The Open University of Sri Lanka

Department of Management Studies

1. PROGRAMME OF STUDY MBA in Human Resource Management

2. STUDENT REGISTRATION NUMBER S92081465

OSP9336 - Strategic Management

3. COURSE CODE

RETURN : TO :
THE OPEN UNIVERSITY OF SRI LANKA K.W.K.T.LAKMAL
P.O. 21, KUSUMNADA
NAWALA, NUGEGODA PADINNORUWA
WANCHAWALA

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 Contents
1. Introduction ............................................................................................................................................... 1
1.1. Data and voice communication industry in Sri Lanka....................................................................... 1
1.2. Dialog Axiata PLC ............................................................................................................................ 1
2. SWOT Analysis for Dialog Axiata ............................................................................................................ 2
2.1. S-Strengths ........................................................................................................................................ 2
2.2. W-Weaknesses .................................................................................................................................. 2
2.3. O-Opportunities ................................................................................................................................. 2
2.4. T-Threats ........................................................................................................................................... 3
3. Michael Porters’ industry analysis model ................................................................................................. 3
3.1. Bargaining Power of Customers ........................................................................................................ 3
3.2. Bargaining Power of Suppliers .......................................................................................................... 3
3.3. Threats of New Substitutes ................................................................................................................ 3
3.4. Threats of New Entrants .................................................................................................................... 4
3.5. Rivalry among competing firms ........................................................................................................ 4
4. Identifying suitable strategies .................................................................................................................... 4
4.1. TOWS Matrix .................................................................................................................................... 4
4.2. Grand Strategy Matrix ....................................................................................................................... 5
5. The Ansoff matrix ..................................................................................................................................... 5
6. Recommendations ..................................................................................................................................... 6

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1. Introduction
This report is aimed to identify an action plan to expanding current business in 2022/2023 of Dialog
Axiata PLC. representing data and voice communication industry.
1.1. Data and voice communication industry in Sri Lanka
The telecommunications sector in Sri Lanka is one of the country’s most dynamic sectors, contributing
significantly, both directly and indirectly, to investment, employment, productivity, innovation, and
overall economic growth. Sri Lanka’s telecommunication market has mobile operators serving a
population of 22 million such as Hutchison Telecommunications Lanka (Pvt)Ltd., Dialog Axiata PLC
, Mobitel (Pvt)Ltd and Bharti Airtel Lanka (Pvt)Ltd.
While the country suffers from a relatively poor fixed-line infrastructure and a correspondingly strong
mobile sector, demand for traditional phone services increased 14% in 2020. Preliminary results suggest
a further jump of up to 13% can also be expected in 2021. The most likely reason behind the market’s
reversal of fortunes is the Covid-19 crisis and Sri Lanka’s ensuring lockdowns. These forced much of
the population back inside and reverting to ‘traditional’ methods of communication for both voice and
data services. The fixed broadband market was equally robust, growing 20% in 2020 alone. Sri Lanka
possesses a relatively low number of computers per household, however, so the fixed broadband
market’s success comes off a small base.
By 2022, the market is expanded again quickly, just as soon as the country eases back on its lockdown
measures and reduces travel restrictions. It will also be boosted, come 2022, by the anticipated launch
of commercial 5G mobile services.
When considering most recent impact for the industry is that due to economic and political crisis, it is
limited to working days and introduced the concept of work from home again. Due to fuel scarcity and
traveling limitations, both education and jobs limit to home and increased the usage of data and voice
communication.

