CELCOM AXIATA

1.0 INTRODUCTION

Celcom Axiata Sdn Bhd, a Technology Resources Industries (TRI) Bhd company has
been the leading mobile cellular operator in Malaysia for the past 10 years. Celcom's main
business activity is to develop and market Mobile Services

1988 witnessed the dynamic birth of Celcom, a leading mobile telecommunications

provider in Malaysia. Since its inception, Celcom has steadily made its presence felt in the
Malaysian market. It has, always continued to spread its wings and is undeterred by the
dynamic nature of the mobile communication industry.

Celcom business Vision and Mission is: -

To delight our customers.
To build a profitable enterprise that maximizes investors return.
To empower, develop and reward our people, to become Malaysias preferred
employer.
To build win-win relationship with all our business partners, based on mutual
trust, respect and support
To work to bridge the digital divide, to build our nation and to enhance its
standing abroad.
To maintain the highest levels of transparency, integrity and professionalism.

Together with all our stakeholders, we will make Celcom Malaysia a premium brand: a
brand that symbolizes the spirit of freedom, aspiration, confidence, dynamism,
timelessness, universality and globalism. (Celcom Official Website, 2009).

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 Setting up a team of quality directors and staffs, has transited Celcom from first-
generations to second-generation market leaders. For Celcom, communication is a serious
business. This is why they have mainly products and service geared toward maintaining
business voices. This products and services includes business prepaid plan, business
supplementary plan, business post-paid plan and business satellite. A major challenge
facing Celcom is how to increase profit and maintain their competitive advantage in the
Malaysian market. (Celcom Official Website, 2009).

2.0 OBJECTIVE

The objective of this case study is to analyse and discuss the strategy direction of Celcom
in the local and international market and the segments within these markets.

To identify the strength and weakness of the competitors and to discuss the short, mid and
long term plans that these competitors can undertake to further increase their market
share.

3.0 MARKETING STRATEGY

Celcom has been in the telecommunication business with the primary objective to keep
people connected and helping companies to market their goods and services as well as
keeping them close to their customers. Besides formulating a market-orientated and
customer-focused mission statement, Celcom has established and objective to achieve
cumulative growth in the next five years with a 50 per cent net profit for the newly
launched U-verse.

To accomplish these objectives, Celcom has developed a benchmark for progress in three
different categories. Firstly, through using a market penetration pricing, the service will
be brought to the customers at affordable and reasonable prices. Secondly, by gaining a
better understanding of the need and satisfaction of the current customers, they will
improve the service to encourage re-orders. Finally, the service is to be able to utilize its
current technology and knowledge base, and research as well would be conduct on similar
products with an eye towards developing the services to a speciality advertising product.

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3.1 TARGET MARKET

3.1.1 TARGET MARKET 1

large travel agencies or holiday planners
For example, travel agencies like Wah Tung Sdn Bhd, can use the
service to provide 24/7 travel plannings to their numerous
customers, thereby increasing the companies ticket sales and profit.

3.1.2 TARGET MARKET 2

Niche market of business travellers
For example, business men and women who normally use online
system for their reservation will find it easy to make reservations and
flight booking by just a simple press on the button, and that would be
more convenient to travellers.

3.1.3 TARGET MARKET 3

Direct consumer market of hand phone user.
For example, this service can be utilized in our day to day life, like
paying bills and checking account balance, making it easier for our
families by just pressing a button instead of having to go to the
company or bank to pay our bills.

3.2 POSITIONING
Celcom has since its establishment, positioned itself as the number one Malaysian
network in the Malaysia market. This they have done by providing efficient
network connectivity and linking of individuals together. Today Celcom stands in
the heart of every Malaysia as the telecommunication service provider that offers a
more for more customer satisfaction, by providing the customers with products
to keep them satisfied above their competitors and charging them more money for
the quality they yield in the products. It has made our work so easy, that by
launching this service as the first in south East Asia, it will go a long way towards
convincing the present customers that Celcom is truly the number one Malaysian
network, persuading the non-customers both in Malaysia, and the neighbouring
countries where Celcom is currently expanding to join the leading network.

