ANGELES UNIVERSITY FOUNDATION

Angeles City
College of Business and Accountancy

STRATEGIC MANAGEMENT ANALYSIS

ON GLOBE TELECOM, INC. (GLO)
FINAL REQUIREMENT

SUBMITTED BY

BUTIAL, Rizelle Y.

FELICIANO, Alicia Rose C.

MANCENON, Erica D.

SUDLA, Karen G.

TRAGICO, Frances Kyle A.

SUBMITTED TO

MS. MAURALYN H. PEDIGLORIO, MBA

DECEMBER 6, 2021
TABLE OF CONTENTS

I. EXECUTIVE SUMMARY…………………………………………………………………

II. COMPANY INTRODUCTION…………………………………………………………..

1) AREAS OF OPERATIONS AND HEADQUARTERS………………………….
2) SHAREHOLDERS STRUCTURE………………………………………………..
3) MANAGEMENT TEAM…………………………………………………………...
4) CONGLOMERATE MAP AND SUBSIDIARIES………………………………..
5) MARKETS COVERED……………………………………………………………
6) MARKET POSITION AND MARKET SHARE………………………………….
7) PRODUCTS AND SERVICES PORTFOLIO…………………………………..
8) DISTRIBUTION STRATEGY AND CHANNEL PARTNERS………………….

III. CORPORATE VISION, MISSION AND CORE VALUES……………………………

1) VISION, MISSION STATEMENT, & CORE VALUES………………………….
2) EVALUATION OF VISION STATEMENT………………………………………
3) EVALUATION OF MISSION STATEMENT AND CORE VALUES………….

IV. EXTERNAL ANALYSIS………………………..………………………………………

1) MACRO ENVIRONMENTAL ANALYSIS………………………………………
i. ECONOMIC FACTORS………………………..…………………………..
ii. ENVIRONMENTAL FACTORS………………………..…………………
iii. TECHNOLOGICAL FACTORS…………………………………………..
2) INDUSTRY AND COMPETITOR ANALYSIS…………………………………
iv. PORTER’S FIVE FORCES………………………..……………………..

V. STRATEGY FORMULATION………………………..……………………………..
1) STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS (SWOT)
MATRIX………………………..………………………..…………………………..

VI. CORPORATE OBJECTIVES, STRATEGIES, RECOMMENDATION AND

ACTION PLAN………………………..………………………..……………………………
1) RECOMMENDED COMPANY VISION STATEMENT…………………………
2) RECOMMENDED COMPANY MISSION STATEMENT………………………
3) RECOMMENDED STRATEGIC OBJECTIVES…………………………………
4) RECOMMENDED STRATEGIES………………………..………………………

VII. STRATEGY IMPLEMENTATION, EVALUATION, MONITORING AND

CONTROL………………………..………………………..………………………………..
1) RECOMMENDED BALANCE SCORECARD……………………………………
i. STRATEGY MAP………………………..……………………………..…….
I. EXECUTIVE SUMMARY

Globe Telecoms is one of the two biggest telecommunication companies in the

Philippines. The company is one of the pioneers in the GSM, 3G and LTE technologies
in the country. The company also offers a wide array of products and services to its
subscribers under one brand; this includes mobile voice and data, SMS, fixed-line voice
and data, and broadband. The telecommunication industry in the Philippines is capital
intensive and is highly regulated by the government, various fees and licenses are
needed in order to operate. This makes it hard for new players to enter the said
industry. This kind of business environment creates a duopolistic structure in the
telecommunication industry in the country.

Also, the current good fiscal environment in the country coupled by the strong
growth of internet usage makes the telecommunication industry in the Philippines an
attractive industry to invest in even if the products and services which were major
contributors to the past revenues of the industry are either already slowing down or in
decline. Globe Telecoms is one of the two big players in the telecommunication industry
in the Philippines.

When it comes to critical factors to succeed in the telecommunication industry in

the Philippines, the most important factors that were identified were the reliability of the
products and service the telecommunication players provide and the degree of
customer satisfaction their subscribers have. This is where almost all the
telecommunication players, including Globe Telecoms, lagged on. Getting those factors
right will surely spell success for a telecommunication company. But due to the better
financial standing of the company compared to other smaller players, wide market
reach, modern products and services and an effective and wide reaching marketing, the
company still got a satisfactory score in CPM of 2.73.

When it comes to the internal capabilities of Globe Telecoms, one of the critical
factors that was noted was the company lacks customer service training to its
employees and high corporate hierarchy which somewhat explains the low customer
satisfaction its customers are getting and the slow decision making of the company’s
management. Globe Telecoms must improve on this together with network speed and
reliability wherein the company, and other major telecommunication industry players, is
lagging compared to its ASEAN counterparts. But on a positive note, Globe Telecoms
has a wide subscriber base and the top brand when it comes to the lucrative mobile
post-paid segment of the industry.

These factors, coupled with modern products and services being offered to its
customers, enabled the company to get a satisfactory rating of 2.45 in IFE.

Finally, upon studying the said factors, both external and internal, the proposed
overall strategic objective for Globe Telecoms will be to gain leadership on the key
areas of the telecommunication industry that offer strong growth potentials namely
mobile data, broadband and the post-paid segment of the industry. The key strategies
that can be implemented are investing on improvement on quality of the said key growth
areas by improving the speed, capacity and reliability of the core network, improve
customer satisfaction by minimizing corporate hierarchy, increase management visibility
and putting clear procedures in dealing with customer issues and finally, training and
hiring new employees with customer service skills.

II. COMPANY INTRODUCTION

Globe Telecoms is a major provider of telecommunication services in the

Philippines, it has a wide array of telecommunication products and services that it offers
to its customers. The company is also one of the pioneers, not just in the Philippines but
also worldwide, of cashless mobile payment and remittance services via its GCash
brand. This wide range of products and services being offered by the company is
supported by a workforce of around 6,200 employees not just in the Philippines but also
overseas, through regional overseas branches and global partners. And also, to
supplement this workforce, Globe Telecoms have over 967,000 networks of different
suppliers, retailers, distributors and business partners all over the Philippines.
 Globe Telecoms also operates one of the biggest and most technologically
advanced telecommunication networks in the Philippines, with services ranging from the
fixed line, wireless and the latest broadband network technologies. As of the latest
annual report of Globe Telecoms, they currently has over 40 million subscribers of
mobile products and services which is roughly around 40 percent of The Philippines
population, and over 2,700,000 subscribers of broadband products and services and
also around 700,000 subscribers of its fixed-line and landline services.

Globe Telecoms is also a recipient of various licenses and service authorizations

from the National Telecommunications Commission that adds to the assets and
goodwill accounts of the company’s balance sheets. Here are a few of the licenses the
company receives.

• License to offer and operate facsimile, other traditional voice and data services
and domestic line service using Very Small Aperture Terminal (VSAT) technology

• License for inter-exchange services

• Certificate of Public Convenience and Necessity (CPCN) for the following:

i. International digital gateway facility (IGF) in Metro Manila

ii. Nationwide digital cellular mobile telephone system under the GSM standard
(CMTSGSM)

iii. Nationwide local exchange carrier (LEC) services after being granted a
provisional authority in June 2005

iv. International cable landing stations located in Nasugbu, Batangas and

Ballesteros, Cagayan 2

1) AREAS OF OPERATIONS AND HEADQUARTERS

The principal headquarters of Globe Telecoms is located at the 32nd Street

corner 7th Avenue, Bonifacio Global City, Taguig, Metro Manila, Philippines. They also
 have various offices, data centers and cell sites located in different city centers and
remote locations all around the Philippines. As of the latest update on the corporate
website, the company has over 6,227 cell sites deployed all around the Philippines.

2) SHAREHOLDERS STRUCTURE

Globe Telecom’s principal controlling shareholders are Ayala Corporation, which

has around 30.4% stake on the company’s common shares, and Singapore
Telecommunications Inc., which owns around 47.2% of the company’s common shares.
The remaining common shares of the company which is roughly around 22.4% is held
by different public investors. Also 100% of the company’s issued preferred shares is
currently owned by Asiacom

Philippines Inc., a subsidiary of Ayala Corporation. Below is a table of the

company’s shareholders structure.

