SWOT: PROJECT GUIDELINES

Commerce 1st Term Project

Dev Shroff

Std-12 Div.-D Roll No. __

Topic: Select 2 business enterprises from the same sector. Study the selected business
organizations In terms of ownership, capital and profitability.

Make a SWOT analysis of both the companies and present it in a tabular format. Also, conclude
the project with a write up on the comparative study of the enterprises.

1. Theory:

A. What is Business Environment?

Every business enterprise is a part of the society. It exists and operates in association with various
groups in society such as customers, competitors, bankers and so on. All these groups influence the
functioning of business in one way or another. They constitute the environment of the business.

The term ‘business environment’ refers to a sum total of all individuals, institutions and other forces
that lie outside a business enterprise but that may influence its functioning and performance.

It is very important for business firms to understand their environment and changes occurring to it.
Business enterprises which know their environment and are ready to adapt to environmental changes
would be successful. On the other hand, firms which fail to adapt to their environment are unlikely to
survive in the long run.

Is it also called ‘market environment’.

It also refers to factors and forces that affect a firm's ability to build and maintain successful  customer
relationships. The business environment has been defined as "the totality of physical and social
factors that are taken directly into consideration in the decision-making behavior of individuals in the
organization.”

The three levels of the environment are as follows:

1. Internal environment – the internal elements of the organization used to create, communicate and
deliver market offerings.
2. External Micro environment – small forces external the company that affect its ability to serve its
customers.
3. External Macro environment – larger societal forces that affect the survival of the organization.

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B. What is a SWOT analysis?

SWOT stands for "strengths, weaknesses, opportunities and threats". It is a type of analysis that helps
you develop your business strategy by comparing internal factors (strengths and weaknesses) against
external factors (opportunities and threats). Examples of internal factors include things that you have
control over and can change, like your staff or your intellectual property. External factors are things
that you cannot control, like consumer trends or competitors.
A traditional SWOT analysis takes your strengths, weaknesses, opportunities, and threats and
organizes them into a list that is presented in a 2 x 2 grid.
“It gives you a firm grasp of what is affecting your business internally and externally," said Lynne
Pratt, "By carefully evaluating the analysis, a business can find new ways of progressing and
achieving growth."

Why should you do a SWOT analysis?

A SWOT analysis gives you a detailed, unbiased overview of your business as a whole or a specific
product or campaign. It can also help train your brain to consider every factor that could possibly
affect your project or business. When you're facing a tough issue or if you're just unsure of your
current strategy, a SWOT analysis illuminates details so you can formulate actionable plans based on
each of the four quadrants.
Understanding your company's position within your market or industry and knowing how and where
you can grow is critical for any business owner. This knowledge allows you to strategically develop
your company rather than wasting your efforts trying to expand into a market that doesn't align with
your business or being steamrolled by a surprise competitor.
While strengths and weakness can be identified by analyzing the internal environment (corporate
appraisal), opportunities and threats can be identified by analyzing the external environment.
Strength: Strength is an inherent capability of the company which it can use to gain strategic
advantage over its competitors.
Weakness: Weakness is an inherent limitation or constraint of the company which creates strategic
disadvantage for it.
Opportunity: Opportunity is a favourable condition in the company’s external environment which
enables it to strengthen its position. Economic liberalization and globalization offers an opportunity to
companies which want to enter banking, insurance, telecommunication sectors.
Threats: Threat is an unfavourable condition in the company’s external environment which causes a
damage or risk to its position.

Questions asked during SWOT analysis:

Strengths
Financial Strengths: What is your most reliable source of financial growth? Is it your current
customers? A particular product? Your service fee structure?
Customer Strengths: Where is your customer growth coming from? Is this coming from referrals, or a
particular industry segment like healthcare or retail? Is it mainly retail or commercial? Why are your
customers choosing you over your competitors?

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Internal Strengths: What do you do very well as an organization? Are you the first to innovate
products in your industry? Do you have strong customer relationships or partnerships?
Learning & Growth Strengths: Where do you excel insofar as your employees are concerned? Is it
your compensation model? Could it be your workforce development program? Your culture?
Weaknesses
Next you should ask yourself, “What are we not good at?” or “Where do we have opportunities to
improve?”
Financial Weaknesses: What is your biggest financial weakness? Perhaps most of your customers are
in a cyclical industry and subject to market whims, for example. Or maybe your most used product
has the lowest profit margins.
Customer Weaknesses: Where do your customers think you need to improve? This could be your
investment products, locations, loan origination, or competitive prices for interest rates.
Internal Weaknesses: What do you do poorly? Do you have opportunities to improve in project
management for opening new branches? What about for one-touch call resolution for customer
service?
Learning & Growth Weaknesses: What are your biggest challenges with employees? Do you have
particularly high turnover in certain departments or a negative perception of the organizational
culture?
Opportunities
Following your discussion on threats, ask those in leadership to look toward the future and consider,
“Where do we see big possibilities for our organization?”
Financial Opportunities: What is your biggest opportunity to improve your finances? This might be
starting a new product line, increasing customer retention, or going after a new geographical area.
Customer Opportunities: Where could you dramatically improve with your customers? Could you
improve your online interface? What about cross-selling related products, or better understanding
your customers’ purchasing habits?
Internal Opportunities: What processes will drive you well into the future if you could improve upon
them? This may entail partnering with a mortgage origination company or developing neighborhood
sponsorships.
Learning & Growth Opportunities: What opportunities do you have to leverage staff? For example, do
you have cross-training opportunities? Could you make a few tweaks to improve your culture and thus
your retention?
Threats
After identifying opportunities, zero in on your biggest threats by asking, “What do we see on the
horizon as being potentially harmful to our organization?”
Financial Threats: What threats could seriously impact your financial health? This could be low-cost
competitors, a partner entering the banking space, or an overseas banking product.
Customer Threats: What is your biggest concern about your customers? Does one of your competitors
offer zero-fee checking that could steal some of your market share? How simple is your customers’
ease of departure?
Internal Threats: What current areas of your business might harm you later? Do you have a new
product rollout soon that could potentially fail? Are you struggling through a merger or an office
upgrade?
Learning & Growth Threats: What threatens the people within your organization? This could be
anything from instability in your customer support department to staff member departures to a
department-specific pushback against new technology.
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India’s Telecommunications Sector

