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Amity Network

Amity Network is the Fast and Reliable internet service provider in Bangladesh. We believe that
everyone should be able to enjoy trouble-free access to the internet and the opportunities that it
brings. We also believe that in the internet world, speed is happiness so we offer fast and reliable
download backed up by customer service that never sleeps.

To provide fast and uninterrupted internet, AMITY NETWORK is using WiMAX technology,
which is the latest 3G wireless solution.

We aren’t just making the internet work; we’re making life easy for our customers. And now it
can be yours to enjoy.

 Vision

We make life easy

 Mission

The internet is one of the most liberating, exciting features of life in the 21st century. Whatever
you’re into – music, news, views, video, information, chat, and contact, research, for business,
pleasure or education – we think you should be able to enjoy uninterrupted access to it, wherever
you are, whenever you want.

 Key Objectives

• To provide high speed Internet connectivity


• To provide Virtual Private Network (VPN) service to the broadband customers
• To provide a means to bill for the abovementioned services by either time-based or
volume-based billing. It shall provide the customer with the option to select the
services through web server
• To provide both pre-paid and post paid broadband services
 The External Environment – STEP Analysis

S – Sociological
This can refer to demographics, lifestyles, social values, cultures.

T – Technological
This relates to research, development and operations. The emergence of a new technology can
dramatically impact upon an industry.

E – Economic
This refers to the nature and direction of the economy in which a business operates. It can be
basic up/downswings in the general level of economic activity, or changes related to structural
change within relevant sectors.

P – Political
This can be formal or informal. Formal refers to government and regulations. Informal refers to
areas outside of government where political activity occurs.

Sociological Technological

• Rapidly changing technologies & services


• Regulation on technology transfer
• Skilled labor force
• Life style
• Reluctance to accept new/foreign
technology
• Geography: urban/rural

Economic Political

• GDP • Low regulation now


• Structural change since telecoms • Responsibility for content
• Recession: Fewer computers bought • Access to schools, libraries, hospitals
• Less spent by consumers and providers
 SWOT Analysis

Amity Network definitely requires redefining its strategies. What is required is to identify the
potential opportunities and threats implied by this changing environment for the Amity
Network. In changing trends, situations, and events gaining an accurate understanding of
Amity Network‘s strengths and weaknesses will help in better strategic management of
organization. The SWOT analysis for Amity Network is as follows –

STRENTHS WEAKNESSES

 Optical Fiber network and associated  Poor marketing strategy


bandwidth  Inflexibility in mind set
 Customer Relationship  Limited number of value added services
 Transparency in billing  Lack of strategic alliances
 Easy deployment of new services

OPPORTUNITIES THREATS

 Tremendous market growing  Competition from private operators


 Capture market through deep penetration  Keeping pace with fast technological
and low cost advantage changes
 Broaden market expected from convergence  Multinational eyeing BD telecom market
of broadcasting, telecom and entertainment  Decreasing per line revenues due to
industry competitive pricing
 Industry Matrix analysis

The ISP Market

The nature of competition in an industry is a huge determinant of strategy, especially business-


level strategy. The profit potential of an industry is determined by competitive interactions.
Where these interactions are intense, the profit earned is narrowed by the activities of competing.
Where they are mild, profit tends to be high. Michael Porter of the Harvard Business School has
identified five basic forces, which together describe the state of competition in an industry

1. Threat of new entrants


2. Rivalry Among Existing Firms
3. Threat of Substitute Products or Services
4. Bargaining Power of Buyers
5. Bargaining Power of Suppliers

1. Threat of New Entrants

Due to the nature of the ISP market, the threat of new entrants is reasonably strong. There are
low barriers to entry - all that is needed to become an ISP is a small amount of capital and some
technical know-how.

2. Rivalry among Existing Firms

In the basic access services arena, many companies are offering the same deal, and so those that
are doing it more cheaply than others will attract customers. Otherwise, ISPs will have to offer
something special to differentiate them from others i.e. Introduction of WiFi service by
‘iconnect’ by connecting most of the part of the city under WiFi zone.

3. Threat of Substitute Products or Services

There is a tremendous attraction for companies other than ISPs to offer Internet access and
services. They can provide similar services, and sometimes at a reduced rate. They can offer
bundled services which are most convenient to some customers. Telecom industries giants
provide internet services which are not part of ISPs such as GP, Robi, Banglalink etc.