% of % of % of
Stockholders Common Common Preferred Preferred Total Total

Ayala
Corporation 40,351,591 30.40% - - 40,351,591 13.90%

Singtel 62,646,487 47.20% - - 62,646,487 21.50%

Asiacom - - 158,515,021 100% 158,515,021 54.50%

Public 29,732,500 22.40% - - 29,732,500 10.20%

Total 132,730,578 100% 158,515,021 100% 291,248,111 100%

3) MANAGEMENT TEAM

Board of Directors:

Name Position
Jaime Augusto Zobel de Ayala Chairman
Gerardo C. Ablaza, Jr. Co-Vice Chairman
Mark Chong Chin Kok Co-Vice Chairman
Ernest Cu Director, President and
CEO
Delfin L. Lazaro Director
Samba Natarajan Director
Remeo L. Bernardo Director
Fernando Zobel de Ayala Director
Rex Ma. A. Mendoza Independent Director
Manuel A. Pacis Independent Director
Saw Phaik Hwa Independent Director

4) CONGLOMERATE MAP AND SUBSIDIARIES

Below are the conglomerate map of Globe Telecom and the list of their
respective subsidiaries:
  Globe Telecom Inc. – The main corporate entity of the conglomerate. It is
the one that provides mobile telecommunication products and services.
 Innove Communications Inc. – The corporate entity of the conglomerate
that handles all fixed line, broadband, high- speed internet, private data
network services for big enterprise clients and multimedia content delivery
products and services.
 G-Xchange Inc. – The corporate entity of the conglomerate that handles the
mobile commerce and remittance services of the conglomerate under the
GCash brand.
 Entertainment Gateway Group Corp. – The corporate entity of the
conglomerate that handles the development of products and services for
mobile phones and other forms of wireless communication devices. They are
also the one that handles internet and mobile value added services, software
development and information technology related services.
 GTI Business Holdings Inc. – The holding company of the conglomerate
that handles all its overseas holdings and subsidiaries.
 Kickstart Ventures Inc. – The venture capital arm of the conglomerate that
acts as a business incubator for aspiring technopreneurs.
 Asticom Technology Inc., – Formerly known as Ayala Systems Technology
Inc. It is the part of the conglomerate that develops ERP and CRM business
systems, complex integration projects and imaged-based systems for the
company’s business and government clients.

5) MARKETS COVERED

Globe Telecoms Inc. provides the following products and services to its various
business, institutions and individual customers:

 Mobile products and services – These are the products and service that
telecommunication companies offer that enables you to speak, send SMS
and browse, send and receive data to another person or the web using your
mobile phone.
  Fixed line products and services – These are the products and service that
telecommunication companies offer that lets you speak and/or send/receive
data (eg. Photos, music, internet, etc) to another person or the internet using
a handset located on a fixed location.
 Broadband Network Technologies – These are the products and service
that telecommunication companies offer that lets you send/receive data (eg.
Photos, music, internet, etc) on a fixed and/or a mobile location using your
mobile phone or internet device. This service also has higher speed and
bandwidth capabilities compared to mobile data.

6) MARKET POSITION AND MARKET SHARE

As of December 2014, Globe Telecoms has around 44,040,844 mobile

subscribers, 762,181 fixed line subscribers and 2,788,123 broadband subscribers.

7) PRODUCTS AND SERVICES PORTFOLIO

Globe Telecoms offer the following products and services to its customers:

 Mobile Voice - Mobile voice are the service that telecommunication

companies offer that enables you to speak to another person using your
mobile phone.
 SMS - SMS are the service telecommunication that companies offer that
enables you to send text messages to another person using your mobile
phone.
 Mobile Data - Mobile data are the service that telecommunication companies
offer that enables you to send/receive data (eg. Photos, music, internet, etc)
on your mobile phone up to a certain speed.
 Fixed-line Voice - Fixed-line voice are the service that telecommunication
companies offer that lets you speak to another person using a handset
located on a fixed location.
  Fixed-line Data - Fixed-line data are the service that telecommunication
companies offer that lets you send /receive data (eg. Photos, music, internet,
etc) on your computer or mobile devices on a fixed location.
 Broadband - Broadband are the service that telecommunication companies
offer that lets you send/receive data (eg. Photos, music, internet, etc) on a
fixed and/or a mobile location using your mobile phone or internet device.
This service also has higher speed and bandwidth capabilities compared to
mobile data.

8) DISTRIBUTION STRATEGY AND CHANNEL PARTNERS

Globe Telecoms has over 967,000 networks of different suppliers, retailers,

distributors and business partners all over the Philippines. Listed below are the
company’s channel partners that enable them to deliver its products and services
anytime, anywhere:

 Independent Dealers – located all throughout the Philippines to sell and

distribute wireless prepaid services to their own retail network but not directly
to the customers. This network includes major distributors of wireless phone
handsets, direct sales force and sub-dealers.
 Globe Stores – The company has over 211 Globe Stores all over the
Philippines. This is a one stop shop where customers can inquire, pay and
subscribe to all of the company’s products and services except for prepaid
services. This is also where customers can transact remittance services via
the company’s GCash brand.
 Customer Facing Units – The one that is in charge with big individual retail
customers, businesses and voice and roaming needs of the company’s OFW
clients.
 Others – This are the prepaid retailers that varies from convenience and
sari-sari stores, restaurants and even street vendors that enables the
company’s prepaid clients reach products and services of the company
anytime, anywhere.
 III. CORPORATE VISION, MISSION AND CORE VALUES

1) VISION, MISSION STATEMENT & CORE VALUES OF GLOBE TELECOM,

INC.

Vision Statement:

“The happiest customers, employees and shareholders.”

Mission Statement:

“We create a wonderful world for people, business and the nation.”

Core Values:

à We put our customers first

à Our people makes the difference
à We act with integrity
à We care like an owner
à We keep things simple
à To us, it’s be fast or be last

2) EVALUATION OF GLOBE TELECOMS VISION STATEMENT

Globe Telecom’s vision statement focuses on creating a better and wonderful

world to everyone in the Philippines which seems to be quite broad and vivid in a sense
that it does not say what kind of wonderful thing the company wants to provide to the
nation. The said vision statement might be inspirational and changes the way things are
to something better but it seems to be not clear as to what aspiration it wishes to
achieve which might confuse the company’s stakeholders as different shareholders has
a different way and level of what the word wonderful really means to them.

Parameter Yes / No Why

Does it clearly Globe Telecom’s Vision statement is quite vague and vivid in
answer the a sense that they do not say how they are going to make
question: What NO their stakeholders happy. This is quite important because
do we want to different
become? Stakeholders have different wants and levels of happiness.
 In a sense it is inspirational because it provides hope to
Is it concise every stakeholder that Globe Telecoms will make them
enough yet YES happy but it is not concise because the said vision statement
inspirational? does not state how and what kind of happiness the company
will provide to them.

Globe Telecoms Vision statement states that the company

Is it aspirational? YES
will

Does it give clear

indication as to Globe Telecoms does not provide a detailed or even any
NO
when it should be kind of timeline in its vision statement.
attained?

3) EVALUATION OF GLOBE TELECOMS MISSION STATEMENT AND CORE

VALUES

Globe Telecom’s mission statement and core values lack critical components
and do not mention anything about what kind of products and service it will offer to its
customers, kind of technology it will offer, way it wants to treat its employees and way it
will contribute to nation building. The way it delivers its mission statement specifically by
using the word “wonderful” is quite broad.

