Business EnvironmentDialog Telecom PLC

11/21/2011

Dulaj Silva.Nadeen Fernando.Ruwinda Samarajeewa.Suren Wijeratne.

CONTENTS..

ContentsAcknowledgements................................................................................................................................................3

1.1..........................................................................................................................................................................4

1.1.1....................................................................................................................................................................4

1.1.2....................................................................................................................................................................4

1.1.3....................................................................................................................................................................4

1.1.4....................................................................................................................................................................4

1.1.5....................................................................................................................................................................4

1.2..........................................................................................................................................................................5

1.3..........................................................................................................................................................................6

o Power Interest matrix.................................................................................................................................6

o Power Dynamism matrix............................................................................................................................8

1.4..........................................................................................................................................................................9

1.5........................................................................................................................................................................11

o PESTEL analysis.........................................................................................................................................12

o Michael Porter’s 5 Force Model................................................................................................................13

1.6........................................................................................................................................................................14

1.7........................................................................................................................................................................17

1.8........................................................................................................................................................................17

1.9........................................................................................................................................................................18

1.10......................................................................................................................................................................18

o Business....................................................................................................................................................22

o Product.....................................................................................................................................................22

o Process.....................................................................................................................................................22

o Business....................................................................................................................................................22

o Product.....................................................................................................................................................22

o Process.....................................................................................................................................................22

1.11......................................................................................................................................................................23

Acknowledgements..

We would like to thank the HR Manager of Dialog Telecom PLC for his time and the

effort he put into giving us the information that we need to complete our assignment.

We would like to thanks our Lecture, Mr. C.A. Kankanamge.

We would also like to thank our parents for the time and advice they gave us to

complete the assignment.

And all the persons who were not mentioned but gave their effort to make this

assignment a success.

1.1 Business profile of Dialog Telecom PLC.

1.1.1 Vision of the company;

To be the undisputed leader in the provision of multi-sensory connectivity resulting always in the empowerment and enrichment of Sri Lankan lives and enterprises.

1.1.2 Mission of the company;

To be the most admired Company in Multi-Sensory and related business by providing our customers quality products and services all the time.

1.1.3 Goals and Objectives;

Our objective is to provide digital technology access to a larger population of people, including traditionally marginalized segments. This goal flows from the Company vision “to be the undisputed leader in the provision of multi-sensory connectivity resulting always, in the empowerment and enrichment of Sri Lankan Lives & Enterprise”. Our focus in CR is to enrich the nation through inclusion, through a multi-faceted approach, ensuring we reach out to as many as possible.

1.1.4 Organization structure;

Board of Directors

Chairman Independent Non Independent Group chiefNon executive non executive Executive

CEO of Dialog Tele-Info Structure

Technology Customer Financial Marketing Commercial & InformationManager Officer Officer Manager Programming Officer

Manager

Cooperating FinancialOfficer Controller

1.1.5 Main Operations

Communication => InternetFixed Wi-FiTransmission ServiceHome Satellites (Dialog TV)TV Broadcasting

CSR => Environment ProtectionDonationsEmployee Benefits

External Audit

1.2 Composition of Stake Holders.

A stake holder within the company consists of local institution investors, foreign investors and local retail investors. As indicated below diagram.

As of 31st of Des 2010, there were 22,931 stake holders. And some of the stake holders of the company are;

Axiata Investors (83.32%) Sri Lanka Insurance cooperation (0.92%) HSBC / BBH genes is smaller companies (2.35%) Taprobane Holdings LTD (0.20%) Commercial Bank of Ceylon (0.20%)

Note – Stake Holder Analysis methods that can be used identify Key people groups of people and companies that can influence of company’s success or failures.

1.3 Power Interest matrix and Power Dynamism matrix of Dialog Telecom PLC.

Note –

o Power Interest matrix.

• Stakeholders are categorized on a graph rating their level of interest against the power they possess to exercise those interests. The stakeholders in this way are broadly divided into four groups; low interest/low power (A), high interest/low power (B), low interest/high power (C) and high interest/high power (D).

Group A The company may require little or no effort to be focused on this group. The stakeholders pose no threat due to a lack of both interest and power.

Group B This group, although having a high interest, has little power to exercise control so they can be maintained through the management of information to keep them informed of company events.

Group C This group may or may not realize the degree of effect they have over the company and therefore must be kept satisfied. However, because of their low interest in events, they are unlikely to cause significant disruption.

Group D The company must try to satisfy this group first and foremost as they have the power to affect the company and a high degree of likelihood that they will use their power.

o Power Dynamism matrix.

Note –

Classifies stakeholders in relation to the power they hold and their aptitude for action (dynamism). Can be used to indicate where political effort should be made before instigating change

Stakeholders in groups A & B: are the easiest to deal with.