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 Physiologically, Celcom has influenced the status of their customers, because they
are considered to be financial capable by using Celcom services.

3.3 STRATEGIES

By understanding the customers needs, Celcom has used its strength to fill the
needs of the customers more than any other telecommunications service provider
in Malaysia presently. This has given them a competitive advantage, boosted
enthusiastic sale and increased more customer loyalties.
Through careful and in-dept. research in the characteristics if the Malaysian
market, Celcom has created distinctive target markets for its products through
creating a strategic marketing mix that just not makes the product available, but
also affordable, convenient and unique at a consistent and flexible level. This is
geared towards improving new and existing products as well as profit to the
company.

3.4 MARKETINGMIX

3.4.1 PRODUCT
Celcom has developed an intangible attribute to the new products, to
consistently meet or exceed customers expectation, enhance speedy
response to customers demand and attribute anticipate new customer
needs. This will be achieved through investing in research for consumer
buying behaviour and product development.

3.4.2 PRICE
With high availability of internets across the Malaysian globes, a price
penetration strategy is advisable to enhance customers usage, and
introducing the service. On the other hand, they would use that opportunity
to increase price on improved products. Celcom should also be sensitive to
the price elasticity of its product and overall consumer demand.

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 3.4.3 DISTRIBUTION
Through gaining retailers cooperation and distribution channels across
Malaysia, it would be easy for the service to reach the target market. The
SIM PACK is light weight and would be easy to transport huge number of
the product with the service in it across Malaysian market.

3.4.4 PROMOTION
Through educating consumers on product improvement and creating
awareness to non-consumers, advertisement and sales promotion would be
used to introduce the new service to the Malaysian market. (Celcom
Official Website, 2009)

3.5 MARKET RESEARCH

Extensive market research is to be implemented to regulate customers

satisfaction, anticipate and understand customers new need, and improve the
products to either make the customers delighted or satisfied. This marketing
research comprises of two types, firstly the internal marketing research which
would be done by team employed and directed by Celcom, and secondly research
paid institutions. The result from both researches will be compared and analysed
by the customer relationship team, to find a new year of maintaining quality
customer-company relationship and brand loyalty. (Celcom Official Website,
2009)

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4.0 MARKET SUMMARY

4.1 COMPETITIVE FORCE

Celcoms competition especially in advertising industry is very strong both on
local, regional and national level, making Celcom the market leader in Malaysia.
Following the sales strategy developed by their local rivals, Celcom Malaysia has
improved their competitive level, through developing many telecommunications
feature, providing quality services at considerable price. The competition in the
telecommunication industry is very high with the latest introduction of a new
telecommunications service provider (U-mobile). Celcom has reduced the cost of
SMS from 50 cents to 25 cents and reduced the cost of call from 35 cents to 20
cents per minute. Many other competitive measures are expected to enter the
market soon as well.

4.2 BARRIERS TO ENTRY

Basically in Malaysia, telecommunication service is not an oligopolistic business.
There is full freedom of entry once the company have meet up with the
requirements and is ready to fulfil the government obligations. There are many
telecommunications service providers in Malaysia, ranging from local service
providers to international service providers. This makes the industry a purely
competitive market. Nevertheless, Celcom has understood the need to make
customers satisfied and providing not just what they need today, but what they
will need in the future. Through advancing technology, they have made it difficult
for small companies to enter the market, thereby, creating barrier to entry for other
small companies.

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4.3 BUYING POWER (CUSTOMER)
In todays society, consumers have less time for work and leisure. The hallmark
characteristics for todays product are convenience and ease-of-use. In fact, if the
product does not save time and is not easy to use, customers will simply ignore it.
Such is the same for Malaysian market. The customers ideology of quality
service less price is still the ruling key to purchase. Understanding this is basics
in every industry. Have been provided with many choices, the consumers in
Malaysia normally go for the best service that offers the least price.

4.4 PURCHASING POWER (SUPPLIER)

Technology plays the most important role in this sector of the Malaysian market.
Manufacturers understand the consequences of delayed supply, or insufficient
supply when the demand and market price is high. This is why they make use of
the best technology available to provide quality service to their customers. Many
suppliers in Malaysia are more capital oriented than service oriented. This means
that they can only provide you with the best for the highest cost that is a more-
for-more marketing strategy. This makes the purchasing power to be vested more
on the hand of the market leaders, and this is another competitive advantage
Celcom has over its competitors in the Malaysian market.

