ASSIGNMENT 2

CORPORATE STRATEGY

SUBMITTED TO. SUBMITTED BY

DR. NEERAJ SHARMA. NAME. KARISHMA

CLASS MBA 4

ROLL NO 1811717
BSNL
 INTRODUCTION

 Bharat Sanchar Nigam Ltd (BSNL), the corporate version of erstwhile DOT, came to existence
on 1st October 2000. Ever since the formation of BSNL, the Indian telecommunications scenario
has been transforming itself into a multi-player, multi-product market with varied market sizes
and segments. Within the basic phone service the value chain has split into Basic services, long
distance players, and international long distance players.

BSNL’s POSITIONING IN TELECOM INDUSTRY

                To understand and suggest – how strategic management can help BSNL – the first thing
is to understand the Telecom industry environment and the stakeholders involved. Apart from
having to cope with the change in structure and culture (government to corporate), BSNL has had
to gear itself to meet competition in various segments – basic services, long distance (LD), and
International Long Distance (ILD), and Internet Service Provision (ISP), and Mobile services.
With the advent of competition the private operators have been impacting the strategic matrix by
influencing regulatory bodies, adopting intelligent media strategies, and by targeting the creamy
layer of customers. While, political control over the public sector remains a contentious strategic
issue in the country; with the formation of a company, the internal strategy of the BSNL board
will be of gaining considerable autonomy. Labour unions are powerful internal stakeholders, as
are the middle managers/ other staff that have the primary responsibility for customer care.

BEHAVIORAL AFFECT OF BSNL LTD IN STRATEGIC IMPLEMENTATION :

1. BSNL should have clear technology strategy in line with its mission of providing services

with world class State-of-art technology at affordable prices. Since the Telecom Industry is

under going frequent technological revolutions the product cycles are very short. BSNL

should go in for innovative products based on convergent technology in order to acquire

dominant market position. This can be achieved by –

·        Replacement of all the outdated technologies immediately,

·        Redeployment of unutilized capacities should be considered first.

 ·        Early deployment of cost effective Wi fi/Wi max Technologies

·        Migrating to NGN (Soft Switch) on large scales, which will unable seamless integration

of upcoming technologies.

·        Increasing the capital investment in convergent technologies even if it renders certain

in use technologies redundant. 

2.   BSNL should initiate Customer Orientation Strategy to retain existing customers as well

as to attract new customers by –

 Creating a Service-Oriented culture within the organization by linking incentives to

customer satisfaction.

 Introducing flexible Registration Terms so that new customers are attracted.

 Promoting/Introducing user-friendly service systems such as Electronic Clearing

system, internet or E-seva for bill payment

 Educating the customer about services in detail and respective tariff structure

 Introducing service at door-step.

 

3. Extensive use of IT can not only improve operations but can add to greater customer

satisfaction. Despite being a technology intensive organization IT penetration in BSNL is not

commensurate.  Presently, the use of IT in BSNL is restricted to –

·        DQ (Directory Enquiry), IVRS (Interactive Voice Response System)

·        Accounting and billing systems

·        Commercial & Fault Repair System package

  

The commercial, fault repair system and billing needs to be integrated by use of a standard

CDR based CRM package. BSNL should immediately create intra-BSNL IT network

connecting all the SDCAs through MPLS-VPN network for the organization’s own use to

improve efficiency and transparency.

4. BSNL should redefine procurement processes to shorten the purchase-decision cycle,

which is critical in project implementation to any telecom service provider. BSNL should

enter in long term supply contract with world-class players to come out of L-1  mantra of

tendering process. This will help BSNL to counter the strategy of its competitors to stall the

very procurements of critical items.

5.      Strategic alliance to get pan-India footprints through BSNL-MTNL merger. The

combined operations will also ensure several other sustainable advantages such as deeper and
stronger pockets and greater marketing clout.  These synergies would obviously help BSNL
by way of volumes to engage in prolonged tariff wars for a whole range of value-added
services and give private telecom companies a run- for- their money. The merger of BSNL
with MTNL can also give some respite to BSNL by expanding its resource kitty with which
it can fulfil its responsibility of providing rural connectivity all across the country. 