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India is the world's second-largest telecommunications market, with around 1,204.8 million at the end
of October 2019. The telecom market can be split into three segments – wireless, wire line and
internet services. The wireless market segment comprises of 98.17 per cent of the total subscriber
base, as of October 2019 compared to 95.90 per cent in FY11. As of October 2019, rural subscribers
form 43.90 per cent of total telephone subscribers, compared to 33.35 per cent in FY11.
India is also the second largest country in terms of internet subscribers. As of 2019, India holds the
world’s highest data usage per smartphone at an average of 9.8 GB per month. It is expected to double
to 18 GB by 2024. The number of internet subscribers in the country increased at a CAGR of 41.58
per cent during FY06-FY18 to reach 665.31 million in 2018-19. India became the world’s fastest-
growing market for mobile applications in the first quarter of 2018 and remained as the world’s fastest
growing market for Google Play downloads in the second and third quarter of 2018. The internet user
base in India has crossed 500 million mark and is likely to reach 627 million by end 2019. Total
wireless data usage in India grew 119 per cent year-on-year to 1,58,50,560 terabytes between January-
March 2019. The contribution of 3G and 4G data usage in total volume of wireless data usage are
about 6.83 per cent and 92.56 per cent respectively during the Q1 FY20. Share of 2G data usage
remained 0.60 per cent during the quarter.

2. Background and information about the first company:

Vodafone Idea Limited

Type Public

BSE: 532822
Traded as
NSE: IDEA

ISIN INE669E01016

Industry Telecommunications

Predecessor Vodafone India

Idea Cellular Limited

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 Founded 31 August 2018; 19 months ago

Headquarters Mumbai
Gandhinagar 

Key people Kumar Mangalam Birla

(Chairman)

Ravinder Takkar
(CEO)

Products Mobile telephony

Wireless broadband
Internet services

Revenue 378,236 million (US$5.3 billion)

Operating income 192,243 million (US$−2.7 billion)

Net income 145,711 million (US$−2.0 billion)

Total assets 2,296,995 million (US$32 billion)

Total equity 596,348 million (US$8.4 billion)

Owners Vodafone Group (45.1%)

Aditya Birla Group (26.0%)
Axiata Group Berhad (8.17%)
Private Equity (20.73%) 

Members 332.65 million
(31 December 2019)

Number of employees 13,520 (2019)

Subsidiaries You Broadband Limited

Website www.vodafoneidea.com

VODAFONE IDEA LIMITED

 NSE : IDEA
 BSE : 532822
 ISIN CODE : INE669E01016
 INDUSTRY : TELECOMMUNICATION - SERVICE PROVIDER
 HOUSE : BIRLA ADITYA

BSE:
4.10 
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Previous Close: 3.28
Day's Open: 3.34
Bid Price (Qty): 4.11 (31823)
Offer Price (Qty): 0.00 (0)
Day’s High – Low: 4.24 - 3.31
52 Week Range: 2.61 - 18.15
Volume Traded (in 000's): 55317.23
Value traded (in Cr.): 22.68
PE Ratio (x): 0.00
M Cap (in Cr.): 11781.51

NSE:
4.10 

Previous Close: 3.30

Day's Open: 3.30
Bid Price (Qty): 4.10 (1494293)
Offer Price (Qty): 0.00 (0)
Day’s High – Low: 4.25 - 3.30
52 Week Range: 2.4 - 18.15
Volume Traded (in 000's): 804160.44
Value traded (in Cr.): 329.71
PE Ratio (x): 0.00
M Cap (in Cr.): 11781.51

Vodafone Idea Limited is an Indian telecom operator with its headquarters based in Mumbai,
Maharashtra and Gandhinagar, Gujarat. Vodafone Idea is a pan-India integrated GSM operator
offering 2G, 3G and 4G Volte mobile services under two brands named Vodafone and Idea. Vodafone
Idea also provides services including Mobile payments, IoT, enterprise offerings and entertainment,
accessible via both digital channels as well as on-ground touch points, centers across the country. As
of 31 December 2019, Vodafone Idea has a subscriber base of 332.65 million, making it second
largest mobile telecommunications network in India and fifth largest mobile telecommunications
network in the world. Vodafone Idea has a broadband network of 340,000 sites, distribution reach of
1.7 million retail outlets.

On 31 August 2018, Vodafone India merged with Idea Cellular, and was renamed as Vodafone Idea
Limited. However, the merged entity continues using both the Idea and Vodafone brand. Currently,
the Vodafone Group holds a 45.1% stake in the combined entity, the Aditya Birla Group holds 26%
and the remaining shares will be held by the public.[10] Kumar Mangalam Birla heads the merged

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company as the Chairman and Balesh Sharma used to be the CEO. After a plunge in share price of
Vodafone Idea by 80% on NSE, Balesh Sharma resigned citing personal reasons. Ravinder Takkar,
Ex-CEO of Vodafone Romania and the key deal negotiator from Vodafone has taken over the reigns
as CEO.

