Professional Documents
Culture Documents
Grameenphone
TERM PAPER
on
Strategic Management of Grameen Phone
Course Title- Strategic Management
Submitted By Submitted To
TABLE OF CONTENTS
Description Pages
Table of Contents 2
Introduction 3
Objectives: 4
Company Overview 4
Why 10
Recommendations 14
Conclusion 18
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INTRODUCTION
Grameen Phone Limited is an existing company, and is the leading cellular service provider in
Bangladesh operating a nationwide. Over the past few years the use of cell phone brought about
tangible changes in the lifestyle of the people of Bangladesh. Today, a cellular phone is a mere
necessity. From a small retail trader at Karwan Bazaar to a remote villager uses cell phone. Four
companies are operating in the mobile phone sector in Bangladesh. GrameenPhone, Citycell,
Aktel and BanglaLink. Among them the services of Grameen Phone appear to be comparatively
better in terms of nationwide networking, customer handling, trouble shooting, billing system etc.
Grameen Phone (GP) has been established to provide high quality GSM cellular services at
affordable prices. In addition to providing prepaid and postpaid cellular phone services, the
company also assists in a -Village Phone- service by being the sole provider of
telecommunications services to the Village Phone operators. The Village Phone service provides
rural connectivity to approximately 30 million people. Grameen Phone‟s total capitalization was
US$120,000,000; including around US$50 million from IFC/CDC, and the Asian Development
Bank (ADB). It also received US$60 million in equity from the four Grameen Phone private
partners. “Grameen Phone” might have been born in Bangladesh, but soon it is likely to join the
international cellular jargon. GSM MoU Association at GSM World Congress in Cannes where
many villagers made their first-ever call using pre-paid, recently rewarded rural cellular
marketing, by Vodaphone in South Africa. “Grameen Phone” the unique cellular operator from
Bangladesh, also made an impressive presentation at Cannes.
Objectives
The main objective of the term paper is how the company operate their corporate activities as well
as unit planning, product planning, marketing planning and how the company implementing these
plans and control.
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COMPANY OVERVIEW
Grameenphone Ltd. is the largest mobile telecommunications operator in Bangladesh in terms of revenue, coverage
and subscriber base. The company was incorporated on 10 October 1996 as a private limited company.
Grameenphone converted to a public limited company on 25 June 2007. The company became stock listed and
started its trading at Dhaka and Chittagong Stock Exchanges from 16 November 2009. The shareholding structure
comprises of mainly two sponsor Shareholders namely Telenor Mobile Communications AS (55.80%) and
Grameen Telecom (34.20%). The rest 10.00% shareholding includes General public & other Institutions.
Grameenphone Ltd. is a leading provider of telecommunications services of Bangladesh. The company operates a
digital mobile telecommunications network based on the GSM standard in the 900 MHz, 1800 MHz and 2100 Mhz
frequency bands, under license granted by the Bangladesh Telecommunication Regulatory Commission (BTRC).
The table below gives an overview of the mobile spectrum licenses held by
Grameenphone Ltd.
Grameen Phonehas already established themselves as one of the largest conglomerates and the leader in many areas
of business and industry in Bangladesh. They want to go far ahead from where they are right now. The group wants
to be the largest business house of the country and the biggest contributor from the private sector. It also wishes to
create more job opportunity for the Bangladeshi people so that they become the largest employer in the private
sector.
The group has come a long way in reaching these goals by listening to client needs, learning real- time lessons from
past projects, innovating and partnering. Through the major investment undertakings. Grameen Phone has
meaningfully contributed to the economy‟s stability in financial and capital markets. Underlying all of the group‟s
activities are the common threads of change, flexibility and fostering closer ties with the government, the city
corporation and our clients. Most of its projects have been success stories- this fact alone is enough to justify a
sense of
Mission:
“Grameenphone is the only reliable means of communication that brings the people of Bangladesh close to their loved
ones and important things in their lives through unparalleled network, relevant innovations & services”.
Vision:
"We exist to help our customers get the full benefit of commendations services in their daily lives. We‟re here to help."