6.      BSNL should have strategic alliance with content providers, international long distance
operators and cable operators as a diversification strategy. Turnkey projects for providing
total solutions to corporates /governments should be undertaken as a business proposition by
entering into partnerships.

7.      Marketing is going to be the key to success – BSNL should come out with a plethora of
schemes for the end subscriber, both commercial and residential. If BSNL wants to retain its
title as KING BSNL, it has to treat its customers as king. The marketing strategy of BSNL
should identify the fact that their telecom is no longer a services market but has turned into a
commodity market. In fact, it is a mixture of both as it behaves as a commodity market
 initially when the connection is to be sold. BSNL’s marketing strategy needs to be
redefined and should focus around Value Added Services, building strong distribution chain
and differential treatment to premium/corporate customers.

8. Human Resource Management – Human resource is the most prized asset of any

organization and for organization like BSNL who are in service sector this becomes all the

more important. Bharat Sanchar Nigam Limited has a vast manpower of about 3,50,000. To

meet the technological challenges, employees need to be trained for technology up-

gradation, modernization, computerization etc in a targeted manner. Though different

training programs are being run in various training centers of BSNL to impart technology

based training, they seem to be outdated in the fast changing competitive environment and

with formation of corporate. The dynamics of transition from a lethargic government

organization to a professionally running company requires tremendous up gradation in

Human Resources. There are various aspects of managing an organization that many

employees even at top levels in BSNL are unaware of. At one hand the competition has

brought in the requirement to learn professional skills in fields like Marketing, HRD, Finance

etc. , on the other hand, the formation of BSNL has made it mandatory for BSNL’s middle

and top level managers to acquire knowledge in company laws, taxation, labor laws etc.

BSNL need to  overhaul its Human Resource Management strategy and should focus on –
 

·    Tie up with top business schools in India for training their managers at various

levels.

·    Redeploying its manpower from bigger cities to smaller ones

·    Coming out with VRS/CRS for manpower above the age of 50.
 ·    Creating value through employee motivation and should develop reward and

punishment system

·    Effective knowledge management within organization

·    Preventing manpower churning

The VRS/CRS scheme is likely to be opposed by the unions and the implementation may be
difficult in the politicized environment. However, rightsizing the organization is of paramount
importance for the long run interests.

9.      BSNL’s organization structure still remains more or less functional in structure.

The restructuring of organizational on business type model with each product/segment
considered as a separate business will help in

a.       Better management

b.      Improved segmental efficiencies

c.       Improved organizational communication

d.      Better performance monitoring

e.       Develop focus on revenue

As an alternative, it may be argued that the organization may be vertically split portfolio wise
but this will affect the synergy within the organization. Hence, focus should be on the
restructuring of hierarchy.

10.  Revenue Maximization Strategies:   The telecom sector is the most competitive sector

post liberalization. This has resulted in a movement from growth based business model that

emphasized growth in numbers or even ARPU to profit-based model where the success is

measured by margins. BSNL as part of the transition has to adopt both cost reduction and

revenue enhancement measures, which would directly impact profitability.

Revenue maximization strategies will have two components, one internal to the organization

and the other external. The internal aspect would involve an initiative for change of process,

technology, organizational structure etc. In this context, revenue assurance is the key to

improving the bottom line for BSNL. This is proactive strategy to capture all revenues due for

the services provided. Presently, BSNL generates bills through different software’s across the

zones of operation, which are disintegrated and provide only basic solutions. The industry

standard for revenue leakage is about 3 to 7% percent of revenue, which in money terms

translates to about Rs.2100 crores for BSNL. Therefore plugging revenue leakages is just the

first and most obvious part of a Revenue Assurance initiative. The key concerns for BSNL for

effective revenue realization are –

·    The delay in customer billing after activation

·    Time lag between calls generated and billed

·    Scope of fraud

·    Non-availability of uniform database.

Therefore the focus should be on immediate implementation of CDR based billing. This would

require huge investment but the return would more than commensurate. The software should

be scalable and be able to incorporate all the next generation value added services. The

implementation of CDR based system will also generate the following benefits:

·      Plugging of leakage of revenue.

·        Formulation of appropriate marketing strategies –The data captured in the

servers and other devices will provide detailed information on usage patterns,

hence, will contribute to formulation of appropriate marketing strategies.