Stakeholders in group C: are important because they are powerful. But low dynamism means their reaction is predictable and expectations can be managed.

Stakeholders in section D: Need most management attention because they are powerful and reaction is difficult to predict. May need to ‘trial’ new strategies with them.

1.4 Sustainability Report of Dialog Telecom PLC. (CSR)

Note – The CSR is about how companies manage the Business processes to produce an overall positive impact on society.

(By Mallen Burker; 1st published 8th June 2004)

Customer satisfaction of Dialog Telecom PLC

Dialog’s customer satisfaction surveys provide a means for customers to articulate their experiences about our services including areas which need improvement.

Maintaining Charity.

# Privacy protection.

# Insuring health and safety.

# Protection of Minors.

Preserving Planet.

# Material management.

# Controlling paper consumptions.

# E bills and Summery bills.

# Employ constructions to going green.

# Energy saving.

# Energy optimization.

# Green house gas (GHS) imitations.

# Water consumption.

# Protecting bio diversity.

# Climate change.

Community Relations.

# Empowering dialogs retail network.

# Dialog net.

# Public policy.

# Shaping sustainable policy.

Our (Dialogs) People.

# Employ diversity.

# Promoting equality in work place.

# Employ benefits.

# Employ turnover and retirement plans.

# Employ development.

# Insuring health and safety of employs.

1.5 External Scanning of Dialog Telecom PLC.

Note – External environment – Forces outside. An organization which cannot be controlled by the Top management.

External Environmental variables.

Egs: Interest rates, Money supply.

Egs: New products. (3G Sim cards)

Egs: Tax laws.

Egs: Life style changes.

In Dialog Telecom PLC;

Opp. Threats.

# Merging with Axiata Investors. # Other telecommunication companies. (Etisalat,Mobitel ...etc)

# New services. # Slanders from other companies.

Economic – Forces that regulate exchange.

Technological – Problem solving inventions

Political/ Legal – Forcers that allocate laws and regulations.

Socio culture – Forcers that regulate customers of society.

o PESTEL analysis.

o Michael Porter’s 5 Force Model.

1.6 To conduct an internal environment audit we have to analyze a few models such as Michel Porters Value Chain, BCG Growth Share Matrix, Product life Cycle Approach, Benchmarking and McKinsey’s 7s Framework, but we will be focusing on Michel Porters Value Chain and BCG Growth Share Matrix. Michel Porters Value Chain describes a model that is used to identify the Core Competencies of the company. When saying Core Competencies it means identifying the comparative advantage the company has over the other competing firms. In this case it would be what advantage dialog has over its competitors such as Mobitel, Airtel and Etisalat which are its main competitors. In the value chain there are 2 categories such as supportive activities and primary activities, in primary activities there are sub categories such as inbound logistics, operations, outbound logistics, marketing and sales and services but because Dialog is a service oriented company there are no tangible activities so inbound logistics, operations and outbound logistics don’t apply, as Dialog is a service oriented company they fulfill 2 categories which are marketing and sales and services.

Marketing and sales: in dialog they have two main packages, post paid and pre paid, under those they have several packages that can be ordered by any customer based on their necessity, they also have promotions on and off for prizes to encourage customers to either switch to dialog or to take part in promotions, it keeps the customers and the company in good relations.

Services: dialog has a good customer service center that is dedicated to serving the customer’s needs, they also have different options that the customer can choose from, such as weather forecasts and news updates.

Also in the Value Chain there is a category called supportive activities, they are firm infrastructure, Human Resource Management, Technological Development and procurement. Infrastructure meaning the general management, basically to develop the organization what are the things needed. Procurement which is the purchasing of inputs, Technological Development which is developing the processes and products wither newer and better technology. Human Resource Management means the training, development, hiring of new staff in dialog. There is many staff that is needed for the organization to work properly such as administrative staff, customer relations staff members, sales representatives etc.

The BCG Growth Share Matrix basically analyses the products of the company, to see whether they help the company gain profits or whether they need to stop that product as it creates losses. In the matrix there are four categories they are cash cow, dogs, question mark and stars. The symbolism of these images will be explained. The matrix helps organizations understand how their products stand in the market and what they can do to develop them and make them better, to see how much cash they should invest in a product or to discard the product altogether. By developing these products it can lead to a competitive advantage over the rival organizations.

Cash cows they are the products that have the highest market share, they make abnormal profits for an organization in a slow growing market. Because of the abnormal profits organizations love to keep these products going for as long as possible. The cash cow products are at the pinnacle. All products aim to become a cash cow.