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Values:
Make It Easy: We're practical. We don't over complicate things. Everything we produce should be easy to
understand and use. No waste. No jargon. Because we must never forget we're trying to make customers' lives
easier.
For our customers, making it easy will be addressing some very fundamental customer needs. They need simplicity.
They want solutions and services that are easy to buy, easy to use and are built to meet their needs. They expect
solutions and services that work well and as they should.
For Telenor employees everywhere, this means the following... No jargon, be direct and be simple. Show
transparency. Push for simplicity in tools and in logistics. Share best practices. Adopt clearly defined roles and
responsibilities.
For our shareholders, this will mean cost efficiency and return on investment, as well as a move away from tactical
investments to an increased focus on long-term strategy.
Keep Promises: Everything we set out to do should work and meet the needs of stakeholders, or if it doesn't we
need to be there to help. We're about delivery – fulfilling expectations. We don't over commit - we're about actions
not words.
For our customers, this will mean they can build trust in us. The solution or service works - if not, we are there to
make it work. They need us to deliver on time, to expected levels of quality, and at a fair price. They need us to be
strong on action, not on fine words!
For employees everywhere, this means... We follow through. We never launch something new before it works as it
should work. We arrive on time and we deliver on time. We commit to concrete, realistic promises to our customers
- and deliver on our promises.
For our shareholders, this will mean that we lead the industry in customer satisfaction, and win industry recognition
for follow-through and delivering on our promise.
Be Inspiring: We are creative. We strive to bring energy to the things we do. Everything we produce should look
good, modern and fresh. We are passionate about our business and customers.
For our customers, this will mean they will want to engage with us, will appreciate our innovative and modern
approach, will appreciate our future-proofed solutions and services, and will acknowledge our category leadership.
For Telenor employees everywhere, this means... that we live up to the challenge every day and inspire our
colleagues and customers to walk the walk! We must call for creativity at every level, show care, energy and
passion. We must be fresh and direct, and demonstrate a can-do attitude.
For our shareholders, this means leadership in our focused category, and a business model that is sustainable into
the future.
Be Respectful: We acknowledge and respect local cultures. We do not impose a single formula worldwide. We
want to be a part of local communities wherever we operate. We believe loyalty has to be earned.
For our customers... this will mean each of them can expect to be treated like an individual. Each of them will feel
valued, understood and listened to, and their needs acted upon.
For Telenor employees everywhere... this means we sign up to using customer feedback as a means to improve. We
value the individual and diversity, and we act as a team. Our behaviors are infused with honesty and strong ethics.
For our shareholders... this will mean they can count on clear codes of conduct across our organization.
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Types of Strategy Company Follows: Grameen Phonefollows following strategy. Such as…
Who: All the people of Bangladesh who use the cell phone to communicate with each other are targeted
customer of Grameenphone Ltd.
What: People want to communicate with each other through voice & data. For this reasons they need an
uninterrupted communication path & device by which the capable to communicate with each other at any
time from any place.
How: Grameenphone developed a communication path all over the Bangladesh by taking license from
Bangladesh govt. using the spectrum & making mobile tower at different place of Bangladesh.
Grameenphone Strategy
Grameen Phone‟s basic strategy is to coverage of both urban and rural areas. In contrast to the “island” strategy followed by
some companies, which involves connecting isolated islands of urban coverage through transmission links, Grameenphone
builds continuous coverage, „cell after cell‟. While the intensity of coverage may vary from area to area depending on market
conditions, the basic strategy of cell-to-cell coverage is applied throughout Grameen Phone‟s network.
Functional Level Strategy - Grameenphone‟s focus is on efficiency, quality, innovation, and customer
responsiveness. This enables the organization to earn competitive advantage over the competitors.
Business Level Strategy - Grameenphone mainly applies cost leadership strategy. In addition, they also apply
differentiation strategy as their business level strategy.
Corporate Level Strategy - Grameenphone follows related diversification as their corporate level strategy. They
have an extensive variety of products and services directed towards different segments of the market. These products
are Nishchinto, Bondhu, Djuice, Myplan, Xplore Legend.