Parameter Yes / No If yes, which part of the

statement
1. Customers YES People, business and the nation
2. Products & services NO N/A
3. Markets YES The nation
4. Technology NO N/A
5. Concern for survival, growth,
YES We care like an owner
profitability
Our people makes the difference
6. Philosophy YES
To us, it’s be fast or be last
We put our customers first
We act with integrity
7. Self-concept YES
We care like an owner
We keep things simple
8. Concern for employees NO N/A
9. Concern for nation building NO N/A
IV. EXTERNAL ANALYSIS
1) MACRO ENVIRONMENTAL ANALYSIS

These are the external factors that can affect, not just the telecommunication
industry, but all industries in a given country. There are lots of factors that can have
either minimal or huge impact on another given industry but might have minimal impact
on the telecommunication industry. Listed below are the factors that were determined to
have a significant impact on the telecommunication industry in the Philippines.

i. ECONOMIC FACTORS

GROWTH OF THE PHILIPPINES GDP

The Philippines GDP grew by 6.1% in 2014, this rate is lower than the
government’s target for 2014 but this growth rate is still one of the fastest in the Asian
region, next only to china. Below is a table of the key contributors to the Philippines
GDP.
 As seen on the table, the key contributors to the Philippine GDP growth are the
industry sector, more specifically manufacturing and construction, and the service
sector, which led by real estate, renting and business activities. In terms of type of
expenditure, the main contributors to GDP growth are household consumption and
exports.

The Philippine GDP is still forecasted to have one of the strongest growth rate
expansions in the world in the coming years. This strong GDP growth rate is expected
to average around 7% to 8% per year from 2015 until 2018.

RELEVANCE TO THE ENTERPRISE

As the country’s GDP continues to grow, this will create more jobs which will give
more purchasing power to the consumers, which subsequently will enable them to
spend more which will spur the profits of the telecommunication companies. Also,
growth in the Philippine GDP will also spur the growth of new and existing businesses in
the country. And this new businesses will spur the demand for the telecommunication
products and services of the telecommunications industry offer these businesses.
GROWTH OF BUSINESSES IN THE PHILIPPINES SPECIFICALLY THE BPO
INDUSTRY

As the Philippine GDP continues to rise, so does businesses in the country. One
of the key contributor to this grow is the country’s Business Process Outsourcing (BPO)
industry. This industry alone posted a 26% growth in 2014 generating $9 billion in
export earnings for the Philippines. The BPO industry also has a 5% share in the
Philippines GDP. World Bank estimates that this industry is still forecasted to post
strong growth in the future and is expected to give the Philippines future export earnings
of up to $55 billion by 2020.

RELEVANCE TO THE ENTERPRISE

Most of the country’s BPO industry requires various telecommunication services to

enable them to the constantly communicate to their various local and foreign
stakeholders. Growth of this industry will subsequently provide growth in the demand of
telecommunication industry’s products and services.

INTEREST RATES

The Banko Sentral ng Pilipinas (BSP) is keen on keeping interest rates in the
Philippines steady amidst volatile global monetary policies from various foreign central
banks and falling crude oil prices. The monetary board maintains the policy rates for
overnight borrowings at 4% and overnight lending at 6% during its meeting at March 26,
2015.

RELEVANCE TO THE ENTERPRISE

The telecommunications industry is a capital extensive industry; it’s like a utility industry
that invests heavily on various infrastructures nationwide. The key difference is that the
prices of the industry’s products and services are pressured to go down, not like utility
companies. Also, the fast-changing telecommunication technologies are a major factor
that should always be considered. These changes in telecommunication technologies
require further capital to finance the said changes, and subsequent increase/decrease
in interest rate will greatly affect the capital allocation capabilities of the industry.
SOCIAL MEDIA

Social media is widely used in the Philippines, Filipinos lead the world in 2014 in
the amount of time spent connected to the internet for social media. One of the main
reasons for this is that around 11 million Filipinos are living overseas and social media
is their primary means of connecting to their friends and families. Due to this fact,
Facebook.com became the most visited site in the Philippines last June 2014. Also,
there are roughly around 30 million Facebook users in the country last 2013. These
facts made the Philippines the social media capital of the world. Below are the top
reasons why Filipinos use social media.

 75% to connect with friends and families

 70% to meet new people
 65% for fun
 63% to share their new life experiences
 62% for company

RELEVANCE TO THE ENTERPRISE

Being one of the biggest, if not the biggest, country in terms of social media
usage, the telecommunication industry in the Philippines will greatly benefit from this
due to the fact that many of the country’s population is now using the social media
platform to communicate with friends, read news and other related activities. Also
nowadays, businesses are now using social media as a venue for their marketing
campaigns. Growth in social media usage by businesses will greatly increase the
demand for telecommunication products and services most especially internet
connectivity.

ONLINE BANKING AND PAYMENT SERVICES

Payment using cash is still the primary mode of payment but nowadays more and
more banks and other payment companies are slowly utilizing the internet as a mode of
payment and platform to do banking transactions due to the speed and convenience of
doing transactions online. Also, due to the rise in e-commerce, more and more Filipinos
are expected to utilize cashless financial transactions online. Below are the lists of
banks in the Philippines which offer online banking.

RELEVANCE TO THE ENTERPRISE

Cash may still be king in the Philippines but with the worldwide trend shifting to
cashless transactions being made online and with new online security technology being
developed, this medium might be a good contributor to future profits for the
telecommunication industry as the technology needed for doing online transaction is
provided by the country’s telecommunication companies.

NTC MEMORANDUM CIRCULAR NO. 02-10-2011

The National Telecommunications Commission (NTC) Memorandum Circular No.

02- 10-2011 deals with the refund order of NTC to telecommunication players in the
Philippines for the alleged excessive charges they imposed on the prices of their SMS
services to their customers. The said Memorandum Circulars orders the
telecommunication companies to refund their subscribers Php0.20 to Php0.15 per SMS
and they will also receive a fine of Php200 per day until they complied with the said
refund. The top telecommunication companies filed a temporary restraining order for the
said Memorandum Circular to the Supreme Court and currently awaiting final decision
from the latter if the said Memorandum Circular is valid.

RELEVANCE TO THE ENTERPRISE

If this Memorandum Circular will be considered by the Supreme Court as valid,

this will definitely add to the cost of all telecommunication players in the Philippines.
Estimates in 2010 alone shows that almost around 20 million text messages were sent
daily which would translate to a Php4 million per day refund and would subsequently
add up to a total of Php1.42 billion refund for the telecommunication companies
since the said Memorandum Circular took into effect.

ii. ENVIRONMENTAL FACTORS

TYPHOON, EARTHQUAKE AND VOLANIC RELATED RISKS

Natural disasters are common in the Philippines; every year more than 20
typhoons visit the country. The World Wildlife Fund for Nature states that the Philippines
ranks 3rd in the world for the most vulnerable countries due to climate change. And not
only that, the country is also within the Pacific Rim of Fire which makes it vulnerable to
earthquakes and volcanic eruptions as the country have around 23 active volcanoes.
The World Bank estimates that the cost of the said natural disasters to the Philippine
economy every year is around 2.7% of the country’s GDP.38

RELEVANCE TO THE ENTERPRISE

The Philippines is prone to strong typhoons most especially now that the issue
on climate change predicts stronger typhoons in the coming years and the country is
within the pacific rim of fire which greatly increases the possibility of earthquakes and
volcanic disasters to occur. The said disasters might greatly affect the
telecommunication companies if they occur as the infrastructures and equipment of the
industry players are scattered all around the country. Destruction and impairment of the
said equipment might add up to cost of doing business for the telecommunications
industry.

iii. TECHNOLOGICAL FACTORS

NEW FIBER OPTIC AND BROADBAND RELATED TECHNOLOGIES

These are new technologies or upgrades of former technologies that are being
tested by various equipment suppliers of the telecommunication industry that has the
capability to enhance the reliability and speed capacity of the current fiber optic and
broadband infrastructure of telecommunication companies. Technologies such as fiber-
to-the-curb, broadband-over-power-lines and DWDM technologies are currently being
developed or upgraded in order to meet the growing demand for speed and capacity of
internet connectivity.

RELEVANCE TO THE ENTERPRISE

 These new technologies being developed for the telecommunication industry are
positive signs for the telecommunication industry in the Philippines as these can be a
source of future growth for telecommunication companies in the country. These new
technologies like upgrades in the DWDM technology and fiber-to-the-curb can solve
capacity and speed issues for telecommunication companies and technologies like
broadband-over-power-lines can help bring internet to remote areas even without the
use of cellsites and frequencies. The only downside for the said technologies is that
they will require additional funds to be invested before being rolled out by
telecommunication companies.