Management:

Ravinder Takkar Managing Director & CEO

Pankaj Kapdeo Secretary

Akshaya Moondra Chief Financial Officer

Organization Structure:

Subsidiaries:

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Vodafone m-pesa Limited
Vodafone India Ventures Limited
Vodafone Business Services Limited
Mobile Commerce Solutions Limited
Vodafone Foundation
Your Broadband India Limited
You Systems Integration P Ltd
Idea Cellular Services Limited

Products
Products and services offered by Vodafone:
a. Connectivity- Vodafone product known as gateway is a signal booster for wireless connections
b. Headsets and headphones – Bluetooth enabled headphones
c. Memory cards- micro and mini memory card
d. Chargers- portable mobile and tablet chargers.
e. Prepaid Sim cards – extras, smart packs, calls, sms, internet over mobile, data cellular.
f. Postpaid Sim cards- Red, Classic 100.

Ownership Structure:

Currently, the Vodafone Group holds a 45.1% stake in the combined entity, the Aditya Birla Group
holds 26% and the remaining shares will be held by the public.

Capital Structure:
                                                                                                                                                                                                                     

Authorized Issued
Period Instrument -PAIDUP-
Capital Capital

Face
From To   (Rs. cr) (Rs. cr) Shares (nos) Capital
Value

2018- Equity 28793.002 8,735.56 8,735,558,32 10 8,735.5

2019 Share 9 6

2017- Equity 6775 4,359.32 4,359,320,93 10 4,359.3

2018 Share 0 2

2016- Equity 6775 3,605.33 3,605,328,23 10 3,605.3

2017 Share 1 3

Capitalization:

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 MKT-CAP
COMPANY LATEST(RS) CHG(%) 52 WK HIGH 52 WK LOW
(RS CR)

VODAFONE IDEA 4.10 25.00 18.15 2.61 11781.51

Balance Sheet:
Consolidated Balance Sheet ------------------- in Rs. Cr. -------------------

  Mar 19 Mar 18

  12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 8,735.60 4,359.32

Total Share Capital 8,735.60 4,359.32

Reserves and Surplus 50,832.30 22,822.94

Total Reserves and Surplus 50,832.30 22,822.94

Employees Stock Options 66.90 80.20

Total Shareholders Funds 59,634.80 27,262.46

Preference Shares Issued By Subsidiary

0.00 0.00
Companies

NON-CURRENT LIABILITIES

Long Term Borrowings 104,402.90 56,940.80

Deferred Tax Liabilities [Net] 47.10 65.94

Other Long Term Liabilities 11,029.60 3,166.29

Long Term Provisions 346.70 310.75

Total Non-Current Liabilities 115,826.30 60,483.77

CURRENT LIABILITIES

Short Term Borrowings 4,120.70 21.69

Trade Payables 12,648.60 3,547.91

Other Current Liabilities 37,431.20 7,238.96

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Short Term Provisions 37.90 22.37

Total Current Liabilities 54,238.40 10,830.93

Total Capital And Liabilities 229,699.50 98,577.17

ASSETS

NON-CURRENT ASSETS

Tangible Assets 50,319.80 24,454.93

Intangible Assets 127,476.70 55,230.86

Capital Work-In-Progress 2,358.70 651.30

Intangible Assets Under Development 2,744.30 2,933.99

Fixed Assets 182,899.50 83,271.08

Non-Current Investments 1,529.80 1,660.11

Deferred Tax Assets [Net] 10,338.50 1,205.16

Long Term Loans And Advances 0.80 2.40

Other Non-Current Assets 16,546.10 2,197.74

Total Non-Current Assets 211,318.30 88,342.61

CURRENT ASSETS

Current Investments 6,708.80 5,630.43

Inventories 4.20 36.67

Trade Receivables 3,300.00 887.39

Cash And Cash Equivalents 990.80 29.13

Short Term Loans And Advances 1.90 2.02

OtherCurrentAssets 7,375.50 3,648.93

Total Current Assets 18,381.20 10,234.56

Total Assets 229,699.50 98,577.17

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

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Contingent Liabilities 41,202.10 31,231.01

BONUS DETAILS

NON-CURRENT INVESTMENTS

Non-Current Investments Unquoted Book

0.00 0.00
Value

CURRENT INVESTMENTS

Current Investments Unquoted Book 0.00

0.00
Value

Profit & Loss:

Consolidated Profit & Loss account ------------------- in Rs. Cr. -------------------

  Mar 19 Mar 18

  12 mths 12 mths

INCOME

Revenue From Operations [Gross] 37,005.60 28,247.12

Revenue From Operations [Net] 37,005.60 28,247.12

Other Operating Revenues 86.90 31.82

Total Operating Revenues 37,092.50 28,278.94

Other Income 731.10 352.93

Total Revenue 37,823.60 28,631.87

EXPENSES

Purchase Of Stock-In Trade 26.00 7.26

Operating And Direct Expenses 28,951.90 19,744.84

Changes In Inventories Of FG,WIP And

0.00 0.00
Stock-In Trade

Employee Benefit Expenses 2,294.40 1,543.04

Finance Costs 9,462.80 4,812.97

Depreciation And Amortisation Expenses 14,535.60 8,409.10

Other Expenses 1,777.20 936.24

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Total Expenses 57,047.90 35,453.45

