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TATA DoCoMo
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10FN-121 10IB-069
7/21/2011
Table of Contents
1 ENVIRONMENTAL SCANNING (PESTEL ANALYSIS) ............................................................................... 4 1.1 POLITICAL ...................................................................................................................................... 4 1.1.1 ANALYSIS ................................................................................................................................ 4 1.1.2 IMPLICATIONS ........................................................................................................................ 4 1.2 ECONOMIC .................................................................................................................................... 4 1.2.1 ANALYSIS ................................................................................................................................ 4 1.2.2 IMPLICATIONS ........................................................................................................................ 5 1.3 SOCIAL ........................................................................................................................................... 5 1.3.1 ANALYSIS ................................................................................................................................ 5 1.3.2 IMPLICATIONS ........................................................................................................................ 5 1.4 TECHNOLOGY ................................................................................................................................ 6 1.4.1 ANALYSIS ................................................................................................................................ 6 1.4.2 IMPLICATIONS ........................................................................................................................ 6 1.5 ENVIRONMENTAL ......................................................................................................................... 6 1.5.1 ANALYSIS ................................................................................................................................ 6 1.5.2 IMPLICATIONS ........................................................................................................................ 6 1.6 LEGAL ............................................................................................................................................ 7 1.6.1 ANALYSIS ................................................................................................................................ 7 1.6.2 IMPLICATIONS ........................................................................................................................ 7 2 The TATA Group ................................................................................................................................... 8 2.1 Mission and Vision ........................................................................................................................ 8 2.2 Core Values ................................................................................................................................... 8 3 Strategic Intent..................................................................................................................................... 9 4 Tata Teleservices Limited (TTSL) .......................................................................................................... 9 4.1 Corporate Strategy:..................................................................................................................... 10 4.2 TTML Vision: ................................................................................................................................ 10 4.3 TTML Maharashtra Vision: .......................................................................................................... 10 4.4 TTML Mission: ............................................................................................................................. 10 4.5 TATA Teleservices positioning in the group business portfolio .................................................. 11 4.6 TATA Teleservices Business Portfolio.......................................................................................... 12 4.7 Joint ventures, subsidiaries, associates ...................................................................................... 12 5 BCG Matrix ......................................................................................................................................... 13 6 Strategic Advantage Profile................................................................................................................ 14
TATA DoCoMo 3 Strategic Analysis 6.1 Marketing & Distribution ............................................................................................................ 14 Product .......................................................................................................................................... 14 Price .............................................................................................................................................. 14 Place .............................................................................................................................................. 14 Promotion ..................................................................................................................................... 14 6.2 Research and Development ........................................................................................................ 14 6.3 Production and Operations ......................................................................................................... 14 6.4 Human Resource ......................................................................................................................... 15 6.5 Finance ........................................................................................................................................ 15 7 Future Outlook: .................................................................................................................................. 16 8 Big question for Tata Group: .............................................................................................................. 16 9 APPENDIX ........................................................................................................................................... 17
Not favourable in terms of spectrum allocation and an uncertainty still prevails if TTSLs request for obtaining additional spectrum for 39 districts in Delhi will be approved or not.
1.1.2 IMPLICATIONS
Political lobbying is prevalent and many companies have resorted to this to gain undue advantages this trend has become ubiquitous and creates a lot of hassles for firms that do not support such lobbying. But due to unearthing of the 2G scam there would be tighter audit and control. Also UPA will try to bring in some policy changes due to social pressures (Anna Hazare's fast and large public pressure) and to revamp their tarnished image. Politics in India is bound to undergo some changes some bills and policies might be introduced in the near future increasing transparency and accountability in the entire system. Firms such as TATA would be duly benefited by their inherent policy of no form of corruption. As a policy of the TATA group no form of corruption is appreciated or promoted, other competitors might indulge in such activities and get undue advantages in the short term. TATA Docomo would have to be ready for a patient game and should hold on to its high corporate values.