Grameenphone Ltd. is the leading telecommunications operator in Bangladesh with full network coverage in 61
district & partial coverage other 3 district. As a market leader & gain the competitive advantage the major moto of
this company is to provide both coverage & quality network at all the place of Bangladesh which is known as a
“toilet coverage”.
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To provide the quality network all over the country the company need to invest lot of money. But as on part of cost
leadership strategy the company take some unique initiative & process innovation in it system by which it achieved
its cost leadership strategy & gain more competitive advantage. The major initiative & innovation are discussed
below.
GP make a Regional Operation team by own employee who are working dedicatedly 24X7 to live the network from
32 sub center of whole the country. This field force actually create the difference among telecom operators for the
network availability & quality & make GP no one network operator in Bangladesh. Their dedication, innovation,
efficient operation give uninterrupted network service to the customers.
Categorized Site/BTS:
To reduce the network expansion cost, Grameenphone make categorized mobile tower based on customer
availability & their requirement.
Macro BTS : The full configuration BTS contains six/three cell which is make in crowded area like
city, market & other crowded area.
Micro BTS: The half configuration BTS contains two/one cell which is make in some specific area
like highway, riverside, village area.
Pico BTS: The small configuration BTS contains two/one cell which is make in some specific area
like high-rise building.
Femto BTS: The small configuration BTS contains two/one cell which is make in some specific area
like small building among high-rise building.
IBS BTS: The small configuration BTS contains two/one cell which is use to give indoor coverage.
Repeater BTS: The small configuration BTS contains two/one cell which is use to give indoor
coverage alone or with IBS.
Atom BTS: The small configuration BTS contains two/one cell which is use to give coverage at high
traffic or dense populated city road area.
Optical Fiber:
To provide the sufficient bandwidth all over the country GP go with partnership to Bangladesh Railway to take
support from its existing optical fiber & lies to deploy new optical fiber. Besides this GP placed 1500KM
highway fiber for 1+1 protection purpose.
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BTS Swap
BTS swap is one of the major cost driving project of Grameenphone which brings the magical change in GP‟s
yearly operational cost which was happen in 2011. In this project GP contract with Huawei technologies Co. Ltd. to
take their BTS. Under this project the existing Ericsson BTS were swapped by Huawei BTS. The major advantage
of this equipment was the low energy cost. The energy consumption of Huawei BTS was half of the Ericson BTS
though the product quality was same.
DC Ventilation
Another cost driving project was DC ventilation system (DVS) implementation at site in 2012. Under this project
the air condition of BTS site replace by DVS for cooling purpose. The energy consumption of DVS system was one
fourth of Air Condition. This project implementation was possible as the Huawei BTS is sustain at higher
temperature (0 to 60 degree Celsius)
GP also introduce alternate energy source in their network due to two reasons
Installed 6KWp solar system in no grid & poor grid unavailable site to provide uninterrupted network
coverage during grid fail condition.
GP also achieved green energy award as telecom operator for introducing large scale green energy in their
network.
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Efficient Process in DG Running
GP also introduce voltage dependent timer & bring some efficient process in DG sites to save the fuel cost. This is
also a major cost drive which help GP to reduce the operational cost.
Outsourcing
To reduce the operational cost GP has taken initiative to outsource in supportive function. In technology division
they outsource their passive maintenance part. Besides this some other supporting function like P&O,
Information technology, call center etc. Through outsourcing GP reduced its employee no from 5200 to 2650 in
last four years. In this way GP reduce its operational cost.
Through this above project GP magically reduce its half of the energy cost which help to be a cost leader in telecom
market in Bangladesh.
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Overall cost leadership strategy means to reduce the cost of a product, employee & customer satisfaction is good
than other company. So, the GrameenPhone follow the overall cost leadership strategy because GrameenPhone
reduce the product cost and always maintain the service quality.
In the mid-1990s, the telephone service in Bangladesh was in a very poor state. The country had one of the lowest
teledensities in the world with less than one phone per 100 inhabitants. In 1996, the government granted three
additional cellular service licenses, one of which to Grameenphone Limited (Grameenphone). In January 1998,
ADB approved an equity investment of $1.6 million and a senior loan of up to $30.0 million. The project entailed
the construction and operation of a nationwide cellular telephone system that would provide common cellular
services in the main cities, and village phone program in rural areas of Bangladesh. In January 2004, ADB
approved another loan of up to $20.0 million for the expansion of Grameenphone's network.