4. Bargaining Power of Buyers

Although an individual consumer has little or no say about how much an ISP charges, due to the
rivalry within the market, ISPs generally have to offer their services at reasonable prices. They will
lose their customer base if they charge more for a service someone else provides more cheaply. Ex:
ZIP has lost almost 40% of its customers due to higher charge.
5. Bargaining Power of Suppliers

The suppliers to ISPs are those that own the networks. Suppliers generally own what is the absolute
backbone of the Internet, and control routing and switching of traffic.

 IFAS Table:

The internal environment analysis mainly involves the strength and weaknesses of an
organization. Here the strength and weaknesses are found according to Amity Network’s current
situation.
Internal Strategic Factors Weight Rating Weighted Comments
Score
1 2 3 4 5
Strengths
S1 Optical Fiber network and 0.25 4 1.0 Amity Network has the set up of huge
associated bandwidth optical fiber network And also has
bandwidth to match with customer’s
expectation.
S2 Transparency in billing 0.15 3 0.45 Amity Networks bills exactly the
customer uses. There is no hidden
charge.
S3 Easy deployment of new 0.1 3 0.3 New services can easily deployed
services
S4 Customer relationship 0.15 4 0.60 Trained employees are always ready to
serve in outlets

Weaknesses
W1 Limited number of value 0.2 3 0.6 Number of value added services is
added services limited compare to other competitors.

W2 Lack of strategic alliances 0.15 3 0.45 Strategic alliances is missing for this
company

Total 1.0 3.4


 EFAS Table

The external environment analysis involves the opportunity and threats of an organization. Here
the opportunities and threats are chosen according to Amity Network’s current situation and
future possibilities.

External Strategic Factors Weight Rating Weighted Comments


Score
1 2 3 4 5
Opportunities
O1 Tremendous market growing 0.2 4 0.8 Rapid growth in number of users.

O2 Capture market through deep 0.15 3 0.45 Compare to other operators Amity
penetration and low cost Network’s cost is lower.
advantage

O3 Broaden market expected 0.1 4 0.4 Good chance of expanding business


from convergence of areas.
broadcasting, telecom and
entertainment industry

Threats
T1 Competition from private 0.2 4 0.8 Local companies are also sharing
operators total market
T2 Keeping pace with fast 0.1 3 0.3 New technologies and features are
technological changes inventing almost in every day.

T3 Multinational eyeing BD 0.15 3 0.45 Different multinational companies


telecom market want to start their business here.

T4 Decreasing per line revenues 0.1 4 0.4 Buyers have the bargaining power
due to competitive pricing dues to availability of ISPs.
Total 1 3.6
 SFAS (Strategic Factor Analysis Summary) Matrix:

Strategic Factors Weight Rate Weighted S I L Comments


Score h n o
o te n
rt r g
m
e
d
ia
te
S1 Optical Fiber network and 0.25 4 1 √ Will keep Amity Network successful
associated bandwidth. in the long run
S3 Easy deployment of new 0.1 3 0.3 √ Helpful for intermediate run.
services.
W1 Limited number of value 0.2 3 0.6 √ Only focus for revenue
added services.
O2 Capture market through deep 0.15 3 0.45 √ Ongoing process as technology is
penetration and low cost becoming more popular
advantage.
O3 Broaden market expected 0.1 4 0.4 √ Using latest technologies expanding
from convergence of business areas
broadcasting, telecom and
entertainment industry.
T2 Keeping pace with fast 0.1 3 0.3 √ People want new things.
technological changes.
T4 Decreasing per line revenues 0.1 4 0.4 √ It effects with in 2to 3 years.
due to competitive pricing.

Total 1 3.45

Notes:

1. List each of the most important factors developed in the IFAS and EFAS tables in Column1.

2. Weight each factor from 1.0 (Most Important) to 0.0 (Not Important) in Column 2 based on that
factor’s probable impact on the company’s strategic position. The total weights must sum to 1.00.

3. Each factor rates from 5.0 (Outstanding) to 1.0 (Poor) in Column 3 based on the company’s
response to that factor.

4. Column 4 is the factor’s weighted score obtained by each factors weight times its rating.

5. For duration in Column 5, short term- less than 1 year; intermediate- 1 to 3 years, long term- over
3 years.
6. Column 6 is the rationale used for each factor.