Profit/Loss Before Exceptional, -

-6,821.58
ExtraOrdinary Items And Tax 19,224.30

Exceptional Items 852.10 0.00

-
Profit/Loss Before Tax -6,821.58
18,372.20

Tax Expenses-Continued Operations

Current Tax 18.20 123.39

Less: MAT Credit Entitlement 0.00 0.00

Deferred Tax -3,589.70 -2,454.46

Total Tax Expenses -3,571.50 -2,331.07

Profit/Loss After Tax And Before -

-4,490.51
ExtraOrdinary Items 14,800.70
Profit/Loss From Continuing -
-4,490.51
Operations 14,800.70
-
Profit/Loss For The Period -4,490.51
14,800.70

Share Of Profit/Loss Of Associates 196.80 322.35

Consolidated Profit/Loss After MI And -

-4,168.16
Associates 14,603.90

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) -21.00 -11.00

Diluted EPS (Rs.) -21.00 -11.00

DIVIDEND AND DIVIDEND PERCENTAGE

Equity Share Dividend 0.00 0.00

Tax On Dividend 0.00 0.00

Ratio Analysis:

Key Financial Ratios ------------------- in Rs. Cr. -------------------

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 Mar
  Mar '18
'19

Investment Valuation Ratios

Face Value 10.00 10.00
Dividend Per Share -- --
Operating Profit Per Share (Rs) 4.44 12.95
Net Operating Profit Per Share (Rs) 42.19 63.84
Free Reserves Per Share (Rs) -- --
Bonus in Equity Capital -- --
Profitability Ratios
Operating Profit Margin(%) 10.52 20.28
Profit Before Interest And Tax Margin(%) -27.76 -9.39
Gross Profit Margin(%) -28.57 -9.59
Cash Profit Margin(%) -2.32 13.56
Adjusted Cash Margin(%) -2.32 13.56
Net Profit Margin(%) -38.13 -16.02
Adjusted Net Profit Margin(%) -37.05 -15.67
Return On Capital Employed(%) -5.49 -2.35
Return On Net Worth(%) -22.15 -14.60
Adjusted Return on Net Worth(%) -24.10 -14.60
Return on Assets Excluding Revaluations 72.62 70.01
Return on Assets Including Revaluations 72.62 70.01
Return on Long Term Funds(%) -5.63 -2.35
Liquidity And Solvency Ratios
Current Ratio 0.56 0.43
Quick Ratio 0.48 0.43
Debt Equity Ratio 1.71 1.87
Long Term Debt Equity Ratio 1.65 1.87
Debt Coverage Ratios
Interest Cover -1.00 -0.42
Total Debt to Owners Fund 1.71 1.87
Financial Charges Coverage Ratio 0.52 1.28
Financial Charges Coverage Ratio Post
1.04 1.79
Tax
Management Efficiency Ratios
Inventory Turnover Ratio -- 820.90
Debtors Turnover Ratio 17.57 25.94
Investments Turnover Ratio -- 820.90
Fixed Assets Turnover Ratio 0.41 0.72
Total Assets Turnover Ratio 0.82 0.86
Asset Turnover Ratio 0.28 0.34
 
Average Raw Material Holding -- --
Average Finished Goods Held -- --

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 -
Number of Days In Working Capital -172.21
550.49
Profit & Loss Account Ratios
Material Cost Composition -- --
Imported Composition of Raw Materials
-- --
Consumed
Selling Distribution Cost Composition -- --
Expenses as Composition of Total Sales 2.87 --
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit -- --
Dividend Payout Ratio Cash Profit -- --
Earning Retention Ratio 100.00 100.00
Cash Earning Retention Ratio -- 100.00
Adjusted Cash Flow Times

Parent
Vodafone
Company

Category Mobile service provider

Sector Telecom Service Providers

Tagline/
Power to you; Everybody’s Welcome
Slogans

People with smartphones looking for high speed internet and good
Segment
mobile services

Target Group Urban & tier 2 middle and upper class segment

Vodafone is positioned as a data strong telecom service provider

Positioning
with excellence in services globally

1. SWOT analysis of the first company:

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Below is the Strengths, Weaknesses, Opportunities & Threats (SWOT) Analysis of
Vodafone.

Strengths Strengths are:

1. Vodafone is one of the most popular cellular service provider across
the world 
2. Vodafone has over 1000,000+ employees globally
3. The company provides landline, mobile telephony, digital TV services
etc.
4. Vodafone has a very high brand visibility and strong brand recognition
5. Strong advertising with Zoo Zoo concepts made Vodafone ads very
popular 
6. Tie-up with international sports like Formula One and other popular
sporting events
7. Vodafone has its presence in 150+ countries and services more than
470 million customers
8. Diverse services like payment options (m-Pesa), mHealth services,
foundation etc. are provided
9. Highly efficient website ensures easy online payments, recharges,
service activations
10. Provides movies, music etc through various Vodafone apps

1. Massive market coverage – Vodafone is ranked 395th amongst

the world’s top 2000 brands by Forbes. It is known for its wide
distribution and network cover. It has the second largest
subscriber base in India. It is the second highest ranked telecom
operator and is behind only China Mobile. Vodafone operates in
more than 25 countries across the globe.
2. Revenues generated – Vodafone generates billions of dollars of
revenue every year. The latest figure of 2016 is it has generated
revenue of a whopping 87.3 billion dollars. Naturally, this results in
boosting the rankings and expectations from Vodafone even
further. It is ranked 104 in its sales figures across the global 2000
list and number 84 in market value.
3. Marketing – The Marketing by Vodafone is legendary. The
Vodafone pug is known across the globe to follow Vodafone users
everywhere. Similarly, the Vodafone zoo zoo’s was a brilliant and
endearing campaign which converted many users to die-hard fans
of Vodafone. Time and time again, Vodafone comes out with
brilliant campaigns at the right time.
4. Premium cost – While other telecom operators are penetrating the
market, Vodafone is differentiating its services regularly. Due to its

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 marketing and communications, users already think that Vodafone
is a notch above the rest and they are proud to be a user of
Vodafone. As a result, Vodafone is still able to get some premium
out of their customers and float in margins whereas other telecom
operators are struggling to maintain positive margins.
5. Subscriber base – Vodafone has a massive subscriber base which
they retain efficiently. As of 2016, the total subscriber of Vodafone
across the world was close to 350 million people.
6. Brand recalland brand valuation – The brand valuation of
Vodafone is 28 billion dollars as of 2016. Besides the brand
valuation, the brand equity and the brand recall of the brand is very
high too. It is impossible that anyone will not refer to Vodafone
when talking about the top telecom players.