The performance evaluation report rates the project highly successful overall. The project achieved its main
objective of assisting the establishment of a nationwide telephone system. By the end of 2011, Grameenphone's
mobile services covered 90% of the land area and 99% of the population. The village phone program has also
provided telephone access to about 95% of the villages in rural Bangladesh.
The project made a very substantial contribution to private sector development and was rated excellent in this
category. Grameenphone, as the dominant cellular service operator, contributed greatly to the growth of the
telecommunications sector. It has notable upstream and downstream linkages, promoted competition and
innovation, provided a big boost to the country's capital markets, and demonstrated high standards of corporate
governance.
In terms of business success, the project was rated excellent. The project surpassed all the operational and financial
targets that were set during approval. Its contribution to economic development was likewise rated excellent, as its
real economic internal rate of return was greater than the threshold economic internal rate of return of 20% for such
a rating.
The project's environmental, social, health, and safety performance has been exemplary. In 2008, Grameenphone
formally launched its Climate Change Program with the objective of reducing carbon dioxide emissions by 40% by
2015 from the business-as-usual situation, with 2008 as the baseline.
The project purposely promoted social development and inclusive growth. The village phone program has provided
earning opportunities for thousands of people who serve as village phone operators and has afforded telephone
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access to previously unserved areas. Grameenphone has also established community information centers that offer
low-rate but high-speed voice, data, and other communication services to previously unconnected people.
One lesson from the project is the importance of strong sponsors to help ensure the success of private sector
projects. The individual strengths of the major sponsors - particularly the extensive business experience and good
corporate governance practices of Telenor and the wide distribution network and brand recognition of Grameen
Bank - and the synergies between them are the qualities that ADB should look for in project sponsors when
considering future private sector operations projects.
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Strengths
Widest Network Coverage: Among the mobile service provider, Grameenphone has the widest network coverage in
all over the country. All the 64 districts are now under the GP network. GP has earned a clear positioning in the
customers mind for quality and reliable network in every corner of the country.
Brand Awareness: Grameenphone has a remarkable achievement in terms of brand awareness. GP has 98% brand
awareness among its target customers in Bangladesh just in 11 years. This is the highest percentage of brand
awareness ever achieved by any foreign and local company in Bangladesh. Apart from the target customers, almost
every person in the country knows about the company.
Brand Loyalty: The reason for GP to be the market leader in our country is the company has a much larger poll of
loyal customers than its competitors. In spite of heavy promotional and reduced price offer by competitors, the
positive image of the brand (Grameenphone) has helped the company to retain its customers.
Largest Customer Service: Along with the widest network, GP has 24 hour call center facilities and the largest
customer service touch points spread all over the country.
Relationship with Customers: Over the year GP has maintained a very good relationship with every kind of
customers through impressive public relation activities and proper communication.
Corporate Social Responsibility: In all these years Grameenphone has been a very good corporate citizen in the
business world. The brand image that the company has today, is mostly because of its doing business in a socially
responsible way.
Empowerment: The Village Phone package of GP has created a lot of empowerment for rural women who use
their mobile phone for small business.
Social Involvement: GP‟s social involvement with end level customer through help desks like community
information system has opened a wide array of internet facility for village people. Such activities have made
the company a people‟s brand which cares for the progress of its customers.
Advertisement Campaigns: One of the biggest strengths of Grameenphone has been its innovative and emotional
advertisement campaign. Heavy promotional activities in all short of media have created a superior presence of the
company in customers mind.
Product Innovation: GP has always been a market leader in introducing new value added services for its customers.
Its different value added services like health line, cell bazaar, bill payment, internet facility etc. has been an extra edge
for GP over the competitors.
Weakness
Large Number of Uneducated Customers: Most of the mobile subscribers of our country are uneducated and they
don‟t even know how to use the mobile except some basic features. It has been really hard for them to educate those
customers to get the most out of their mobile phone and the value added services.