4.4 POLITICAL FORCES

There are no expected political influences or events that could affect the operation
of Celcom in Malaysia. This is because; Celcom is a registered company and
functions under company provisions Act of the Malaysian law. But as a company
in Malaysia, they have to function under the directions of the Act.

4.5 TECHNOLOGICAL FORCES

Celcom currently offers the best broadband network in Malaysia. Technology is
the fastest growing market trend nowadays. To maintain their position as market
leader, Celcom has enhanced their products technologically to keep the Malaysian
telecommunications updated with ever technological advancement.

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 4.6 CURRENT MARKETING OBJECTIVES AND PERFORMANCE
Celcom sends personal sales representatives to market their products on potential
customers and create service concepts for their business or choice of order.
Specifications are then sent to suppliers. This enhances more customer loyalty and
relationship with the company. Although some of the customers do go on credit,
20% of the annual sales are obtained from this form of marketing sales and this is
designed to reach their objectives of being the market leader and providing quality
services for the customer and profit to the company in return. This is a potential
advantage they have over their competitors as well. Celcoms current marketing
strategy to maintain customer-company relationship with potential customer.

5.0 FINANCIAL STRATEGY

5.1 CONTROL AND PERFORMANCES STANDARDS

The following performance standards and financials are suggested.
The total budget for launching the new product, research, and customers
survey will be equal to 80 percent of the annual promotional budget for the
product introduction year.
Each team is responsible for reporting all financial expenditures, including
personnel salaries and direct expenses, for their segment of the project. A
standardized reporting form will be developed and provided by the
marketing director.
The marketing director is responsible for adherence to the project budget and
will report overages to the company president on a weekly basis. The
marketing director also is responsible for any redirection of budget dollars,
as required for each project of the business analysis team.
The new product offering would be evaluated on quarterly bases to
determine its profitability. Product development expenses will be distributed
over a two-year period, and will be compared with gross income generated
during the same time period.

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6.0 CONTROLS STRATEGY

6.1 IMPLEMENTATION SCHEDULE

Activities, responsibilities and time for completion: all implementation are
designed to create customer awareness and boost sales

6.2 MARKET ORGANIZATION

Because the new product requires extensive commercialisation to match customers
need, it is necessary to organize the marketing function by customer groups. This
will give Celcom the opportunity to focus its effort on the need and specifications
of each target market. Celcom marketing efforts will be organized around the
following marketing groups:

a) Manufacturing group,
b) Business-to-business group,
c) Customer satisfaction group, and
d) Customer relationship group.

Each group will be headed by a Sales Manger who will report to the marketing
director. Each group will have full decision making authority and responsible for
marketing the new product to the target customers within the segment. These
changes in marketing organization, enables Celcom to be more creative and
flexible in meeting customers need, reduce highly centralized management
hierarchy and finally, give better opportunities to monitor the activities of
competitors.

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7.0 SWOT ANALYSIS

7.1 STRENGTH
Celcom maintains a product differentiation strategy resulting from a strong
market orientation, commitment to high quality, and customization of
products and services.
There is little turnover among well-compensated employees who are liked by
customers. The relatively big size of the staff fosters communication and
quick response to clients needs.
A long-term relationship with the primary suppliers results in shared
knowledge of the products requirements, adherence to quality standards, and
a common vision throughout the development and production process.
The high percentage of sales, suggest a satisfied customer base as well as
positive word of mouth, which generates new business per year.
Being the oldest telecommunications service provider in Malaysia, has given
Celcom a competitive edge and increased customers trust and loyalty to the
brand.

7.2 WEAKNESS
Celcoms current facilities are crowded; there is little room for new employers
or equipments to fit into the company.
Celcom is reactive rather than assertive in its marketing efforts because of its
heavy reliance on customers reaction for product satisfaction.
While the staff size improves growth and communication, it also impedes
commitment on the side of the staff and lack of specialization.
Both the product line and the client base lack diversification. Dependence on
current recorder rates could bleed complacency, invite competition, or create
false sense of customer satisfaction. Development of a product that would
provide better quality service by the competitors would probably put Celcom
out of business.
The non-seasonality of the products and services creates bottleneck in
productivity and cash flows, places excessive stress on the personnel and
strains on the facility.