Weakness Here are the weaknesses in the Vodafone SWOT Analysis:

1.Being a global brand, the company comes under constant vigilance
from global authorities
2. Vodafone has to constantly fight for market share with competitors due
to price wars

1. Dropping subscriber base – As can be seen from the **graph

below**, the subscriber base of Vodafone is dropping in the last 4
years. This is a major problem for Vodafone looking at the global
market scenario. The brand needs to strengthen its core

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 values and implement strategies to acquire more customers

2. Dropping brand valuation – One of the possible reasons for the

drop in subscriber base of Vodafone can be the dropping brand
valuation of the company. Both – subscriber base and brand
valuation of the company was very strong to begin with. But both
have them have suffered in the last 3-4 years. Brand valuation drop
in the last 1 year was phenomenal.

Opportunity 1. Rural markets – If a high percentage of subscriber base of

Vodafone is in India, then rural market penetration becomes a
priority for the telecom operator. However, Vodafone seems to be
operating more only in urban markets whereas its top competitor
such as Airtel and Reliance communications have penetrated rural
markets successfully. This naturally causes a loss of future
potential for Vodafone.
2. Emerging markets – Not only rural markets in developing
countries, other emerging markets such as those in Africa are also
a great potential place for Vodafone. These new and emerging

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 markets have increasing disposable income and communication
becomes important once a network is growing. Thus, there are
many roles a telecom company can play in an emerging market.
Hence, besides the rural markets, Vodafone should also
concentrate on Emerging markets across the globe.
3. Dependency on Cellular networks – As people rely more and more
on their smartphones, parallel their dependency on cellular
networks is rising. This is pretty good news for Vodafone
because customer retention is not much of a problem. It is a need
based segment, so the number of potential users will always be on
the rise. The challenge is to acquire the potential base of
consumers.
4. 4G – The 4G spectrum has created disruption but at the same time
has made people look at the telecom operators once again to see
which one they will side with. In India for example, the free plans
of Reliance Jio have resulted in many people leaving Vodafone and
joining Jio. Nonetheless, in the long run, the 4G spectrum can
result in higher revenues for the telecom operator.
5. Improving the network coverage – A major problem which
consumers of Vodafone sometimes have from the brand is its
network coverage. Vodafone is known to have poor network
coverage many a times. This is possible because of the number of
towers the company owns or operates out of. Keeping an eye on
the network coverage and improving it as much as possible is a
good opportunity for Vodafone to increase customer acquisition
as well as retain current customers of the organization.

Competition – A major threat for Vodafone is the competition it

faces everywhere it goes. So if it goes to the US, it will face
competition from Verizon Wireless and AT&T. China has its own
China mobile. India has Airtel and Reliance Jio. There is cut throat
competition in the telecom sector and this is strongly affecting the
brand Vodafone, which was trying to offer differentiated services
by keeping a bit of premium pricing.
Low margins – Vodafone’s differentiation initially worked, but in
Threats
the last 3-4 years, the competition has been so fierce, that the
whole telecom market is operating in a penetrative pricing
mechanism. Competition is always good for consumers but too
much competition is bad for companies. As a result, the margins
earned against the revenues generated has been steadily dropping
for all telecom brands (vodafone included) in the last 3-4 years.
Mobile number portability – MNP is a major threat to Vodafone
because whenever a competitor introduces a cheap plan or

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 someone like Reliance Jio gives phone calls and internet for free,
then consumers dont think twice before switching brands. MNP
has made it easier for consumers to switch between multiple
telecom operaters. As a result, this is a major threat to Vodafone
which is losing its brand equity already.
Saturation – Saturation of the market in terms of the noise created
by the telecom operators as well as the number of competitors
present ultimately results in a waste of revenue spent on customer
acquisition campaigns or strategies. Saturation results in the
brand spending more and more on customer acquisition and
getting lesser customers for the same amount spent.

Below are the top Vodafone competitors:

1.Reliance Jio
2.Idea
3.Airtel
4.Tata Docomo
5.Reliance Communications
Competitors
6.MTNL
7.BSNL
8.Uninor
9.Tata Indicom
10.Virgin Mobile
11.Aircel

2. Background and present information about the second company:

22
 Bharti Airtel Limited

Type Public

BSE: 532454
Traded as
NSE: BHARTIARTL
BSE SENSEX Constituent

ISIN INE397D01024

Industry Telecommunications

Founded 7 July 1995; 24 years ago

Founder Sunil Bharti Mittal

Headquarters Bharti Crescent, 1, Nelson Mandela Road,

New Delhi, India

Area served Worldwide

Key people Sunil Bharti Mittal (Chairman)

Gopal Vittal (MD & CEO)

Products Fixed line telephone

Mobile phone
Broadband
Satellite television
Digital television
Internet television
IPTV

Revenue 807,802 million (US$11 billion)