NEW SMARTPHONES AND MOBILE INTERNET GADGETS

The number of mobile phones in the Philippines is increasing steadily. In 2013

the number is at 108 million, a 58.7% increase from its 2008 levels. Due to the
increasing demand for mobile internet connectivity and the ongoing network upgrades
of the top telecommunication players in the country, mobile phone subscription is still
expected to pose a strong growth in the future. Also, the availability of flexible financing
schemes from various banks and credit card companies will further fuel the growth in
mobile phones in the country.

RELEVANCE TO THE ENTERPRISE

This is a positive development for the telecommunication industry in the

Philippines as a growth in number of mobile phones in the country will subsequently
translate to growth in mobile phone subscribers for the telecommunication industry as
the said industry is the only industry that is capable to provide the service needed by the
said mobile phone users.

4G, LTE AND 5G TECHNOLOGIES

With the demand for capacity and internet speed growing, various new
technologies are being developed my telecommunication equipment suppliers to
support the forecasted growth in the demand for telecommunication products and
service and also to remedy the different issues current telecommunication technologies
have. One of the technologies that are being developed are the so called 5G
technologies or LTE Advanced (LTE-A). Below is a speed comparison of the current
telecommunication technologies against LTE-A.

RELEVANCE TO THE ENTERPRISE

As the demand for internet speed and capacity in the telecommunication industry
grows, new telecommunication technologies are needed to support the increase. This is
a good sign not just for Globe Telecoms but for the whole telecommunication industry
as this can be potentially a good source of future revenues for the industry, given that
the current major sources of revenues are already slowing down. On the other hand,
this can also be a source of new cost for industry players, if not managed well, due to
the new equipments that are needed in order to upgrade the telecommunication
industry’s current infrastructures.

CYBERATTACKS FROM HACKERS

Globe Telecoms and other telecommunication players are prone to various

hacking and cyberattacks which might disrupt the normal business operations of the
company. A perfect example of this cyberattack is done by hackers to the company’s
website last November 2014. Investigation and cyber security improvement are
currently being performed by the company in order to avoid the said incident from
happening again in the future.

RELEVANCE TO THE ENTERPRISE

Cybersecurity is a big issue nowadays not just for the telecommunication industry
but to all businesses that utilizes the cyberspace for their normal business operation.
Putting up a cybersecurity system for a company can add up to cost and cyberattacks
can greatly impact the normal business operations of companies that can lead to
decline in productivity and subsequently, in revenues.

2) INDUSTRY AND COMPETITOR ANALYSIS

 Globe Telecoms belong to the telecommunication industry. The
telecommunications Industry is a highly regulated industry due to limited resources
telecommunication players can use and the various local and national government
requirement needed to enter the industry. The Telecommunication industry in the
Philippines is further divided into 3 major segments which are Mobile, Fixed-line and
Broadband. Globe Telecoms is a major player in all 3 segments of the
telecommunication industry.

The major brands for the mobile segment of the telecommunication industry in
the Philippines are Globe Telecoms and Smart Communication.

The major brands for the fixed-line segment of the telecommunication industry in
the Philippines are PLDT, Globe Telecoms and Bayantel. The major brands for the
broadband segment of the telecommunication industry in the Philippines are Smart, Sun
Cellular (Digitel), Globe Telecoms and Wi-Tribe (Liberty Telecoms).

Globe Telecoms gets most of its revenues from the mobile segment of the
telecommunication industry. The majority of its customers are from the high-income
section of the mobile segment. This can be seen by the fact that Globe Telecoms has
cornered the biggest chunk the lucrative postpaid segment of the wireless division of the
telecommunications industry.

iv. PORTER’S FIVE FORCES

SUMMARY OF PORTER’S FIVE FORCES ANALYSIS

Force Conclusion
1. Rivalry of Competition Weak
2. Threats from New Entrants Weak
3. Bargaining Power of Suppliers Moderate
4. Bargaining Power of Buyers Weak
5. Threats from Substitutes Weak

1. RIVALRY OF COMPETITION: RATING = WEAK

 The rivalry between the telecommunication industry players in the Philippines is
weak, even if they tend to show in the media that they are bitterly fighting for market
share. Here are few of the factors that lead to this conclusion. First, the number of
players in the industry is too few and they are decreasing, the trend is that smaller
companies are being taken over by larger companies as can be seen by the merger of
Digitel to the PLDT group in 201148 and the ongoing acquisition of Bayantel by Globe
Telecoms.49 Also, the market share is concentrated to just the top 2 biggest players.
They also have the majority of the industry’s subscribers.

It is also important to note that price trend is decreasing but not due to
competition but due to government regulatory pressures. Also, the top two main
competing companies are almost equal in sizes and their capability of delivered
products and services are almost equal.

In terms of the demand for the products and services of the industry, demand is
growing on both the broadband and wireless segment but declining on the fixed-line due
to substitute products. Price-cutting is also rare but packaging of products and services
are common. Consumers switching cost are low but consumer has very few choices
aside from the top 2 companies. No actual products are being manufactured so the risk
on perishable goods in the industry low but the industry has a high depreciation cost
due to the fast- changing technologies in the industry.

Leaving the industry is also low due to no other substitute industry is capable of
delivering the products and services offered by the telecommunication industry. Also,
fixed costs are high in the telecommunication industry, which as high as utility
companies, which makes it harder for new players to enter the industry.

In summary, The rivalry of competition on the telecommunication industry is

weak in a sense that only few players really survive and the small players gets eaten up
by the larger companies. Even if the top 2 big companies in the industry may have bitter
price wars, the competition remains just between the 2 of them.

2. THREAT FROM NEW ENTRANTS: RATING = WEAK

 Entering the telecommunication industry in the Philippines is quite hard due to a
myriad of reasons. One of the reasons why it’s hard to enter the said industry is that
technology and specialized know-how to become a player in the telecommunication
industry is highly specialized, costly and changes frequently, which increases the fixed
cost for industry players and decreases the potential entry of new players. Technical
and legal experience and expertise is also important in the industry with various laws
and regulations imposed on it. Another barrier for entering the telecommunication
industry in the country is that the big players in the telecommunication industry already
have significant market share and customer loyalty. Brand preference already sits with
the two big telecommunication players.

Another significant reason for the difficulty of entering the telecommunications

industry in the country is the large capital requirement needed to enter the
telecommunication industry which is as big as that of the utility industry. Also, the
telecommunication industry is an industry highly regulated by the government due to
limited resources and various governmental laws to comply with before starting one.
Tariffs is also a big factor for new players in the industry, various tariffs are needed to
be paid to the local and national government in this industry. Telecommunication
companies also need various licenses before they can operate and use the limited
available frequencies for their business operations and most of the big companies
already held the licenses for the said resources.

Another barrier for entry of new players is that the big telecommunication players
already have strong marketing resources and distribution channels that enable them to
get the large chunk of market share which is one of the challenges new players in the
country encounters.

3. BARGAINING POWER OF SUPPLIERS: RATING = MODERATE

With different and fast-changing technologies in the telecommunication industry,

industry players rely a lot to its suppliers. They get only suppliers that have a high
degree of technical know-how on technologies they need. The said suppliers also
provide technical manpower and consultants to telecommunication companies to teach
their employees on how to operate their respective equipments.

The suppliers in the telecommunication industry vary with different technologies.

These suppliers are broken down to mobile, fixed-line and broadband equipment
suppliers. Almost all of the industry’s equipment suppliers are foreign companies. Due
to the highly technical equipments supplied by the said suppliers, there are mostly no
substitute materials for this equipment. But there are also a significant number of these
suppliers, which enables telecommunication companies in the Philippines to get good
rates from them.