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 The poor niche market could be a competitive advantage for their competitors
to gain an advantage over them, and this could lead to a dramatic decrease in
customers loyalty.
High cost of products and service could alter the buying power of the
consumers, especially in this time of global recession.

7.3 OPPORTUNITIES
Advertisement in Malaysia alone exceeds 200 million Malaysian Ringgit
annually. More than 20 million Ringgit is spent on specialty advertisement
which is the potential for Celcoms growth.
Celcom is currently the Malaysian partner of Vodafone.
Celcom is currently doing nationwide promotion using power icons like
including international footballers Steven Garrard, Michael Owen, Ryan Gigs
and Robert Pires and Chinese entertainers JJ Lin and Wang Lee Hom as well
as local actress Maya Karim.
Celcom currently has the widest 3G and HSDPA coverage in Malaysia since
its launch on 17thmay, 2005.
Celcom provides many products and services that suites different customer
needs, ranging from economic, business, and family and leisure satisfaction.
The director and manager of the company, Dato Sri Jamaludin Ibrahim is
currently working with the company for the seventh year, this is different
when compared with other telecommunication service providing companies
and with his full experience, he has helped guide Celcom to a resting edge
with quality management.
As more and more Malaysians look for ways to keep in touch with each other,
Celcoms popularity and quality services has helped draw more customers to
the company through customer relationship and brand loyalty.

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7.4 THREATS
Reengineering, right-sizing and outsourcing trends in management may alter
traditional channel relationship with brokers, dealers, and distributors or even
lead to elimination of the channel.
Specialty advertisement through promotional items relies on gadgetry and
ideas that are new and different. As a result, product life cycle may be quite
short.
Completion from other telecommunications service providers is strong.
High cost of products and service would be a competitive advantage to their
rivals over customers, through implementing low cost quality products and
services.
There are no barriers of entry and this could be a great threat because it could
make new fast productive companies to come into the market and try to gain a
stand of their own.
Fast technological advancements would result in faster product life cycle,
increase the need for improvement and might result in low sale of less quality
products, or products with less technological features.

7.5 MATCHING STRENGTH TO OPPORTUNITIES & CONVERTING

WEAKNESS AND THREATS
The acceptance of technological advances and the desire to control time
creates a potential need for technologically rich products with varieties of
features.
Celcom must modify its management hierarchy, empowering its employees
through a more decentralized marketing organization.
Celcom should consider diversifying its product line to satisfy new market
niche, as well as developing products that are seasonal to boost sale.
Celcom should consider surveying its current customers and its customers
client to better understand their needs and changing dreams.
Have gone into partnership with Vodafone, Celcom should consider
establishments in its neighbouring countries, especially the lower
technologically advanced ones like Vietnam, Laos, Myanmar etc.

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8.0 COMPETITION ANALYSIS

8.1 DIGI

8.1.1 OBJECTIVES AND STRATEGY OF DIGI

The main objectives of Digi are to become the main market leader in Malaysian
market. This they have done by implementing many marketing strategies to
persuade customers. This strategy includes the Digi family and friends, 18 cent per
any local call, reward on reload according to the amount reloaded within a month
and mass advertisement.

8.1.2 STRENGTHS OF DIGI

The main strength of Digi is the market size they occupy through their extensive
marketing strategy and promotions. This has made them one of the market leaders
and their service are largely demanded across the Malaysian market.

8.1.3 WEAKNESS OF DIGI

Their main weakness is limited coverage across Malaysia and the world. For
example, sometimes when you send message to African continent with Digi, the
message will not be delivered to the recipient.

8.1.4 SIZE AND TREND OF DIGI IN THE MARKET SHARES

Digi currently holds the second largest trend in the Malaysian market shares.