Operating income 17,318 million (US$−240 million) (2019)

Net income 4,095 million (US$57 million) (2019)

Total assets 2,751,975 million (US$39 billion) (2019)

Members 411.42 million 

(September 2019)

Number of 14,818 (2019)

employees

Parent Bharti Enterprises (64%)

Singtel (36%)

Website www.airtel.com

23
 BHARTI AIRTEL LTD - STOCK PRICE

 NSE : BHARTIARTL
 BSE : 532454
 ISIN CODE : INE397D01024
 INDUSTRY : TELECOMMUNICATION - SERVICE PROVIDER
 HOUSE : BHARTI

NSE

512.20 

Previous Close 488.70

Day's Open 491.00
Bid Price (Qty) 0.00 (0)
Offer Price (Qty) 512.20 (37)
Day’s High – Low 520.90 - 491.00
52 Week Range 305.43 - 568.85
Volume Traded (in 000's) 23966.03
Value traded (in Cr.) 1227.54
PE Ratio (x) 0.00
M Cap (in Cr.) 279188.15

BSE

511.75 

Previous Close 489.05

Day's Open 491.00
Bid Price (Qty) 511.75 (76)
Offer Price (Qty) 0.00 (0)
Day’s High – Low 520.80 - 491.00
52 Week Range 305.69 - 568.6
Volume Traded (in 000's) 940.40
Value traded (in Cr.) 48.12
PE Ratio (x) 0.00
M Cap (in Cr.) 279188.15
24
 Parent Company Bharti

Category Mobile service provider

Sector Telecom Service Providers

Express yourself; The best network for your smartphone; 

Tagline/ Slogans
Har ek friend zaroori hota hai

USP Airtel is a top telecom brand in India with a huge customer base

Segment People looking for an efficient telecom service

Middle and upper class above 18 years age; YUPS(Young Upward

Target Group
Professionals)

Positioning Aspirational and lifestyle brand offering excellent telecom service

Bharti Airtel Limited, also known as Airtel, is an Indian global telecommunications services company
based in Delhi, India. It operates in 18 countries across South Asia and Africa, and also in the Channel
Islands. Airtel provides GSM, 3G, 4G LTE, 4G+ mobile services, fixed line broadband and voice
services depending upon the country of operation. Airtel had also rolled out its VoLTE technology
across all Indian telecom circles. It is the third largest mobile network operator in India and the
second largest mobile network operator in the world with over 411.42 million subscribers. Airtel was
named India's 2nd most valuable brand in the first ever “Brandz” ranking by Millard Brown.

Airtel is credited with pioneering the business strategy of outsourcing all of its business operations
except marketing, sales and finance and building the 'minutes factory' model of low cost and high
volumes. The strategy has since been adopted by several operators. Airtel's equipment is provided and
maintained by Ericsson, Huawei, and Nokia Networks whereas IT support is provided by Amdocs.
The transmission towers are maintained by subsidiaries and joint venture companies of Bharti
including Bharti Infratel and Indus Towers in India. Ericsson agreed for the first time to be paid by the

25
minute for installation and maintenance of their equipment rather than being paid up front, which
allowed Airtel to provide low call rates of Rs.1 (1.4¢ US)/minute.

Management

Gopal Vittal Managing Director & CEO

Kimsuka Narasimhan Independent Director

Manish Kejriwal Independent Director

Pankaj Tewari Company Secretary

Pankaj Tewari Secretary

Organization structure

Subsidiaries

 Airtel India
Airtel Payments Bank Limited
Airtel digital TV
Airtel Sri Lanka
Airtel Bangladesh
Airtel Africa
26
 Telenor
Airtel-Vodafone
Wynk
Robi

Products

Fixed line telephone

Mobile phone
Broadband
Satellite television
Digital television
Internet television
IPTV

Ownership structure

Shareholding Pattern - Bharti Airtel Ltd.

Holder's Name No of Shares % Share Holding

No Of Shares 5455557355 100%

Promoters 2116236438 38.79%

Foreign Institutions 1055686754 19.35%

Others 299890117 5.5%

Mutual Funds 546343823 10.01%

Genera lPublic 34028171 0.62%

Financial Institutions 299716367 5.49%

Foreign Promoter 1101344767 20.19%

GDR 2310918 0.04%

Capital Structure - Bharti Airtel Ltd.

Authorized
Period Instrument Capital Issued Capital -PAIDUP-

From To   (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital (Rs.

27
 Cr)

2018 2019 Equity Share 14753.0 1998.7 3997400107 5.0 1998.7

2017 2018 Equity Share 2750.0 1998.7 3997400102 5.0 1998.7

2016 2017 Equity Share 2750.0 1998.7 3997400102 5.0 1998.7

Capitalization

MKT-CAP
COMPANY LATEST(RS) CHG(%) 52 WK HIGH 52 WK LOW
(RS CR)

BHARTI AIRTEL 511.75 4.64 568.60 305.69 279188.29

Balance Sheet

Standalone Balance Sheet ------------------- in Rs. Cr. -------------------

  Mar '19 Mar '18
  12 mths 12 mths
Sources Of Funds
Total Share Capital 1,998.70 1,998.70
Equity Share Capital 1,998.70 1,998.70
Reserves 96,360.60 100,862.20
Networth 98,359.30 102,860.90
Secured Loans 0.30 -5,244.90
Unsecured Loans 83,789.60 67,781.00
Total Debt 83,789.90 62,536.10
Total Liabilities 182,149.20 165,397.00
 