 Information and flexibility of the software will enable BSNL to cater to subscribers

segment wise. Specific packages can be offered by BSNL to the corporate clients

tailored to their needs. The usage and traffic information will also offer a solution

to evolve pricing schemes for services which can then be bundled in a way so as to

drive customer behaviour in a desired manner in terms of usage time, distances

etc.

·        Help in efficient customer care –   The information available will enable the setting

up of “ Call Centres”. A “Call Centre” is prerequisite to provision of efficient

information and promotion of services.

11.  Revenue generation through Value Added Services(VAS) – The revenues of BSNL have
been increasing constantly for last 15 years as can be seen from the following chart –

            The major chunk of these revenues have come from basic services and only recently the
revenues from cellular business (to the tune of Rs 3000 cr. per annum) and from ADC and
inter-connect charges etc. have grown to significant level. With continuous decrease in long
distance call rates and growth of private network the revenues from ADC and inter-connect
charges will eventually disappear. BSNL should realize that the basic services market and
revenues from it are also shrinking and it is necessary for a telecom service provider like
BSNL to concentrate on increasing revenues through VAS. While many of the operators
in India and outside are generating more than 25% of their revenues through VAS, BSNL
cannot attribute even 5% of its revenues to VAS. In order to succeed the strategy of BSNL
should be built around strengthening its VAS like SMS, MMS, broadband content generation
etc. and marketing them. BSNL can also go for large-scale tie-ups with content providers.

12. Pricing strategy – Tariff fixation is crucial in a competitive scenario where it is required to

offer, “value based”, top down convergent services are being provided by the competitors

instead of cost based, bottom up pricing.  The focus has been on acquiring profitable
 customers, however, for BSNL, it is equally important to target the old (by number of years

of association) customers to ensure retention. Revenue figures indicate that ARPU is higher

for that category of subscribers. Loyalty programmes serve as an excellent platform for such

strategy. The customers’ feedback should be incorporated to assess the attractiveness and

economic viability of such programmes. A successful loyalty programme becomes the

driving force in customer relationship management strategy.

 

13.  Cost Management Strategies: As a result of slow growth in revenues and declining market

share, focus is simultaneously required on cost control measures like –

·    Integrated financial software is essential for the management to be able to

monitor costs.

·     BSNL’s liability in terms compulsory operational expenses is very compared to

industry standards, primarily due to excess manpower. Though a high percentage of

employees will retire in three years time ,however in order to expedite the

process, voluntary retirement schemes have to be introduced.

·    BSNL is also burdened with legacy technology, which needs to be phased out, and

replaced with cost-effective technology alternatives.

·    There is need to assess the core competencies of BSNL and outsource the non-core

activities like bill printing, call enter management etc. by transformational cost

control.
 

 
14. Effective utilization of surplus- It has been observed that BSNL has cut down on Capital costs quite

drastically and at the same time the Balance Sheet over the years reveal that “reserve and surplus“

is accumulating, Rs.52184 cr. in 2004-05 in comparison to Rs.43421.8 cr. in 2003-04. Future of

telecom business in India in the wake of onslaught of technology needs to be assessed accurately.

BSNL is faced with waiting lists, indicative of existing demand. Therefore, the surplus will have to

be invested in technology. Survival of Business is the long-term objective, and BSNL must learn to

use the technology as an effective tool, and control must always be with business not with

technology.

 
Nokia
BEHAVIOURAL ASPECTS OF NOKIA LTD ON STRATEGY IMPLEMENTATION

the challenges that surface during strategy implementation that had

not been anticipated, the interviewees said that political turbulence was the most important issue

facing any implementation process. Other challenges include supporters of the strategic decision

leaving the organization during implementation, change of guiding policies by umbrella bodies,

system breakdown, low or underestimated budget allocation and underestimation of the

commitment, time, emotion, and energy needed to overcome inertia in their organization and

translate plans into action.

Other factors in the external environment that had an adverse impact in strategy implementation

at the company were indicated by the interviewees as increasingly sophisticated customers and

management practices, escalating globalization, more prevalent and subtle product

differentiation, credit crunch, political environment, breakneck competition from other players.