It is also important to note that telecommunication companies in the Philippines

often buy in bulk orders of equipments and often comes with labor from suppliers so the
cost of switching raw materials is costly. Pricing & payment terms from suppliers are
also flexible and often telecommunication companies can bargain and get good terms
due to bulk orders and the limited number of telecommunication companies operating in
the Philippines.

Backward integration is not a common practice in the Philippines

telecommunication industry due to that fact that most of the industry suppliers are highly
technical companies with high levels of Research and Development and the said
suppliers are also big multinational companies that is sometimes even bigger in size
than local telecommunication companies.

4. BARGAINING POWER OF BUYERS: RATING = WEAK

Most, if not all of the Philippine population uses the products and services of the
telecommunication industry. The major buyer groups in the country are individual,
businesses and government institutions. Nowadays, everyone needs to communicate
and connect to the internet for various reasons. This makes the products and services
of the telecommunication industry a necessity. These factors show how large a group of
customers are available for the telecommunications industry, but due to limited number
of industry players, buyers do not have that much of a bargaining power.
The telecommunication industry in the Philippines has concentration of market share,
where the market shares are held by 2 biggest players that has the majority of the
industry’s subscribers. Products and services of the telecommunication industry are
undifferentiated. But with limited industry players, customers do not have much
bargaining power.

Also, brand loyalty is high mainly due to limited choices. It is also one of the
reasons why the government regulates this industry. Reduction in prices of the products
and services of the industry is also not common and oftentimes government intervention
is needed to impose price reductions on the industry.

5. THREAT FROM SUBSTITUTES: RATING = WEAK

Market share and subscribers of the telecommunication industry in the

Philippines is quite concentrated to few big players. There might be substitute
technologies and price pressures for the products and service of the telecommunication
industry but at the end of the day, the products and services needed to support the said
substitutes still needs other products and services that only the telecommunication
industry provides (e.g. online free calls still uses the internet). This market phenomenon
is called market cannibalism. Marketing aggressiveness between the big
telecommunication players is quite aggressive. But with few market players, it’s just a
game of who gets more subscribers of the 2 big players. The capacity expansion plans
of each of the big players are aggressive mainly due to the upward demand for faster
speeds and limited players who offer the said services.

CONCLUSION

The telecommunications Industry in the Philippines is still a very profitable

industry, once you have gained a firm foothold and presence. Even though profits are
slowing down and even falling for some, it is still a very lucrative industry due to low
number of competition, difficulty of entering the said industry, weak bargaining power of
customers and no other available substitute for industry, most especially now that that
its products and services of the telecommunications industry are becoming an everyday
necessity.
 Potential for substitutes is an area in which Globe Telecoms could look into to
build a sustainable competitive advantage. They should be able to be the first one to
take advantage of new technologies in the telecommunication industry that can
potentially become a replacement of the existing technologies in the future and at the
same time satisfy the needs of its current customers by giving them what they really
need. In the event that the company would not be able to exploit this competitive
advantage, they might face possible obsolescent and decrease in profits. A good
example of this the fixed-line segment of the telecommunications industry which was
made obsolete by the growth of the wireless and broadband segment.56

Globe Telecoms should stay in the telecommunications industry in the country as

they already have a good presence and market share in the said industry. And also the
industry still has lots of potential for new avenues of growth.

MARKET SEGMENTATION BY SUBSCRIBER CONSUMPTION (ARPU)

This market segmentation classifies customers by means of their average

monthly consumption or average revenue per user (ARPU). The customers are divided
into upper segment, or subscribers (whether business of individual) that consumes
Php500 and above, middle segment, or subscribers (whether business of individual)
that consumes Php100 up to Php500, and the lower segment, or subscribers (whether
business of individual) that consumes Php100 below.

MARKET SEGMENTATION BY MODE OF PAYMENT

This market segmentation classifies customers by manner of payment the

utilized when they avail of the products and services of the telecommunication industry.
This segmentation divides the customers into the prepaid and postpaid segments. The
prepaid segment is the segment of the telecommunication company wherein the
customers pays the products and services it use via prepaid mediums such as call
cards or autoload stations. This is also the segment wherein the low and the lower-
middle income subscribers of the industry belongs to. On the other hand, the postpaid
segment is where most high-income and businesses belongs to. It is the segment
wherein subscribers pay the products and services it use via monthly, quarterly or
sometimes yearly, whether businesses or individuals.

KEY BRANDS AND PRICING STRATEGY OF KEY PLAYERS

The pricing in the telecommunication industry in the Philippines is regulated by

the government. This leaves little room for industry players to increase prices. To
remedy this, the top players in the telecommunication industry resort to promos to
differentiate the pricing of its products and services to its customers. Below is a table of
price of the products and services of the telecommunication industry in the Philippines.

1. GLOBE TELECOMS

Key Brands

• Globe Postpaid
• Globe Prepaid
• TM
• GCash
• Globelines
• Globe Business
• Tattoo

Pricing Strategy

Globe Telecom’s pricing strategy is customized pricing wherein each subscriber

can choose what specific products and service mix and they really need. Even the
company’s postpaid segment is now customizable to the actual needs of each
subscriber. The company’s price level on its postpaid plans is still the highest in the
industry. But they compensate this by providing the latest gadgets and more freebies,
depending on the plan the said subscriber gets, when they avail of their postpaid plans.
That factor and the customizable and flexible plans make up the said price premium.

For the prepaid segment, prices are at par with the largest competitor which is Smart
but Globe Telecoms, like on its postpaid promos, also offer more flexibility on its prepaid
promos.

The key for Globe Telecoms is to gain more subscribers from the B, C and D segment
of the industry which is dominated by their key competitors. And the most important of
all, they should be able to sustain the quality and reliability of the customized products
in order to protect their brand and increase customer satisfaction.

2. PLDT

Key Brands

• Smart Prepaid
• Talk 'N Text
• Smart Postpaid
• Smart Infinity
• SmartBro
• Sun Cellular Prepaid
• Sun Cellular Postpaid
• Sun Broadband

Pricing Strategy

PLDT’s main pricing strategy is called ‘bucket plan’, wherein unlimited voice, text
or data services are packaged alone or together with other services on a specific time-
frame. They are also sector specific with the Talk ‘N Text and Sun Cellular Prepaid
brand targeting the C and D market, While Smart prepaid and both Smart and Sun
Cellular postpaid brand targeting the B market while smart infinity targets the A market.
Also PLDT’s Sun Cellular brand is the pioneer in industry when it comes to unlimited
promos, which is the main pricing strategy for the said brand.
 PLDT’s price level is in the middle and lower end of pricing in the
telecommunication industry. This is justified given the fact that PLDT has the largest
subscriber share in the industry. Also, their price for the high-income bracket is cheaper
compared to the price of Globe Telecoms but the latter offers more promos and
privileges compared to the former. It is also worth noting that even though all
telecommunication players now offers unlimited call and text promos, Digitel’s price on
their unlimited call, text and internet service on their prepaid, postpaid and broadband
plans are still the lowest in the industry.

MARKETING AND PROMOTIONS STRATEGY OF KEY PLAYERS THE INDUSTRY

1. GLOBE TELECOMS

Marketing and promotions took up roughly around 19% of Globe Telecom’s

operating expenses in 2014 which is around Php8 billion. This is done in order to
acquire and retain customers and gain market share, to build on their brand and to
defend from competition.

Due to the company’s wide range of customers, which comprises almost all
segments of the society, Globe Telecoms employs mass marketing. The company
prefers traditional above the line marketing strategies. The most common mediums are
TV commercials, sponsorships and partnership with radio and TV shows, which enables
the company to have a nation-wide reach. They also utilize billboards and flier at high-
traffic areas and malls.

They also employs below the line marketing by partnering with various foreign
and local events held in the Philippines and providing perks and privileges to its loyal
customers mostly in the postpaid segment.

2. PLDT

Telecommunication companies are one of the biggest spenders in

advertisements and just like Globe Telecoms, advertisement and promotions is one of
the biggest costs for PLDT which amounted to around Php10.62 billion which is roughly
around 10.7% of its operating costs in 2014. Also, just like Globe Telecoms, PLDT also
prefer traditional above the line marketing. Wide reaching mediums like TV and radio
advertisements, billboards and fliers and partnerships with various local and foreign
events being held in the Philippines. The only significant difference is that PLDT’s target
market focuses mostly on the middle and lower segment of the industry.