 
Application Of Funds
Gross Block 198,221.40 180,754.60
Less: Revaluation Reserves 0.00 0.00
Less: Accum. Depreciation 66,487.40 58,145.20
Net Block 131,734.00 122,609.40
Capital Work in Progress 5,567.30 5,542.70
Investments 38,476.80 48,128.20
Inventories 1.00 6.30
Sundry Debtors 3,849.00 4,319.60
Cash and Bank Balance 219.60 545.10
Total Current Assets 4,069.60 4,871.00
Loans and Advances 42,837.80 23,786.00
Total CA, Loans & Advances 46,907.40 28,657.00

28
Current Liabilities 40,234.80 39,231.10
Provisions 301.50 309.20
Total CL & Provisions 40,536.30 39,540.30
Net Current Assets 6,371.10 -10,883.30
Total Assets 182,149.20 165,397.00
Contingent Liabilities 19,352.60 31,187.00
Book Value (Rs) 246.06 257.32

Profit and Loss

Standalone Profit & Loss account ------------------- in Rs. Cr. -------------------

  Mar '19 Mar '18

  12 moths 12 mths

Income
Sales Turnover 49,608.00 53,663.00
Net Sales 49,608.00 53,663.00
Other Income 3,065.20 -362.80
Total Income 52,673.20 53,300.20
Expenditure
Raw Materials 0.00 0.00
Power & Fuel Cost 4,684.70 4,564.70
Employee Cost 1,471.00 1,720.90
Other Manufacturing Expenses 24,560.40 22,843.90
Selling and Admin Expenses 560.90 578.70
Miscellaneous Expenses 6,029.40 6,149.90
Total Expenses 37,306.40 35,858.10
  Mar '19 Mar '18

  12 mths 12 mths

Operating Profit 12,301.60 17,804.90

PBDIT 15,366.80 17,442.10
Interest 5,473.30 5,069.00
PBDT 9,893.50 12,373.10
Depreciation 15,087.60 13,048.60
Profit Before Tax -5,194.10 -675.50
PBT (Post Extra-ord Items) -5,194.10 -675.50
Tax -3,374.70 -760.40
Reported Net Profit -1,829.00 79.20
Total Value Addition 37,306.40 35,858.10
Equity Dividend 999.30 999.30
Corporate Dividend Tax 999.50 535.70
Per share data (annualized)
Shares in issue (lakhs) 39,974.00 39,974.00

29
Earning Per Share (Rs) -4.58 0.20
Equity Dividend (%) 50.00 106.80
Book Value (Rs) 246.06 257.32

Ratio Analysis

Consolidated Key Financial Ratios ------------------- in Rs. Cr. -------------------

  Mar '19 Mar '18

Investment Valuation Ratios

Face Value 5.00 5.00
Dividend Per Share -- --
Operating Profit Per Share (Rs) 64.12 75.83
Net Operating Profit Per Share (Rs) 202.08 209.98
Free Reserves Per Share (Rs) -- --
Bonus in Equity Capital 78.37 78.37
Profitability Ratios
Operating Profit Margin (%) 31.72 36.11
Profit Before Interest And Tax Margin (%) 5.28 13.18
Gross Profit Margin (%) 5.30 13.18
Cash Profit Margin (%) 24.36 25.20
Adjusted Cash Margin (%) 24.36 25.20
Net Profit Margin (%) 0.50 1.30
Adjusted Net Profit Margin (%) 0.50 1.30
Return On Capital Employed (%) 2.32 6.61
Return On Net Worth (%) 0.57 1.58
Adjusted Return on Net Worth (%) -2.23 2.75
Return on Assets Excluding Revaluations 212.51 196.00
Return on Assets Including Revaluations 212.51 196.00
Return on Long Term Funds (%) 2.88 7.16
Liquidity And Solvency Ratios
Current Ratio 0.44 0.43
Quick Ratio 0.62 0.46
Debt Equity Ratio 1.76 1.41
Long Term Debt Equity Ratio 1.22 1.22
Debt Coverage Ratios
Interest Cover 0.48 1.37
Total Debt to Owners Fund 1.76 1.41
Financial Charges Coverage Ratio 2.70 3.76
Financial Charges Coverage Ratio Post
3.27 3.52
Tax
Management Efficiency Ratios
Inventory Turnover Ratio 913.80 1,211.21
Debtors Turnover Ratio 15.86 15.80

30
Investments Turnover Ratio 913.80 1,211.21
Fixed Assets Turnover Ratio 0.44 0.53
Total Assets Turnover Ratio 0.89 1.41
Asset Turnover Ratio 0.42 0.48
 
Average Raw Material Holding -- --
Average Finished Goods Held -- --
Number of Days In Working Capital -223.89 -259.52
Profit & Loss Account Ratios
Material Cost Composition -- --
Imported Composition of Raw Materials
-- --
Consumed
Selling Distribution Cost Composition 1.34 1.27
Expenses as Composition of Total Sales -- --
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 588.42 168.10
Dividend Payout Ratio Cash Profit 11.07 9.08
Earning Retention Ratio 250.89 3.57
Cash Earning Retention Ratio 87.80 91.27
Adjusted Cash Flow Times 6.35 4.63

3. Strength, weaknesses, opportunities and threats of the second company:

Airtel SWOT Analysis

Strengths 1. . High Brand Equity : Airtel is one of the largest cellular service provider in

India, with over 260 million subscribers. It is one of the pioneer brands in
telecommunication having a high brand recall.

2. Largest Telecom operators in the world with 200+ million subscribers acros
19 countries make Airtel a strong brand. Countries like Sri Lanka, Banglades
and Africa have a strong subscriber base.