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Tariff Plan: Their tariff plan is much more than the other operators in Bangladesh. Though Bangladeshi people are
very much pricing sensitive, it might cause serious problem for GP.
Lack of Customer Education: Subscribers are not educated enough to handle the mobile phone effectively. This is
very sophisticated technology and proper knowledge is essential to handle these mobile sets
Opportunity
Unserved Market: Now a day, almost every people in Bangladesh has a mobile phone. In spite of this huge
availability, still there are large segment of unserved market of 10-20% of the total target market.
Demand for Mobile Internet: There is an increasing demand for internet facility on the mobile phone. People want to
use this blessing of modern technology through their mobile phone and it creates a new opportunity for
Grameenphone.
Declining Prices for Handsets: Few years ago the people of low income could not effort mobile phone services due to
the high price of handsets. Now the price of handset has decreased and the low income people want to get connected
through mobile phone.
Economic Growth of Bangladesh: The economic growth of the country will increase the expansion of
telecommunication industry. From 1995 to 2007, there is a huge change in telecommunication sector
Threats
Market Saturation in Some Segment: The upper end segment of mobile customers is almost saturated. Almost every
person in that segment has a mobile phone. So there is not much potential for business in that segment.
Government Regulation: Bangladesh Telecommunication Regulatory Commission (BTRC) started its activities from
January 2002 and now it is strictly regulating all the activities of mobile operators. So doing business in this
regulating environment has become a problem.
Current Inflation and Economic Condition: The entire country is going through high inflation and poor economic
condition. People are more concerned about spending their disposable income, so slowly the profit margin is
decreasing.
Increasing Number of Multiple SIM Users: Now a day, there has been a common trend of using multiple SIM card
and seek for better offering by a large number of customers. As the competitors are coming up with new low price
offering, there is a strong possibility that customers might bend toward them
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Recommendation
Compensation refers to all forms of financial returns: tangible services and benefits employees
receive as part of an employment relationship, which may be associated with employee‟s services
to the employer like provident fund, gratuity, insurance scheme and any other payment which the
employee receives or benefits enjoys instead of such payment.
The compensation package offered to a company's employees is essential not only because it costs
money, but because it is likely to be the primary reason the employees work for the firm.
Compensation packages with good pay and advantages can help attract and retain the best
employees. A quick survey of employees about compensation is likely to expose an expectation
that wages are fair and cover basic living expenses, keep up with inflation, leave some money for
savings (perhaps for retirement) and leisure, increment over time.
A company's compensation scheme also informs a great deal about the firm's values and
cultures. Employees often look at what a company pays rather than what it says. In many aspects,
people behave as they are rewarded. A compensation scheme projects what the company expects
of its employees. For example, if quality is an essential value, then it should be implemented
through some element of the total compensation system.
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It creates a base for happiness and satisfaction of the workforce that limits the labor turnover &
confers a stable organization.
It enhances the job evaluation process, which in return helps in setting up more realistic &
Standard
It is designed to abide with the various labor acts and thus does not result in conflicts between
the employee union and the management. This creates a peaceful relationship between the
employer and the employees.
It excites an environment of morale, efficiency and cooperation among the workers and ensures
satisfaction to the workers.
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Scope of improvement to retain qualified employee
Grameen Phonealways does the following work to retain their qualified employees. Short
description of Employee Benefits given bellow….
Salary:
To compare with all the local banks Grameen Phonepays relatively so high to their lower level employees. It is
done due to grab the potential employees from the market. Actually, there are few companies in the market to pay
such a high basics to their employees for which Grameen Phone is still is the first choice of new comers. This is the
area in which Grameen Phone has done marvelous job because now-a-days employees are more concern of their
basics. Grameen Phone has successfully adapted this change. It has been seen that employees of Grameen Phoneare
highly satisfied due to the convenient salary structure as other company in the market are not paying like this.
Moreover, Grameen Phoneused to review its salary once in a year. For an instance every December, the salary of
the employee review based on the performance which is key motivating factor to perform well. Another thing that
is to mention that Grameen Phoneconducts performance evaluation twice in a year according to that they are to
review the salary.