V. STRATEGY FORMULATION

1) STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS (SWOT) MATRIX

STRENGTH OPPORTUNITY STRATEGIES

STRENGTHS
S1: Prestigious Brand Name
S2: Large Postpaid Market Share
S3: Complete Product & Service Portfolio
Under One Brand and Company
S4: Modern Products and Services
OPPORTUNITIES
O1: Growth of the country's BPO and
business sector due to GDP growth
O2: Current finance environment suitable
for investments
O3: E-commerce Growth
O4: Duopoly with no substitute
industry O5: Strong Growth in the
upper income segment
O6: Growth on demand and
development of new technologies in
broadband

à SO1: Globe can create flexible product mix that can fit the different needs of growing
businesses. (S1, S3, S4, O1, O3, O5 and O6)
à SO2: Globe can leverage more its brand to get the best loan terms to lenders to be
able to invest on key growth areas of the industry. (S1, S2, O2 and O4)
à SO3: Globe can offer more shares to the public via PSE to fund its investments on
better quality of segments with future strong growth potential. (S1, S2, O2 and O4)
à SO4: Globe can invest more on better service quality and customer retention
programs to attract more customers from the strong upper income segment growth.
(S1, S2, S3, S4, O2, O5)
à SO5: Globe can tap banks and other financial market and use its brand reputation to
get good rates to refinance its loans and improve the company’s financial position.
(S1, S2, O2 and O4)
à SO6: Globe can create new product mix that specifically targets the upper income
segment of the industry. (S1, S2, O2 and O4)
à S07: Globe can invest on marketing and promos to get more share of the high
growing upper income segment (S1, S2, S3, S4, O2, O4 and O6).
à SO8: Globe can invest on developing new broadband products to get more market
share of the growing broadband segment (S1, S2, S3, S4, O2, O4 and O6).

STRENGTH THREAT STRATEGIES

STRENGTHS
S1: Prestigious Brand Name
S2: Large Postpaid Market Share
S3: Complete Product & Service Portfolio
Under One Brand and Company
S4: Modern Products and Services
THREATS
T1: Calamity related risks
T2: Growth of cheap voice and data
messaging Apps
T3: Ongoing senate inquiry and legal
proceedings against the industry
T4: Saturation of major product
revenues streams
T5: Decline in the prepaid segment

à ST1: Globe can shift its marketing and investment focus more from mobile voice and
SMS to mobile and broadband internet. (S1, S2, S3, S4, T2, T3 and T4)
à ST2: Globe can put better programs for subscriber retentions for its postpaid
subscribers to minimize the impact of the declining prepaid segment to its bottom-
line.(S1, S2, T4 and T5)
à ST3: Globe can take advantage of its modern and complete product portfolio to
interoperate and create back-up technologies once calamities hit and therefore
minimize the impact to its costs. Eg: using the mobile network to be a back-up for
fixed-line or broadband if the latter goes down and vice versa. (S3, S4 and T1)
à ST4: Globe must not look at the ongoing senate inquiry as a threat but as a medium
in which the company can voice out and expose its concerns to lawmakers about
 various red tapes and bureaucracy in the local and national government that hinders
the company to provide better services to its customers. (S1 and T3)
à ST5: Globe can put better promos for its postpaid subscribers to minimize the impact
of the declining prepaid segment to its bottom-line.(S1, S2, T4 and T5).
à ST6: Globe can invest more on developing over-the-top (OTT) technologies to be
able to enter the mobile apps and digital market industry (S1, S2, S3, S4, T2 and T4)

WEAKNESS OPPORTUNITY STRATEGIES

WEAKNESSES
W1: Smaller network infrastructure
Compared to Key Competitor
W2: Smaller Resources Compared to
Key Competitor
W3: Poor Customer Satisfaction due to
lack of customer service skills of
employees
W4: Poor Network Reliability
W5: High Level of Debt
W6: Current Limited Number of Key
Suppliers
OPPORTUNITIES
O1: Growth of the country's BPO and
business sector due to GDP growth
O2: Current finance environment suitable
for investments
O3: E-commerce Growth
O4: Duopoly with no substitute industry
O5: Strong Growth in the upper income
segment O6: Growth on demand and
development of new technologies in
broadband

à WO1: Globe can retain more revenues from the strong postpaid segment, wherein
they are the leading player, and other strong growth areas and put the said revenues
to be invested to develop its network infrastructure. (W1, W2, W5, O1, O3, O4, O5
and O6)
à WO2: Globe can get strategic partners that have good resources to in invest in the
company to strengthen Globe’s resources to be able to invest more to improve its
network infrastructure, network reliability and subsequently customer satisfaction.
(W1, W2, W3, W4, W5, O2 and O4)
à WO3: Globe can tap the country’s financial markets to refinance its high interest
bearing loans and obligations given the country’s current good investment
environment to improve the company’s financial position. (W2, W5 and O2)
à WO4: Globe can tap the country’s financial markets to get resources to improve its
network reliability. (W1, W2, W3, W4, O1, O2, O3, O4, O5 and O6)
à WO5: Globe can also utilize other suppliers of its products and services instead of
the current focused number of suppliers to minimize the company’s risk of over-
reliance to a small number of suppliers. (W6, O2 and O4)
à WO6: Globe can tap the country’s financial markets to get resources to invest in
segment of the industry with strong future growth potentials. (W1, W2, W3, W4, O1,
O2, O3, O4, O5 and O6)
à WO7: Globe can tap the country’s financial markets to get resources to hire people
and train its employees to have better customer service skills and to be customer
centric. (W1, W2, W3, W4, O1, O2, O3, O4, O5 and O6)

WEAKNESS THREAT STRATEGIES

WEAKNESSES
W1: Smaller network infrastructure
Compared to Key Competitor
W2: Smaller Resources Compared to
Key Competitor
W3: Poor Customer Satisfaction due to
lack of customer service skills of
employees
W4: Poor Network Reliability
W5: High Level of Debt
W6: Current Limited Number of Key
Suppliers
THREATS
T1: Calamity related risks
T2: Growth of cheap voice and data
messaging Apps
T3: Ongoing senate inquiry and legal
proceedings against the industry
T4: Saturation of major product revenues
streams T5: Decline in the prepaid segment

à WT1: Globe can partner with smaller industry players to have them as backup if
calamities brings Globes network down. (W1, W2, W3, W4, W5 and T1)
à WT2: Globe can effectively allocate more resources to key growth areas, cut on
unnecessary costs and make its cash flow more efficient to minimize the impact on
profits of substitute cheap voice and data Apps and saturation of major revenue
streams. (W2, W5, T2, T4 and T5)
à WT3: Globe can improve customer support and marketing by in-house trainings,
managerial focus and support to make the business more efficient and increase
customer satisfaction and at the same time on cost. (W2, W3, T2, T4 and T5)
à WT4: Globe can utilize the current senate hearings as a medium to expose to the
lawmakers unnecessary costs incurred by the company due to redtapes and
bureaucracy. (W2, W3, W4, W5, T3, T4 and T5)
à WT5: Globe can also include contingencies in its budget if current cases filed to the
company might materialize and add to the company’s expenses. (W2, W5, T3, T4
and T5)
à WT6: Globe can get more suppliers that can offer better rates to minimize its
dependence to a limited number of suppliers. (W2, W5, W6, T2, T4 and T5)

GROUPING OF SWOT STRATEGIES

Market Penetration Strategies

SO1: Globe can create flexible product mix that can fit the different needs of growing
businesses. (S1, S3, S4, O1, O3, O5 and O6)

SO2: Globe can leverage more its brand to get the best loan terms to lenders to be able
to invest on key growth areas of the industry. (S1, S2, O2 and O4)

SO3: Globe can offer more shares to the public via PSE to fund its investments on
better quality of segments with future strong growth potential. (S1, S2, O2 and O4)

SO4: Globe can invest more on better service quality and customer retention programs
to attract more customers from the strong upper income segment growth. (S1, S2, S3,
S4, O2, O5)

SO6: Globe can create new product mix that specifically targets the upper income
segment of the industry. (S1, S2, O2 and O4)

S07: Globe can invest on marketing and promos to get more share of the high growing
upper income segment (S1, S2, S3, S4, O2, O4 and O6).