Dogs are products with a low market share in a slow growing market. These products generate just enough money to sustain the business. These products are good if the organization intends to stay in a particular position in the market, where they are not at the top and not at the bottom.

Question mark products are not favored by any organization as they only bring in problems. They develop fast and consume a lot of money to sustain them; because of this they have a low market share and thus don’t bring enough profits into the organization.

Star products have high market share and they are in fast growing markets, these products are the closest to becoming cash cows, they cost a bit more to produce but will be good for the organization in the future.

When considering dialog in the BCG Growth Share Matrix there is a problem as they are a service oriented organization, but if we are to consider the services then they have many services that will fit into the above categories. They have 4 products, Mobile connections, Fixed Line connections, Broadband connections and Satellite TV connections. Under each of these connections there are packages that the customers can choose from based on their needs and wants. By selecting the main 4 products and comparing them to the BCG Growth Share Matrix mobile connections would be the Cash Cow, The Star would be Broadband connections, Dogs would be the TV connections and the Question Mark would be the fixed line connections.

By looking at the information provided above we can say that the strength of dialog is its marketing and services. They provide many services and drive to be the best in the market. Their marketing strategies to expand to the rural areas are good strategies because then they will get more business and there will be more coverage in the island. The weakness of dialog would be their diversification. They need to keep improving and creating products that will satisfy the customers constantly. As there are many competitors in the market they need to keep the leadership by developing and expanding into new markets and also focusing on market segments. They are doing this but not enough, they are the market leader in the market and so they don’t do much to develop and diversify their products, we find that this is their let down.

1.7

SO strategies - move to untapped areasST strategies - introduce new technology and servicesWO strategies - increase efficiency in business processes and supply chain of the companyWT strategies - benchmark with strong competitors

1.8Michael Porters Generic Strategies are diversification/differentiation, cost leadership and market segmentation. Diversification and cost leadership are both very broad in scope where as market segmentation is very narrow in scope, diversification is differentiating the product so that it gives the organization a unique product and also adds to the core competencies. Cost leadership is adapting the pricing based on the customer’s willingness to spend. The organization becomes very price sensitive. Market segmentation is identifying which market segment the organization will be focusing on. All these strategies all help to create core competencies, to be better than their competitors. Dialog uses 2 strategies diversification and cost leadership, diversification because they have adapted to the market in Sri Lanka and understood what they needed, so they not only specialize in mobile connections but now they specialize in broadband, TV connections and fixed lines, because of this they are not targeting any market segment, they are looking in the broad scope where they can penetrate further if needed to. They also use cost leadership mainly with the mobile connections and broadband connections, they attempt to reduce the price slightly but not by a lot, they depend on the brand name that they have created to show reliability and coverage, because of this they have penetrated all markets. They are mainly focusing on the diversification strategy, now they are expanding to the more rural areas of Sri Lanka to get more customers and more coverage island wide. The mobile connection market has already been taken by dialog so all they do now is expand the coverage and better signals so basically customer satisfaction. By expanding to the rural areas and implementing cost leadership they are saying that any person can own some product of dialog, Rich or poor everyone can have dialog products.

1.9The strategy that we have decided to focus on is market penetration. As there are losses in the company they are trying to market their existing products in the same market.

1.10

Finance

Choosing and securing the right type of finance for your business is essential.

There are many different types of finance available - each of them designed to meet different needs. This tool can help you by providing a personalized list of the most suitable finance options for your business. 

Businesses are most likely to gain funding through a combination of finance options, rather than a single source.

Also, it is important to be aware that to attract most forms of funding, a comprehensive business plan. Cash flow is an area that will be closely watched as is your payment record with other creditors so it is important the business is prepared before seeking finance.

Example of a business plan

Human resource methods of dialog

Dialog Telecom is running and continuously updating with enhancements of Micro-image HCM platform (HRIS) since 2001.

HRIS is used by the entire DTL group which consist of 4000+ staff

Customized Training and Development Module to manage high volume of training and development activities

Customized performance management system with SMART integration

Utilize the Micro image HCM Employee Self Service Platform to deliver many HR services to it’s dynamic workforce.

High utilization of Micro image HCM Mobile Employee Self Service.

Resource Requirements

For the long term plan it is sufficient to use the forecasts used in your business plan.

The Mini Plan - the One Year Operational Plan

Your mini plan is all about implementation - what actions you need to take in the short term to move towards your long-term objectives. It is more budget-focused, with costs being set against marketing objectives.

It is suggested that you follow the layout of the long term plan, however you do not need to reproduce the background work you have carried out in the audit and used for market background etc.

Start the plan with your objectives for the year, and follow with the strategies you will be

adopting to meet those objectives. You can then support the strategies with detailed action plans, showing timing and costs. You should also consider adding a contingency plan - what assumptions have you made, and how would you deal with the situation if the assumptions prove incorrect.

