Telecommunications

Management

Dr. Nurhizam Safie Bin Mohd Satar

Dean, School of ICT, AsiaeUniversity

Kuala Lumpur, Malaysia

nurhizam@gmail.com

nurhizam.safie@aeu.edu.my

Lecture 01 and 02: Foundations of Strategic Competitiveness

Foundation of Strategic Competitiveness

A strategic competitiveness consists of moves to:- Attract customers Withstand competitive pressures Strengthen the company’s market position

The objective of a competitive strategy is to generate a competitive advantage, increase the loyalty of customers and beat competitors.

A competitive strategy is narrower in scope than a business strategy

Strategic Planning

A set of managerial decisions and actions that determine the long term performance of an organisation/company.

The main role of strategy is to plan for the future as well as to react to changes in the marketplace.

Strategic Planning process

Four steps involved in the strategic planning

process:-Environmental scanningStrategy formulationStrategy implementationEvaluation and control

Environmental Scanning

The purpose is to monitor, evaluate and disseminate information from both internal and the external business environment to the key decision makers of the organisation.

How? By conducting SWOT analysis

What is SWOT analysis?

Analysing the internal strengths and weaknesses of the organisations as well as the external opportunities and threats to the organisations.

External Factors

External environment can include a number of different forces which impact the financial performance and operations, including:- Political/legal factors; Economic environment;Socio-cultural factors; and Technological factors

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Examples of External Factors

Political/legal factors Telecommunications Act of 1996

Economic environment global economic recession

Socio-cultural factors illegal downloading of songs

Technological factors implementation of cheap technology (VOIP) : Skype

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Internal environment

Core competency Organisational decision makingOrganisational culture Management-labor relationshipOperational IssuesManagement-subsidiary relationships

Examples of internal environment

Core competency – a successful company possesses a specialised product process, brand recognition or ownership of talent which enables it to achieve higher revenues and market dominance.

Examples : Internet router Cisco, best customer services –> Dell and innovation Google and Apple

Internal environment

Organisational decision making Critical in developing new product and services Meeting product delivery deadline Providing managerial and technical support Coordinating supply chain management

Internal environment

Organisational culture

Is the collection of beliefs, expectations and values shared by an organisation’s members and transmitted from one generation of employee to another.

Internal environment

Management-labor relationshipUnion – labour worker association working

closely with the organisation to achieve the business mission.

Union will negotiate on lay-off, termination of workers, pay rise and comfortable working environment etc.

Internal environment

Operational IssuesValue Chain – the strength and efficiencies in

the production and distribution of product and services.

Example: purchase a Dell PC from the Internet and received the PC at home.

Internal environment

Management-subsidiary relationships Ability to properly coordinate and oversee projects

and goals throughout a company’s multiple worldwide subsidiaries.

Example: when Sony Corporation purchased Columbia Picture Entertainment. In the early years, lost of profit, later recovered through undergo a steep learning curve in managing a foreign subsidiary

How are strategies formulated?

Strategy formulation: - 1) Planning and growth strategies 2) Competitive business strategy

Growth Strategies

Horizontal integration Is a growth strategy which allows a business to

spread its influence by expanding into different geographic market while maintaining a commitment to its primary business

Example : McDonalds

Growth Strategies

Diversification GE Is a growth strategy which recognise the value

of owning a variety of related and unrelated business

A company that owns a diverse portfolio of business is spreading the risk of its investments.

One subsidiary lost, the other will cover the lost.

Vertical Integration Is a growth strategy which emphasizes the

importance of owning most or all of a company’s operational phases.

The goal is to create internal synergy and efficiencies between a company’s various operating divisions.

Examples: cross-licensing between subsidiaries Walt Disney and Time Warner

Strategic Formulation starts with

Defining Business mission – where the company wants to be in the next five years.

Goals and objectives – are the end result of planned set of activities. They state what is to be accomplished and when. The achievement should be measurable quantitatively.

Competitive Business Strategy

Introduction of new product or service Initiating new marketing and promotion

strategy Implementing the acquisition of companyReorganise the company structureDecision to enter foreign market

Importance of competitive scope

Cost leadership –ability to produce a product/services at lower cost.

Differentiation – ability to provide unique or superior value to the customer in term of product quality, special features

Examples : HBO and ESPNFocus – targeting particular demographic or

consumer group. Example MTV

Strategy implementation

Three core processes:- 1. Properly communicating the goals and objectives of the proposed strategy 2. Assembling the project team in order to carry out the strategy 3. Working through the operational details necessary in order to get the job done.

Setting Strategy into Motion

Top management must put a realistic goals and objectives

Explaining the Goals and Objectives of the Strategic Plan in a properly manner.

Top- down approachMBO

Who Carries out strategic plan?

Senior executive leader is responsible for choosing the right people in order to successfully implement the strategy.

The right people capable of carrying out the strategy.

Attentive to details in assessing the strengths and limitations of a successful team.

Working through the Operational Details

Project TeamBudgeting – managerial document associated

with costsSetting Target DatesOperational Support -resourcesPolicies and Procedures – broad guidelines

Evaluation and Control

Measuring Performance- against the stated objectives

Assessing Actual Performance- analysis when and if performance fails to achieve the stated objectives

Taking Corrective Actions if needed – may reveal the goals was unrealistic and take necessary corrective actions.

Case Study

The Walt Disney Company: A case Study in Vertical Integration and Complementary Assets