1.2 ECONOMIC
1.2.1 ANALYSIS
Teledensity has improved from under 4% in March 2001 to around 53% by the end of March 2010. Cellular telephony has emerged as the fastest growing segment. The mobile subscriber base has grown from under 2 Mn. at the end of FY 00' to touch 584 m at the end of March 2010. (Average annual growth of nearly 76% during this ten year period)
Due to high growth rate, increased teledensity and sustainable domestic demand, cellular telephony is sure to remain in the pink of health in India. There will be more and more subscriptions in the rural market and there would be a focus on increasing the usage in urban markets, data usage instead of voice usage would be the emphasis in the future as in the next few years the data usage(emails, mms, internet surfing) would account for 80% of the billing. There is vast potential to tap the unexplored rural markets as there are places and people in India that are still away from basic amenities and these regions are still developing, there is a large chunk of population in these regions where the usage would be low but volumes would be high. But due to immense competition and lowest call rates in the world there are wafer thin margins as well. The company will have to offer more value to customers and increase the subscriber base by aggressive marketing and technological advancements.
1.3 SOCIAL
1.3.1 ANALYSIS
Youth population is increasing, so is the adoption of new mobile technology in daily routine. While urban migration is favorable to increased activation of value added services, there is still a scope to tap rural markets through extended network infrastructure initiatives viz., mobile banking, and mobile farming tips.
1.3.2 IMPLICATIONS
The demographics of India clearly show that India would have one of the youngest populations in the world in the next 10 years. It is clear that the youth will drive the economy and the company will have to cater to the demands of the youth or runs the danger of being left behind, On this account TATA DOCOMO has played it very intelligently till now the 'Keep it simple silly' campaign and a brand ambassador like Ranbir Kapoor who is a hot favorite among the youth of India has helped in building a friendly Brand Image for TATA DOCOMO. Plans and tariffs will have to offered keeping in mind the current demands of the youth, As the rural market is a large portion of the pie the company will also have to offer plans specifically to serve this market better. TATA DOCOMO is very proactive in bringing out new plans and innovative ways to create a customer value.
1.4 TECHNOLOGY
1.4.1 ANALYSIS
Tata DoCoMo is enjoying the distinct advantage of being backed by a proven innovative technology provider NTT DoCoMo, thus bringing in breakthrough mobile applications for engaging customers and making it the most sought after mobile service among youth & corporate markets. It is the first in India to roll out 3G services, resulted in a growth of 30%-40% in VAS and also planning to bring in 3G enabled mobile phones at affordable USD 100.
1.4.2 IMPLICATIONS
The company has to be technologically equipped and has to keep pace with the changes around the world. The company should leverage its collaboration with NTT DoCoMo of Japan and try to bring new technological advancements and capture more and more customers. It should try to capitalize on the capabilities of WiMax Technology, a high speed data connection, which is supposed to have 12 million subscriptions by 2012. As 3G technology has made inroads in India there is growing emphasis on speed and coverage. Huge investments to buy the 3G spectrum have been made and thus return on them is the priority for all companies right now, but TATA has to be on its toes and outplay its competitors by bringing in more technological advancements in their existing network, so that they are able to prove to the market that they are the pioneers and technology and anyone looking for high speed, coverage without any failures and disruptions should put its trust in TATA Docomo.
1.5 ENVIRONMENTAL
1.5.1 ANALYSIS
People have growing concerns about the kind of damage the cellular waves do to the brain and other parts of the body.
1.5.2 IMPLICATIONS
There have been many articles all over the internet by independent bodies and researchers that the cellular waves are harmful to different body parts.
Neither there has been unanimity nor there has been any concrete solutions proposed, The company should research about the matter clearly, provide scientific findings as they are because people understand that everything comes with a price. And TATA Docomo should be the first to acknowledge the concerns of the people by innovating ways that can make (like some devices that make the wave less harmful are already available in the market but by less trusted companies, even this can be a big market if TATA Docomo tries to address the concerns of the people) the waves harmless and thus The company would be able to garner customer trust, loyalty and a larger market share.
1.6 LEGAL
1.6.1 ANALYSIS
Recently, due to allegations and speculations surrounding the 2G spectrum sale many service providers are in legal doldrums and have to face wrath of CBI and judiciary. This has jeopardized some joint ventures in the telecom sector like Unitechs and Telnors UNINOR.