ST1: Globe can shift its marketing and investment focus more from mobile voice and
SMS to mobile and broadband internet. (S1, S2, S3, S4, T2, T3 and T4)
ST2: Globe can put better programs for subscriber retentions for its postpaid
subscribers to minimize the impact of the declining prepaid segment to its bottom-line.
(S1, S2, T4 and T5)

ST5: Globe can put better promos for its postpaid subscribers to minimize the impact of
the declining prepaid segment to its bottom-line.(S1, S2, T4 and T5).

WO6: Globe can tap the country’s financial markets to get resources to invest in
segment of the industry with strong future growth potentials. (W1, W2, W3, W4, O1, O2,
O3, O4, O5 and O6)

WO7: Globe can tap the country’s financial markets to get resources to hire people and
train its employees to have better customer service skills and to be customer centric.
(W1, W2, W3, W4, O1, O2, O3, O4, O5 and O6)

WT3: Globe can improve customer support and marketing by in-house trainings,
managerial focus and support to make the business more efficient and increase
customer satisfaction and at the same time on cost. (W2, W3, T2, T4 and T5)

Product Development Strategies

SO8: Globe can invest on developing new broadband products to get more market
share of the growing broadband segment (S1, S2, S3, S4, O2, O4 and O6).

ST3: Globe can take advantage of its modern and complete product portfolio to
interoperate and create back-up technologies once calamities hit and therefore
minimize the impact to its costs. Eg: using the mobile network to be a back-up for fixed-
line or broadband if the latter goes down and vice versa. (S3, S4 and T1)

WO1: Globe can retain more revenues from the strong postpaid segment, wherein they
are the leading player, and other strong growth areas and put the said revenues to be
invested to develop its network infrastructure. (W1, W2, W5, O1, O3, O4, O5 and O6)

WO2: Globe can get strategic partners that have good resources to in invest in the
company to strengthen Globe’s resources to be able to invest more to improve its
network infrastructure, network reliability and subsequently customer satisfaction. (W1,
W2, W3, W4, W5, O2 and O4)

WO4: Globe can tap the country’s financial markets to get resources to improve its
network reliability. (W1, W2, W3, W4, O1, O2, O3, O4, O5 and O6)

ST6: Globe can invest more on developing over-the-top (OTT) technologies to be able
to enter the mobile apps and digital market industry (S1, S2, S3, S4, T2 and T4)

Cost Management Strategies

SO5: Globe can tap banks and other financial market and use its brand reputation to get
good rates to refinance its loans and improve the company’s financial position. (S1, S2,
O2 and O4)

ST4: Globe must not look at the ongoing senate inquiry as a threat but as a medium in
which the company can voice out and expose its concerns to lawmakers about various
red tapes and bureaucracy in the local and national government that hinders the
company to provide better services to its customers. (S1 and T3)

WO3: Globe can tap the country’s financial markets to refinance its high interest bearing
loans and obligations given the country’s current good investment environment to
improve the company’s financial position. (W2, W5 and O2)

WT2: Globe can effectively allocate more resources to key growth areas, cut on
unnecessary costs and make its cash flow more efficient to minimize the impact on
profits of substitute cheap voice and data Apps and saturation of major revenue
streams. (W2, W5, T2, T4 and T5)

WT4: Globe can utilize the current senate hearings as a medium to expose to the
lawmakers unnecessary costs incurred by the company due to redtapes and
bureaucracy. (W2, W3, W4, W5, T3, T4 and T5)

WT5: Globe can also include contingencies in its budget if current cases filed to the
company might materialize and add to the company’s expenses. (W2, W5, T3, T4 and
T5)
 Horizontal Integration Strategies

WO5: Globe can also utilize other suppliers of its products and services instead of the
current focused number of suppliers to minimize the company’s risk of over-reliance to a
small number of suppliers. (W6, O2 and O4)

WT1: Globe can partner with smaller industry players to have them as backup if
calamities brings Globes network down. (W1, W2, W3, W4, W5 and T1)

WT6: Globe can get more suppliers that can offer better rates to minimize its
dependence to a limited number of suppliers. (W2, W5, W6, T2, T4 and T5)

VI. CORPORATE OBJECTIVES, STRATEGIES, RECOMMENDATION AND ACTION

PLAN

1) RECOMMENDED COMPANY VISION STATEMENT

“To be the best and most-trusted telecommunications company that the nation
ever had by enhancing all its stakeholder’s lives by providing them the things that will
make them happy through technology in the span of 5 years together with the country’s
progress.”

PARAMETER Yes / No Why

Does it clearly answer the
question: What do we
want to become?
Is it concise enough yet
inspirational?
Globe Telecom’s new Vision statement now clearly
states that the company wants to be the best and
most-trusted telecommunications company by being
a vehicle that enhances all its stakeholders lives and
YES
make them happy through its core competency
which is technology
Globe Telecom’s new Vision statement now clearly
states what kind of medium it will use to be the best
YES
and most-
trusted brand that enhances people’s life which is
 technology.
Globe Telecom’s new Vision statement now states
that it wants to enhance all its stakeholder's lives in
Is it aspirational?
YES parallel will the improving business environment of
the country.
Does it give clear indication Globe Telecom’s new Vision statement now has a
as to when it should be timeframe which is 5 years which is also in parallel
YES
attained? with the current high growth rate of the country.

2) RECOMMENDED COMPANY MISSION STATEMENT

“We will make our nation wonderful by providing to our customers advance and
reliable telecommunication technologies that can enhance their everyday lives and at
the same time create a culture of integrity, adaptability, and performance based merit
system like how a good employer should and care for the business just like how an
owner would.”

Parameter Yes / No If yes, which part of the statement

1. Customers YES The nation

2. Products & services Advance and reliable telecommunication

YES technologies
3. Markets YES Telecommunication industry
4. Technology YES Advanced telecommunication technologies

5. Concern for survival, Care for the business like an owner would
growth, profitability YES

6. Philosophy Culture of integrity, adaptability and

YES performance based merit system.

7. Self-concept YES Provider of advance telecommunication

technologies

8. Concern for YES Performance based merit

employees

9. Concern for nation YES Making the nation wonderful by providing

building advance telecommunication technologies
3) RECOMMENDED STRATEGIC OBJECTIVES

Base on the results of the analysis done regarding the company and the
telecommunication industry, Globe Telecoms should focus on improving its customer
satisfaction and quality of the products and services it provides to its customers in order
to gain more subscribers and market share and subsequently, gain market leadership in
areas that offer strong growth potentials in the future.

Corporate Strategic Objectives: To gain market leadership in key areas of the

telecommunication industry that offer strong growth potentials in the future. This will
subsequently translate to a CAGR of 13% in sales revenues or Php156 billion in annual
sales revenues by 2018.

In order to reach total annual sales revenue of Php156 billion by 2018, Globe
Telecoms must be able to gain market leadership in areas of the telecommunication
industry in the Philippines that has strong future growth potentials. The areas of focus
identified are mobile data, broadband and the postpaid segments of the industry. This
should be done while not neglecting the current major revenue drivers of the company
namely its mobile voice and SMS segments.

Globe Telecoms must be able to sustain and even surpass its current strong
growth, even if the current major sources of revenues in the telecommunication industry
in the Philippines are already in its saturation phase. In order to do this, the company
should be able to gain a leadership in the key areas that offer strong growth potentials
in the future namely the mobile data, broadband and the postpaid segments of the
industry. They may also follow the best practices the other top telecommunication
players in other ASEAN countries, especially Singapore, to gain leadership in key
growth areas of the industry.