The interviewees indicated that some of competing activities that cause distractions inhibiting

strategy implementation include too many conflicting priorities, advertisement/promotion, well

versed customers, door to door sale and the company trying to cope with competition in the

industry hence losing perspective of its strategy. The interviewees further indicated the

challenges posed by the inadequacy of information systems used to monitor strategy

implementation include the implementers not knowing how effective the strategy
implementation has been, may lead to loss of opportunities, lack of timely feedback and false

report on progress and consequently ultimate failure.

To the question on the challenges posed by customers and staff not fully appreciating the

strategy on strategy implementation, the interviewees indicated that they faced challenges of

criticism, lack of cooperation, strategy failure and implementation delays. The interviewees, on

the impact of poor communication and diminished feelings of ownership and commitment by

employees to strategy implementation, said that it resulted to delayed results, wastage of

resources, loss of business, and rejection of the strategy, demotivation and lack of commitment

to new ideas.

The interviewees indicated that the main areas of focus for long term strategy implementations in

the company are such as structure, control and the corporate culture. The interviewees also

indicated that strategy monitoring and accountability are effective in addressing the challenge of

strategy implementations as they ensure that the implementation process is followed to the letter.

The interviewees further indicated that strategic planning assists in responding to the challenges

of strategy implementation in that the planning process if properly done ensures that all the

activities to be undertaken are put in place thus minimizing the number of emerging activities

during the implementation process and also if all the staff members are involved in the planning,

this guarantees cooperation in the implementation.

In strategic planning the interviewees indicated that the formalities employed to ensure

successful strategy implementation were such as strategic analysis which include conducting

some sort of scan, or review, of the organization's environment and also looking at the various

strengths, weaknesses, opportunities and threats (SWOT) regarding the organization; setting

strategic direction where planners carefully come to conclusions about what the organization

must do as a result of the major issues and opportunities facing the organization and action

planning which is carefully laying out how the strategic goals will be accomplished.

On whether there is planning cycles used in the company to ensure successful strategy

implementations, the study established that there was a planning cycle that brought together all

aspects of planning into a coherent, unified process and assisted the management to plan and

manage ongoing projects up to a certain level of complexity.

The interviewees indicated that the strategies adopted by Nokia Company to ensure successful

strategy implementation include participatory planning, staff motivation, strategic measurement

continuous evaluation, staff training and development, creation of a strategic map (or causal

business model). On the effectiveness of the responses in addressing the challenges of strategy

implementation in Nokia Ltd, the interviewees indicated that the responses were very effective as

most of the challenges experienced in the previous years were eradicated.

The interviewees indicated that the challenges of strategy implementation that are still not

addressed by Nokia ltd were such as lack of support, non involvement of all players, inadequate

know-how on the key stages, poor coordination, poor communication, unclear strategic

intentions, conflicting priorities, unawareness or misunderstanding of the strategy, unaligned

organizational systems and resources, competing activities and uncontrollable environmental

factors.

This assignment aims to determine participation in the implementation process of the strategy of

the people of Nokia. Executives, managers, executives, department heads and other lower-level

employees are involved in the implementation process of the strategy of Nokia, but it plays a

central role in the creation of paintings. Implementing the strategy of the organisation’s role is to

ensure the implementation of the strategic plan at the end of the activities.

Cabinet members successfully implement the effect of early intervention strategies, Member of

the Council of Ministers in the early stages of implementation of intervention strategies to help

members understand the purpose of the ultra - rules tidy and cultural style, and therefore vital to

the continued success of the business strategy .

The employees involved in these processes in order to increase the

sense of ownership changes and political confidence and contribute to their personal motivation

and professional, successful strategy implementation also.

The company uses the framework of the implementation of the

strategy with a specific strategy for the implementation of the various components of the six

tasks, including the construction organisation can be the strategy, establishing the budgetary

strategy to support installation of internal management systems, support and reward are closely

related to the objectives and strategies of development incentives, which form the corporate
culture to adapt strategies and exercising strategic leadership

When asked about the effective implementation of the strategy, the company of other factors,

including the factors leading to a clear implementation and strategic planning objectives, and

effective climate, so the implementation of the priorities of there a lot of resources, adequate

facilities and a flexible organisational structure, management arrangements strategic consensus,

leadership and positive attitude towards the success of the strategy .