1.6.2 IMPLICATIONS
Due to scams and public wrath against the government, other companies that followed unfair means to win the spectrum allocation are in troubled waters, whereas TATA Docomo has benefitted from its fair policies. It should pat its back for this and march on with the progress it has seen with full vigour.
The Group has the largest number of publicly listed companies, all of which have been pioneers in their perspective fields; Tata Motors, Tata Steel, Tata Consultancy, Tata Tea, Tata Chemicals, Tata Power and Indian Hotels. Going forward, the Group is focussing on new technologies and innovation to drive its businesses in India and globally, in tandem with the increasing international presence of its companies.
Excellence: We will constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide. Unity: We will work cohesively with our colleagues across the group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation. Responsibility: We will continue to be responsible, sensitive to the countries, communities and environments in which we work, always ensuring that what comes from the people goes back to the people many times over.
3 Strategic Intent
The current strategic intent of Tatas is acquisition and mergers of other businesses globally. In an interview with Mckinsey Quarterly Mr. Ratan Tata said, The Tata group's strategy to enter overseas markets is mainly driven by "We want to expand into geographies where, as a group, we can have a meaningful presence. And further he added that the group is looking at opportunity to invest in steel industries, because of Tatas belief that owners of steel are going to rule the industry. In addition; he assured that we are making sure that, we have secure access of raw material. In a nutshell, the group aims to achieve the following objectives: The group chooses the opportunity of acquisitions and mergers to expand the business. The group intends to acquire the raw material industries in first place to serve the other industries with a value added and low price of material. With the acquisitions and mergers the group also intends to capture a high market share.
The company's network has been rated as the 'Least Congested' in India for six consecutive quarters by the Telecom Regulatory Authority of India through independent surveys. Tata Teleservices Limited has also become the first Indian private telecom operator to launch 3G services in India under the brand name Tata DOCOMO, with its recent launch in all the nine telecom circles where it bagged the 3G license.
Nelco
Tata Communications
Tata Sky Information Technlogy & Communications Engineering Products & Services
Materials
Services
Energy
Consumer Products
Chemicals
Tata Indicom
CDMA based mobile operations in all the 22 telecom circles of India Leader in fixed wireless telephony market Rated the lease congested in India for six consecutive quarters by TRAIs independent surveys Provides a variety of options for wireless mobile broadband access
Walky
GSM telecom services in all the allotted 18 circles First to launch 3G services in India (in the allotted 9 telecom circles where it TATA bagged the 3G license) DoCoMo
5 BCG Matrix
6.5 Finance
7 Future Outlook:
By 2012 3G services in India are projected to reach 50 million subscribers Over the next five years, market penetration of wireless services will grow from 13.4% to 31.0% in India. Tata Teleservices invested about $500 million (Rs.2,250 crore) for the 3G rollout in all the nine circles where we have secured airwaves in an all-India bid early this year (May). Similar kind of investments expected from other major players including Airtel, Vodafone and Reliance Communication. A number of factors like availability of low priced handsets, increased competition among telecom operators leading to affordable services and enhanced network coverage will play an important role driving the growth in the country's telecom sector. The disparity between high data consumption and low revenue contribution will largely be attributed to Indias emerging 3G networks, which will be major contributors to Asia-Pacifics overall mobile traffic. The Asia-Pacific region is expected to devour 2,400 petabytes of mobile data annually by 2015, an estimated 23 per cent of global data traffic. In India, where fixed Internet access is limited, mobile is the dominant means of accessing the Internet: mobile accounted for nearly 90 percent of all Internet users in 2008. Thus huge scope for 3G services. Percentage of mobile subscribers accessing mobile Web at least monthly in Urban India just 9%. Percentage of mobile Web users who never or infrequently use the desktop Web in India 59%. Thus 3G services to be a major substitute to desktop web services. A long haul service which will take considerable amount of time to become matured. Large investments needed and return would catch up later.
declared fresh losses of over Rs. 2,000 crore. Tata Communications, the third group telecom company which took over assets of government-owned VSNL, made losses last year after a large acquisition. Will Tata remain a significant, profitable player in the telecom space or will the investment go down as one of Ratan Tata's worst ever business decisions? Or will the advent of 3G services in India bring new life to Tatas communication business?
9 APPENDIX