Salary Payment:
The most important thing about the payment of the salary of Grameen Phoneis that it clears all the salary payments
within 25thof each month which is quite absent in other companies. The employees are paid their every month
salary on their accounts which they have to open while joining in the company. It is good in such way that all the
tax and deductible income are cut by company itself and the employees get those amounts withdrawn the money
from their account as a whole.
Bonus:
Like the other banks, Grameen Phoneprovides two festival bonuses to their employee‟s one is in Eidul- Fitar
another one is Eid-ul-Azha. The bonus is equivalent to the basics of the employees. Moreover, there is another
provision regarding the bonus which is based on the performance of the employee. But it actually depends in the
performance of the branch which means if a branch does well as a whole then all the employee.
The BPML and the BMPIL provide subsidy for each of the employees regarding the daily lunch and office bus for
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take and drop facilities. The companies provide 65% costs of the food and transport facilities and the rest of the cost
are paid by the employees. Although it is not mandatory for everyone to pay for these facilities, only those who
need the facilities they will pay for the facilities.
Performance Bonus:
If the bank makes profit, the employees will be entitled to 3% of pre-tax profit as performance bonus. Fifty percent
of such bonus distributed on the basis of basic pay of an employee, and balance fifty percent on the basis of
performance of individual employees. Performance appraisal for the purpose made on the criterion set by the
management time to time.
Annual Increment:
There is a provision of annual increment of Grameen Phonewhich is 10% increment based on the performance. It
works as a motivating factor for the employees to perform well. Therefore, each employee tries their best to make it
happen so that their base salary having well shaped structure.
Travel Allowance:
The Grameen Phonealso provides travel allowance to their employees. If any employee travels any place in
Bangladesh regarding company‟s prospect, they will get the money or remuneration that is cost by them but the
cost that is spent is verified by the HR personnel and after that they got the requisition of the money.
Employee Loan:
Unlike other banks, Grameen Phoneprovides a great scheme of loans to their employees. First of all, the permanent
employees get loans from their provident fund at a cost of 10%. %. They can use their money for several purposes.
Secondly, from the executive level the employees are qualified for home loans, car loans and others at a cost of 8%
where it is around 15% for the customers so it an extra benefit consumed by the employees.
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Medical Facilities:
The medical facility provided by Grameen Phoneis quite different from other Companies. GRAMEEN PHONE has
their own medical team to look after their employees in case of any medical assistance. They have their nursing
home as well. Therefore, employees of Grameen Phonedo not have the opportunity to enjoy life insurance which
means Grameen Phonedoes not provides life insurance policies to the employees.
Welfare Funds:
Every year 200 taka for each employee is deducted to count in the employee welfare fund. The money induced
from the welfare fund is used for the welfare for the employees when they are in trouble or in emergency. This
money is totally distributed to the employees so that they feel safe emergency period.
Earn Leave:
The employees who complete one year of service without any unusual leave, get 30 days for earn leave in a year. It
means their paid equivalent 30 days of compensation.
Disability Leave:
If any employee faces unusual accident or physical challenge, then they are provided leave granted by the company
which is called disability leave but for this leave the salary of them will not be deduced which means these are paid
leave.
Maternity Leave:
Maternity leave may be granted by the competent authority to an employee for a maximum three months period at a
time. This flexibility is provided considering the labor law made by the government. This is also a paid leave.
Conclusion:
Grameenphone Ltd. keeps modifying & updating their network & talk time package with several offers on daily
basis. However, till date, the acceptance of GP among all the people is greater than other competitors because of
their good network coverage & quality. Besides GP has high pricing voice & internet package, as result day by day
it lost his acceptability among youth generation. Although GP is trying their best to get engaged with the customers
through various social media platforms and their service motto is – “CUSTOMER FIRST”, it has been observed
that the growing subscription number has lesser youth in it. Although cost-effective pricing strategy is the best tool,
if GP can deliver superior value by exceeding the customer expectations on product attributes and continues such
customer engagement in the upcoming days, it sure will be able to hold its‟ number one position in the telecom
industry.
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