3. Airtel is the only Indian operator, with VSNL, that has an international
submarine cable.

4. High brand visibility of Airtel : Strong advertising with celebrity brand

ambassadors has boosted the brand.

31
 5. Airtel has great value added services like Airtel money, online recharges,
bill payments.

6. Airtel stores, kiosks, sponsorships etc. have boosted the brand presence
worldwide.

7. Renowned Telecom company: With its 19+ years of rich experience in

telecom industry this MNC had travelled far to become world’s 3 rd largest
telecom operator overseas with operations in nearly 20 countries.

8. Extensive infrastructure: With the formation of Indus tower, the

infrastructure of Airtel has extended in all parts of the country resulting
into nationwide penetration.

9. Strategic Alliances: The company has top notch stakeholders,

namely Sony Ericsson, Nokia and the recent one being Apple. Such
strategic alliances boost the brand equity and the bottom line of the
company.

10. Torchbearer of the telecom Industry: With its number 1 spot due to its
excellent services in developing economies, Airtel has interconnected the li
of people in an highly efficient way. Thus, where Vodafone is an external
entrant, Airtel is a leading nationwide player in India and the torchbearer
of the telecom industry in India

Weaknesses 1. Price competition from other telecom players leads to limited market
share.

2. Outsourced Operations: Outsourcing operations helped Airtel in

lowering its cost. But on the other hand, they are running the risk of
being dependent on some other companies which may affect its
operations.

3. Venturing into African operations: Although it’s been 4 years that

Airtel has acquired Zain’s Africa business, but Airtel is still struggling
to turn around the unit which was bought at a whopping 9 billion
dollars.

4. High Debt: With its acquisitions turning out to bad investment, and

32
 credit being high and margins being low, Airtel group is under high
debt. Airtel does not have as deep pockets as Vodafone.

5. User privacy is an allegation which the brand has had to face

6. The company lacks nationwide 3G license with spectrum in 13 out of 2

telecom service areas. Airtel’s LTE network for mobile broadband is
still confined to only 4 cities in India.

1. Strategic Partnership: Partnering with smart phone companies is goin

to be a smart strategy as far as MNP (mobile number portability in
India) is concerned. This will ensure fixed cash flows in the future and
higher customer base.
2. Market Development: With fierce competition in the telecom industry
& shrinking margins, venturing out in new markets/developing
economies will prove fruitful for the company.
3. VAS (Value Added services) is going to future of the telecommunicatio
Opportunities industry & by specializing itself in this vertical Airtel
can differentiate itself in highly competitive market. With introduction
of unique services, Airtel can avail higher margins.
4. Untapped geography of the current market: Although it is currently
providing 3G & 4G services, but these services are limited to specific
geographical locations. Expansion of these services to most of its regio
will help the company get more margins and customers. Plus an
untapped rural market is yet to be tapped.
5. LTE: The whole wireless world is moving towards LTE (long term
evolution or 4G). LTE for mobile broadband can be a good solution fo
India where fixed broadband penetration is otherwise low.

6. Airtel has taken the lead with this version of LTE in 4 cities, but
deployment needs to catch up pace. Despite a weak LTE ecosystem in
India. Airtel should portray itself as the embracer of that technology.
Latest and low cost technology can be used by Airtel due to its strong
presence.

33
 1. Government Regulatory Framework: With the auction of spectrum &
change in the government policies on a regular basis, it is a potential
threat to the stability & existence of this industry thereby affecting the
players.

2. Competition: New entrants and their low price offering can reduce

Threats
market share.

3. Price war in the home market and declining margins due to this is
adversely affecting the overall business of the group.

4. MNP (Mobile number portability): MNP gives the customer

independence to change the service provider while retaining the numb
and as Airtel charges are premium over other service providers, it can
see slump in subscriber base in the next fiscal year with PAN India
MNP applicable from May 3rd 2015.

Below are the top 11 Airtel competitors:

1. Reliance Jio
3. Vodafone Idea
4. Tata Docomo
5. Reliance Communications
Competitors 6. MTNL
7. BSNL
8. Uninor
9. Tata Indicom
10. Virgin Mobile
11. Aircel

4. Conclusion: listing all important points of SWOT as a comparison between both the
companies:
Tabular format

Point of party

 Both the brands have same pricing strategies.

34
  Both the brands have the same market segmentation

Point of difference

 Target customers of Vodafone is middle class people, whereas Airtel targets elite and
upmarket class of people
 Airtel positions itself as a lifestyle brand whereas Vodafone positions itself as a
common man’s brand.
 Bharti Airtel is the leader in telecommunication sector. However, Vodafone has been
giving tough competition to Bharti Airtel.
 Bharti Airtel holds the lion share of market of communication sector. Vodafone is the
second largest player and shareholder in Communication sector. Vodafone making
and changing the strategies to capture the market shares

Marketing strategy of Airtel :

 Price: low price strategy

 Place: maximum outlets and service centers

 Promotion: various schemes for pre-paid and post-paid.

 Advertising : with actors like Sharukh Khan etc

Marketing strategy of Vodafone :

 Vodafone target the rural India. By offering cheap and light mobile sets Vodafone attracts
most of the customers of small villages and towns.

 Offering cheap handsets

 Vodafone offers cheap and free connections to all customers. In every small town the
potential customers can easily purchase the Vodafone SIM & Sets.

 Free support and services in every district and big towns.

Conclusion of comparative study of selected companies

Paragraph form

35
5. Bibliography:

https://wikipedia.org

https://www.mbaskool.com/

https://www.slideshare.net/

www.google.com

money control

economic times

marketing91

wireless telecom

ukessays

S Chand’s ISC Commerce Std.12 Textbook

36