 TOWS Matrix

It illustrates how the external opportunities and threats can be matched with internal strengths
and weaknesses to result in 4 possible strategic alternatives

Strengths Weaknesses
Internal Factors S1:Optical Fiber network and W1:Poor marketing strategy
associated bandwidth W2:Inflexibility in mind set
S2:Customer Relationship W3:Limited number of value
S3:Transparency in billing added services
External Factors S4:Easy deployment of new W4:Lack of strategic alliances
services
Opportunities SO strategies WO strategies
O1:Tremendous market
growing Amity Network has optical
O2:Capture market through deep Fiber network and associated
penetration and low cost bandwidth so it can broaden
advantage market expected from Not Applicable
O3:Broaden market expected convergence of broadcasting,
from convergence of telecom and entertainment
broadcasting, telecom and industry.
entertainment industry

Threats ST strategies WT strategies


T1:Competition from private
operators By deploying new services the By keeping pace with
T2:Keeping pace with fast competition from private technological changes Amity
technological changes operators can be eliminated. network can provide valued
T3:Multinational eyeing BD added services to its
telecom market customers.
T4:Decreasing per line revenues
due to competitive pricing
 Position in BCG Matrix

Amity Network has four packages available for its customers. Customer can choose his or her
desired or required package as per monthly use. The packages are Amity 1, Amity 2, Amity 3,
and Amity 4.

Amity 1: 5 GB @ tk.400 (256 kbps)


Amity 2: 12 GB @ tk.1400 (512 kbps)
Amity 3: Unlimited usage @ tk.1600 (256 kbps)
Amity 4: Unlimited usage @ tk.3500 (1 mbps)
Market Growth Rate

Market Share

High Low

STAR QUESTION MARK


High

Amity 1 Amity 4

CASH COW DOGS


Low

Amity 3 Amity 2

Star:
Amity 1 package has both high relative market share and growth rate. This is the most popular
package of Amity Network

Question Mark:
Though the market share of Amity 4 package is low but market growth rate is high. Most of the
corporate houses use this package.

Cash Cow:
Basically the customers of this package are home users. The market share is high but currently
the growth rate is low of this package.

Dogs:
It seems that Amity 2 package doesn’t fulfill the expectations of the users. For this package both
the market share and growth rate is low.

 Challenges and Recommendations

Having analyzed the external environment and assessed the internal strengths and weaknesses of
Amity Network, the key issues can be summarized as follows:

1. Innovative products based on convergent technology in order to acquire dominant market


position. Amity Network can achieve by –
 Replacement of all the outdated technologies
 Redeployment of unutilized capacities should be considered first.
 Increasing the capital investment in technologies.

2. Amity Network 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

3. Strategic Alliances
 Strategic alliance to capture market through The combined operations will also
ensure several other sustainable advantages such as deeper and stronger pockets
and greater marketing influence.
 Amity Network should have strategic alliance with content providers,
international long distance operators and cable operators.
4. Marketing strategy needs to be redefined
 Marketing Strategy of Amity Network should be defined and should focus around
Value Added Services, building strong distribution chain and differential
treatment to corporate customers.

5. Restructuring of organizational on business type model

Amity Network‘s organization structure still remains more or less functional in structure.
The with each product/segment considered as a separate business will help in

 Better management
 Improved organizational communication
 Better performance monitoring

6. Cost Management Strategies

As a result of slow growth in revenues and maintaining 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.

 There is need to assess the core competencies of Amity Network and outsource the non-
core activities like bill printing, call center management etc. by transformational cost
control.
 Conclusion

Amity Network should change its strategy of acting as follower to that of leader. Instead of
reacting to other operators move it should start acting proactively. Amity Network should adapt
greater standardization and flexibility in systems. Only then new service rollouts will be faster,
and ideas will be converted into revenue streams. The overall strategy of Amity Network can be
of concentrating on the broadband business in future. At the same time capital investments can
be made in next generation networks where stress should be on advanced technologies, content
based data services. Emphasis on organizational restructuring coupled with customer orientation
and operational efficiency can help Amity Network to be the best internet service provider in
Bangladesh.