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8.2 MAXIS

8.2.1 OBJECTIVES AND STRATEGY OF MAXIS

Maxis are one of the new entries into the telecommunication service
providers market, and their main objective is to get as much customers as
they could. This they have down through mass advertisement, sponsoring
sports programmes, rewards to their customers and organizing shows for
students and the public at large.

8.2.2 STRENGTH OF MAXIS

Their sponsorships for sporting programming is drawing many customers
attention since Malaysia is a country vast in sporting activities.

8.2.3 WEAKNESS OF MAXIS

Their services are inconsistent, due to poor and limited coverage as well as
products feature.

8.3 TUNE TALK

8.3.1 Strength
Lowest SMS rates to all networks.
Lowest IDD call rates.
Same domestic call rate to all network
Partnership with Air Asia, top up and fly with Air Asia.
Auto top up available which also act like post-paid

8.3.2 Weakness
Limited features such as MMS, Video Call and 3G.
Only prepaid service is provided.
Less promotion and plan.

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 8.3.3 Opportunity
Peoples perception about the cheap rate as it shares the identity with
its Air Asia.
Through influence, may become a trend among teenagers.
All calls are at a flat rate with no hidden charge.
Priority in movie and music tickets

8.3.4 Threats
Other brand such as Digi, Maxis and Celcom control the market.
Other network service provider offers better rates which has more
publicity.
Low signal is some area.

8.4 U MOBILE

8.4.1 Strengths
Domestic market

8.4.2 Weaknesses
Cost structure
Small business units
Productivity
Investments in research and development

8.4.3 Opportunities
New products and services
Global markets
Growing demand
Growing economy

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 8.4.4 Threats
Technological problems
Cash flow
Increasing rates of interest
Increasing costs
Increase in labour costs
Government regulations
External business risks
Rising cost of raw materials
Tax changes
Financial capacity

8.5 TELEKOM MALAYSIA

8.5.1 Strengths
Monetary assistance provided

8.5.2 Weaknesses
Investments in research and development
Productivity

8.5.3 Opportunities
New products and services

8.5.4 Threats
Increasing costs
Government regulations
Price changes

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8.6 P1 YMAX

8.6.1 Strength
First mover & market leader advantage Packet One (P1) is the first
telecommunication firm in Malaysia to deliver WiMAX services to the
public (Malaysian Country Pulse Broadband, 2009).

Technology transfer or sharing from parent company Green PacketP1

is a subsidiary company of Green Packet, a technology company from
Silicon Valley, and gets its technology and designs from Green Packet.
This helps boost P1as they can learn from their parent company.

Lower susceptibility to interference WiMAX is also less susceptible to

interference from the weather such as rain as compared too other wired
and wireless broadband (Lai, 2009). This makes it a much more suitable
choice given the local weather.

8.6.2 Weakness
Coverage Only 35% of Malaysia as P1s WiMAX service is still
relatively new and in the process of being fully implemented, coverage
is still not optimal especially in East Malaysia. P1 is expanding and
hoping to reach 50% coverage for Malaysia but the current low
coverage of 35%leaves a gap and opportunity for competitors to move
in (Lai, 2009 & P1s service getting broader, 2009).

Packages offered are not as value for moneyP1s packages have

Competitors such as AMAX offer unlimited bandwidth (no fair use
policy) and the early termination fee of RM999 is over the top and not
many people would accept such a term (Packet One Networks, 2009).

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8.6.3 Opportunity
States going wireless Penang deal with P1This provides opportunities
as P1 may be able to take advantage of this need and be the most widely
used, known or eve sole provider in the state. This will put them ahead of
their competition as well as help to establish credibility and reputation.

Increase of preference for mobility, broadband, m-commerce and e-

business The boom of e-businesses and m-commerce, doing things such as
paying bills online and being on the go creates an opportunity for P1 as the
trend is to utilize and makes the best of all the time you have. This is due
to the increasing preference for full mobility, doing things on the go and
online connectivity (GMID, 2009).The increase of broadband users is also
a sign that the market would be ready for P1 WiMAX if the service and
promotions are implemented successfully.

Technological advancement MIMOS WiWi The new MIMOS WiWi

allows for better penetration into the broadband market such as being
able to reach rural areas where pulling cables are a costlier, time
consuming and inefficient option. If P1 is able to build a strong brand
name, excellent reputation and services, it will be able to capture the
lions share of the market.

