which Casung operates
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Participate in industry-wide associations in coping with security concerns
Funding in-house development of security applications or procedures
Situation
• Increased incidence of call time theft though revenue loss is insignificant• Pressure to increase network security to avert risks, but no need for further investment according to Global Operations Director
Network Security
Advantages• Reduce revenue loss from call time theft• Increase protection of customers and integrity of data transmitted over network• Reduce risks of network breakdown that will disrupt service to customer
Caveat
• Benefit of program should exceed its cost
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Network Security
CUSTOMER DATABASE SECURITY
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Reject the proposal to pay all employees according to performance evaluation.
Intensify existing employee enhancement programs
Retain the pay for performance program for senior managers whose individual performance can be more directly aligned to the performance of the company.
Performance Related Pay Scheme
Situation
• Proposal to adopt performance related pay for all Dizz employees
Advantages
• Potential for increase in productivity and service quality levels
Disadvantages• Increase in wage levels of about 5%• Initial costs in and difficulty of developing scheme• Uncertainty of potential benefits
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Performance Related PayEmployee Motivation
Monetary Factors
Basic Salary
Bonuses
Incentives
Non-monetary Factors
Open Communication
Staff Meeting Leadership
External Training Workshops
Self-Evaluation Tools
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Strengths
• High coverage reach and quality of signal• Superior customer service in Europe• Great alliances with global manufacturers • Highly accurate and reliable IT system• Economies of scale• Strong brand equity• Effective HR programs that motivate
employees through trainings and development
• Full compatibility with 3G, the latest technological platform, in Europe
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• No CEO for the African division• One-time failure of the IT system due to
externally written billing application
Weaknesses
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• Penetration of new markets and growth in current emerging markets
• Adoption of prospective new technologies across its networks
• Adoption of the latest existing technologies in Asia and Africa
• Broadening of industry because of expansion of product package to include data services
• Backward integration by acquiring Casung, a handset manufacturer
• Opportunity to open shops across Europe• Landline telephony
Opportunities
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• Risk of growth projections not being achieved, because of recession
• Intense competition, especially in Europe• Increasing competition in emerging markets• Tightening regulation and strict license
requirements• Threats from substitute products• Concerns of compromise of network security
Threats