It may then be appropriate to include a section on financials, demonstrating the effect your marketing activities will have on revenues and profitability.

Finally, you should include a master spreadsheet, detailing when key activities start and finish, and how they dovetail into one another

Operational

A statement of operational requirements is a document that contains information on what a business needs to complete tasks. The term closely relates to the engineering definition of a requirement, which is a documented need for the performance of products or services. Businesses use this concept in the product management phase. Product management is the function that coordinates all the activities in a product's life cycle, from start to finish.

Business

Business requirements are often one inclusion in a company's statement of operational requirements. This requirement dictates what a product accomplishes for the company. Most products add value to a business through sales to consumers and other businesses. Many companies review their product lines and minimize products that have smaller market shares or do not generate enough value for the business. Business owners and managers may set business or operational requirements that outline a minimum value for each product to bring to the company.

Product

Product requirements are the individual characteristics or traits of items sold to consumers. These requirements are often distinct to each good or service a company produces. Business owners create a statement of operating requirements for products based on consumer preference or demand for a particular good, such as a computer or automobile. Product requirements commonly come from business requirements. Owners and managers typically desire products that meet the goals of business requirements so they can economic add value to the company.

Process

Process requirements represent the tasks and activities needed to complete the production, accounting and sales processes related to products. Companies develop processes to produce consistent products, both in quality and in quantity. These requirements ensure the company can maintain its competitive advantage against other companies in the economic marketplace. A company may closely hold these statements of operational requirement if they represent a unique set of activities that other companies cannot duplicate during the production process.

| Business Environment 22

A

A statement of operational requireme

1.11Executive summery

Market penetration is the strategy that we will be focusing on, an existing product in the existing market. Dialog has been facing losses in the mobile connection industry so we are focusing on advertising the present product in an attractive way.

Vision of the company;

To be the undisputed leader in the provision of multi-sensory connectivity resulting always in the empowerment and enrichment of Sri Lankan lives and enterprises.

Mission of the company;

To be the most admired Company in Multi-Sensory and related business by providing our customers quality products and services all the time.

Because of the losses faced by the economic crisis people are not purchasing dialog mobile connections so its time to use market penetration to re enter the existing market and promote our services. The financial backing will come from our partnership with axiata and the profit gained from the previous years.

The key points that help our company prosper is

Our locations of our outlets

Our reputation as a reliable company

Our skilled staff to provide excellent service

The business plan will include a Company Summery, Operations Strategy, Marketing Strategy, Finance Strategy, Management Summery and a Forecasted Financial Statement.

Company summery

Dialog is a diverse company with several services to benefit the consumers, such as telecommunications, fixed lines, broadband connections and TV connections. The company consists of 4000+ staff with several outlets island wide in the major cities to provide the customer service and sales for the customer. We have the largest coverage network in the island. We are the market leader.

Some of the operational strategies are to introduce new packages into the present market to attract more customers based on their needs and wants. Presenting the current products differently to attract more customers. To create packages for specific categories [couple packages, business packages, seasonal packages etc.] expanding into the rural areas.

At the moment we have a competitive edge over our competitors as they haven’t diversified their products; we have low cost packages that cater to all sectors of the market. We have very good

| Business Environment 23

A

A statement of operational requireme

customer service such as on call customer service and walk in customer service; our locations are easily accessed for quick service.

Services

3G connections 4G connections Per second billing Per minute billing IDD packages Post paid Pre paid

Management summery

The company will create an environment that will stimulate personal development and career development. It will conduct training and development programs that will create a specific skill set that the employees will need to excel in the company. The company will also take into consideration the health and benefits that the employees will get such as health plans, vacation plans, bonus plans etc.

Marketing strategy

Our marketing strategy is very basic to provide the customers with the best service. When the customer enters our doors they should have the confidence that we will provide the best that we can, and once they leave they should be satisfied with the service that we have provided. We will have advertising campaigns all island wide, focusing on the major cities and then advertising by word of mouth by our customers. We will get our customers to give us feedback once they are about to leave the outlet, this will help us understand what the customers need. By giving us feedback we will reward them with information about specific packages and also dive them discounts on other Dialog products. We will do a lot of promotional offers in the rural areas which are low cost so that every individual can afford some sort of Dialog mobile connections.

Financial Forecast

| Business Environment 24

We expect our sales to increase as our advertising and promotions spread to the rural areas, we expect the profit in the mobile connections sector to increase by 15% in the coming year. Once the packages that we have released into the general public become known we expect our sales to increase and customers from our competitors to switch to dialog, as they would realize that dialog is better.

| Business Environment 25