8.6.4 Threats
REDtone is heavily investing in East Malaysia with REDtone heavily
investing and focusing in East Malaysia (Loh, 2009), REDtone has
managed to establish themselves and build credibility there. This creates
an obstacle for P1 whose objective is to be the leader in the wireless
broadband industry (Packet One Networks, 2009). P1 will find it much
harder to penetrate that market without heavy investments in promotions
and improving their services or REDtones service deteriorates

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 Being the oldest and most experienced amongst the seven, Celcom has many competitive
advantages against its major rivals Digi and Maxis. They currently possess the highest
trend in the market share, giving the highest coverage, many products feature and having
the highest customer size in the Malaysian market. They are applying many future
strategies to maintain their position as the market leader in the Malaysian market like
niche marketing, business package development, intercontinental and international service
expansion.

9 OPINIONS & RECOMMENDATION

In my opinion, Celcom have done well for their market. They also have controlling
interest in mobile operator in Asian. They got the cheapest plan for subscriber with
minimum budget. They improve quite a lot in wider coverage also. I also like to suggest
on Blackberry package that they offer to users. For young adults, I believe a monthly
RM50 commitment fee for voice call will suffice. Celcom price for monthly subscription
fee at RM118, meanwhile Digi at RM108 and of course Maxis is the expensive about
RM200. About the Term and Condition on Blackberry Plans, I hope they will state clearly
Term and Condition compared to Maxis. They have very detailed Term and Condition.

Celcom need to understand and respond to its competitors' business structure and
strategies, and capitalize on their weaknesses. Stay up to date on the major developments
affecting the company.

The company's core strengths and weaknesses and areas of development or decline to be
analysed and presented in the profile objectively. Recent developments in the company
covered in the profile will help to track important events.

Equip itself with information that enables Celcom to sharpen its strategies and transform
its operations profitably.

Opportunities that the company can explore and exploit should be sized up and its growth
potential assessed in the profile. Competitive and/or technological threats should be
highlighted.

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 Gain key insights into the company for academic or business research.

Key elements such as SWOT analysis and corporate strategy are incorporated in the
profile to assist Celcoms academic or business research needs.

10 CONCLUSION

As a conclusion, even with enough IT infrastructure within the company, it doesn't

necessarily the company can utilize it efficiently and effectively. In order to achieve
optimize performance, a lot of effort and planning must be made before integrating a new IT
infrastructure to be used in the company. Furthermore, doing a survey and asking opinions
from the employees will surely increase the acceptance of the new technology into the
company.

For any given organization to market any new product, marketing planning is strategy used
to coordinate a well-planned product testing and launching. A well designed marketing
planning ends up bring back positive results for companies.
These strategies if implement as stated would probably bring out a well-balanced positive
result. The by understanding the environmental factors and analysis the strength, weakness,
opportunities and threats of Celcom, we had the better opportunity to look into the situation
as if we were their new product managers. This gave us the chances to build a better
marketing plan that if well implemented, would bring in a positive result.

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11 REFERENCE

a) http://www.researchbeam.com/celcom-axiata-berhad-strategic-swot-analysis-review-
market
b) https://www.celcom.com.my/corporate/aboutus?assetType=PBO_List&assetID=131363
3487047
c) https://en.wikipedia.org/wiki/Celcom
d) Joe, T, John, B & Keith, P, 2005, managing innovation: integrating technological,
market and organizational change, 3rd Ed, john Wiley, England.
e) Philip, K & Armstrong, G 2001, principles of marketing, 9th edit, Prentice Hall, New
Jersey.
f) William, D & Jerome, M 1999, Basic marketing: a global-management approach,
McGraw-hill, London.
g) https://en.wikipedia.org/wiki/Yes_4G
h) http://www.nst.com.my/news/2016/06/155836/yes-unveils-new-double-data-4g-lte-
plans-4g-volte-smartphone
i) https://en.wikipedia.org/wiki/Maxis
j) http://manustrategy.blogspot.my/2012/02/maxis-strategy-and-swot-analysis.html

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