Functional Strategic Objectives (Marketing): To get a total industry market share

of 40.61% in 2015, 44.77% in 2016, 50% in 2017 and 54.79% in 2018. This can be
done by getting more high revenue subscribers in the postpaid segments and also
getting the market leadership, in terms of subscribers, in the mobile data and broadband
segment of the industry. The target is to get a 25% growth in number of postpaid
subscribers and a 20% growth in total subscribers by 2018 while lowering the postpaid
and prepaid churn rate to below 1% and 2% respectively.

In to gain market leadership in key strong areas by 2018, Globe Telecoms must
be able to attract more subscribers, especially high-income subscribers, in the future
strong growth segments of the industry namely mobile data, broadband and the
postpaid segment, and at the same time retain and get more subscribers to switch from
the current high income generating segments. They may also follow the best practices
the other top telecommunication players in other ASEAN countries, especially
Singapore, to improve customer satisfaction which will lower the company’s churn rate
and also attract more subscribers especially in key growth areas of the industry.

Functional Strategic Objectives (People): Globe Telecoms must improve on its

customer satisfaction and technical expertise in dealing with network reliability issues by
having more customer service and technical training to all its employees, hire new
employees with good customer service expertise, lower its corporate hierarchy by at
least 1 level for better upper management visibility, creating a clear escalation
procedures and complaint prioritization and easy and user-friendly survey and feedback
forms and procedures that is regularly reviewed by top management and tied to each
employee’s KPI.

In order to attract more customers, especially the high income subscribers, Globe
Telecoms must improve its customer satisfaction by a mixture of better customer
service and reliable network. This can be achieve by better technical and customer
service quality of its staff and better upper management visibility of what is happening
on the ground to make decision making faster and more efficient.

Also, a clear escalation, complaint prioritization, and an easy and user-friendly

survey and feedback forms and procedures that is regularly reviewed by top
management and tied to each employee’s KPI should be created to be able to regularly
track the actual concerns of the customers, most especially high-income customers
from the postpaid segment. They may also hire consultants from Singtel that can train
the company’s employees about their best practices in their company.

4) RECOMMENDED STRATEGIES

Strategy #1: Market Penetration: Globe can tap the country’s financial markets to get
resources to invest in segment of the industry with strong future growth potentials.

Globe Telecoms can tap the current good financial environment to invest on
improvement of the key areas of its business where there is a good potential for growth
in the future. This will not only minimize the impact of declining revenues from its current
key segments but also can be a good source of future revenues for the company. The
key is not to focus anymore on expensive cellsites, tower and facility construction but on
equipments in the core network infrastructure that adds speeds, capacity and
redundancies to the company’s existing cellsites. Equipments like additional fiber optics
and transmission equipments that are cheaper to implement, adds more capacity and
redundancies, and will be placed on existing company facilities to save cost, will greatly
improve quality and at the same time save on expense for the company. Below are the
specific steps that can be done.

 Globe Telecoms will form a team. The members will consist of consultants from the
academe, leaders of consumer groups, high-income customers and government.
They will be accompanied by key employees and top management from various
groups within Globe Telecoms.
 The main goal of the team is to 1) Identify the key concerns of its customers, 2) key
locations of the key customers, 3) key locations that badly need improvements and
finally 4) actual improvement to be made.
 Once the locations are identified, additional core network and transmission
equipment on the said locations should be doubled.
 Target is to double the existing transmission speed, capacity and additional
redundancies for each of the key locations.
 The target is to have 5 key locations to be improved every month starting 2016.
 If the capacity is not enough, the same procedure can be applied again the next
month until enough capacity is available.
 Target is to have a 20% increase in usage for each location which will subsequently
lead to a 20% increase in revenues for each key locations.
 Also, if there should be an increase of more than 50% in usage on a specific key
location, the said location will be upgraded again.

Strategy #2: Market Penetration: Globe can invest more on better service quality and
customer retention programs to attract more of the strong upper income segment
growth.

By doing this strategy, Globe Telecoms will not only improve the company’s
customer satisfaction, it will also get more subscribers for the company. The following
are the identified key issues that the company had with regards to customer service.

 Too much hierarchy that leads to slow decision making and coordination with each
group.
 Due to this slow decision making and coordination, customer issues tend to get
stuck at the customer service department.
 No clear escalation procedures in place
 No clear ticket prioritization in place
 No clear time and SLA for each customer issues
 Survey and feedback forms from the customer tends to be not taken seriously
 Customer satisfaction has a light bearing in each employee’s KPI

Below are some of the recommendations to improve the customer satisfaction for
the Globe Telecom’s customers.

 Globe Telecoms will form a team. The members will consist of consultants from the
academe, leaders of consumer groups, high-income customers and government.
They will be accompanied by key employees and top management from Globe
Telecoms.
 The main goal of the team is to 1)Identify the key concerns of its customers, 2)key
locations of the key customers, 3)key locations that badly need improvements and
finally 4)actual improvement to be made.
 Once identified, Globe Telecoms will address the main concerns of its customers
 Then, to ensure customer issues will be addressed more efficiently in the future,
Globe Telecoms will impose clear escalation procedures and issue prioritization to
all customer complaints and their respective SLA and time of restoration. Below are
the recommendations.

Max Time of each Time can that

Prioritization Description restoration updates on be escalated
time issue to next level
every 30
Priority 1 Network wide outages 4 hours every 1 hour
minutes
Priority 2 Service completely down 8 hours every 1 hour every 2 hours
Priority 3 Service up but with issues 12 hours every 2 hours every 3 hours
Customer change
Priority 4 requests 24 hours 24 hours every 24 hours

For every escalation level, the customer will be able to directly speak to top
management which will enable the restoration of the said customer issue faster and
coordination with other groups easier. Below are the recommended escalation points of
contact.

Escalation level Point of contact

1 Supervisor
2 Manager
3 Group Manager
4 Director

• Once the last escalation level is reached and the customer issue is not yet resolved,
the customer will be provided and alternative action procedure or will be entitled to a
full reimbursement.
• The said escalation procedures, SLA and ticket prioritization is patterned to the best
practices being followed worldwide which is the IT Infrastructure Library (ITIL). The
 said best practices are also being used by top telecommunication companies not just
in the ASEAN region but also worldwide.
• Surveys and feedback forms will be sent to the customer that had an issue.
• The forms will let them rate the customer service they received from the specific
company employee.
• This rating will regularly be reviewed by top management
• Also, a customer service group will be formed that is dedicated to postpaid and high-
income customers.
• This will ensure good customer service quality to this segment.
• Marketing campaigns will include these new customer service improvements when
selling this products and services to its customer most specifically the average
speed, promise reliability and uptime and the clear reimbursement and alternative
action procedures if SLAs are breached.

VII. STRATEGY IMPLEMENTATION, EVALUATION, MONITORING AND CONTROL

1) RECOMMENDED BALANCE SCORECARD

i. STRATEGY MAP

Financial
 In order for Globe Telecoms to achieve its Vision and its goal to be the
undisputed leader in telecommunication industry in the Philippines, the company must
become first the industry leader in total revenues by 2018. This can be done by hitting
Php156 Billion in total sales revenues by 2018 which translates to a CAGR of 13%.

Customer

In order to achieve the revenue goals, Globe Telecoms should become the
undisputed industry leader in subscriber base in all strong segments of the
telecommunication industry in the Philippines. To get there, the company should have a
25% CAGR on the number of its postpaid subscribers and 20% on the number of total
subscribers. Also, the company should lower its postpaid churn rate to less than 1% and
2% for its prepaid subscribers.

Internal Process

To support the goals listed above, Globe Telecoms network performance should
also become better. There should be an increase in 3G and 4G reliability to 90% and
95% by 2018. Also, the company’s network latency should decrease to 100ms for 3G
and 50ms for 4G by 2018. And finally, the company’s download speed should increase
to 15Mb/s for 3G and 20Mb/s for 4G.

Learning and Growth

There should also be an increase in technical trainings of up to 30% of total

trainings, 40% of total trainings for customer service and a decrease in corporate
hierarchy of at least 1 level. Also, new hire requirements should include a good track
record on customer service.

REFERENCES