1.2. Dialog Axiata PLC

Dialog Axiata PLC, a subsidiary of Axiata Group Berhad (Axiata), operates Sri Lanka’s Leading Quad-
Play Connectivity Provider. It founded in 27th August 1993 and it located in 475, Union Place, Colombo
02 and Mr. Supun Weerasinghe is the CEO of the group. The Company ranks among the largest listed
companies on the Colombo Stock Exchange in terms of market capitalization. Dialog is also Sri Lanka’s
largest Foreign Direct Investor (FDI) with cumulative investments totaling USD 3 billion.
In Todays ‘context Dialog GSM is the Sri Lanka’s very largest and fasted growing mobile network in
Telecommunication industry and more than 11 million subscribers were attracted to the company for
that context. In 1995, they launched their services as a 4th entrance to the telecommunication cellular
market and also in South Asian countries. It was the first digital network.
In considering main services provided by Dialog, they are mobile telephony, Dialog TV, Home satellite
TV, Dialog Global services, Dialog Broadband offers and fixed line & broadband internet service.

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Dialog is an ISO 9001 certified company, which is certified with the 27001:2013 standard for its
Information Security Management System as well. Furthermore, Dialog is currently the fastest mobile
network, having won both the Download Speed Experience and Upload Speed Experience awards from
Open signal.
Dialog Axiata supplements its market leading position in the Mobile Telecommunications sector with
a robust footprint and market presence in Sri Lanka’s Fixed Telecommunications, Digital Pay
Television, Digital Services, Financial Services, and IT services markets through its subsidiaries, Dialog
Broadband Networks (Private) Limited (DBN), Dialog Television (Private) Limited (DTV), Digital
Holdings Lanka (Private) Limited, Dialog Finance PLC, and H One (Private) Limited.

2. SWOT Analysis for Dialog Axiata

In strategic management, it is very critical stage that identifying best strategies for attaining company’s
predetermined vision, mission and strategic objectives. SWOT analysis is used as analytical tool for
identifying company’s internal environment and external environment.
Accordingly, SWOT analysis for Dialog Axiata can be identified as given below;

2.1. S-Strengths
1) Strong infrastructure & Mobile Network Leadership
As the Company continued to experience high data traffic demand, albeit within its capacity, the
Company continues to optimize its network and is well prepared to ensure customers receive a
reliable and consistent connectivity experience. Despite operational difficulties, staying true to its
vision of empowering and enriching Sri Lankan lives and enterprises, Dialog expanded its 4G
Mobile broadband coverage to 94% of the population by adding 453 sites. Opensignal the
independent global standard for real-world mobile network experience, recognized Dialog as the
best network for Video Experience, Games Experience, Voice App Experience, Download Speed
Experience, and 4G Coverage Experience.
2) Strong public relationship that has been built up since 1995
3) Reputed brand name and Dialog was the first digital network in South Asia
4) Strong network coverage spread throughout the entire Island
5) Technical innovations Dialog 4G LTE, 5G and introducing range of Unlimited Data Packages
All-new fun blaster introduced in December 2020 with unlimited Facebook, YouTube and
WhatsApp became the most popular data plan. Adding to the social media experience, Dialog
launched the fun blaster 98 pack targeting Instagram savvy social media users. In addition, the
Work and Learn packages introduced and these packages helped customers work and study from
home in compliance with social distancing guidelines while supporting all our customers to stay
connected and carry on working/studying during the extended lockdown periods.
6) Aggressive advertising and promotions

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7) International services with GSM roaming coverage of 211 destinations internationally, on over
530 networks & Dialog was also the first operator in the Sri Lanka who introduced international
roaming service
8) Large customer base -The Company delivers advanced mobile telephony and high-speed mobile
broadband services to a subscriber base of over 17 million Sri Lankans, via 2.5G and 3G/3.5G
and 4G/4.5G networks.
9) Expanded Services add competitive edge. (Dialog easy cash)
In 2010 the company received the highest “Platinum” rating in the countries first-ever Corporate
Accountability Index.
10) They have pleasant customer service assistants
when calling to customer care service and also visit to their services arcades their customer care
assistants are pleasant, well dressed, they have smiles on their faces and they treat their customers
with smile. They create positive attitude about all dialog arcade and their service assistances.

2.2. W-Weaknesses
1) High pricing in IDD calls compared to others
2) Low credit margins for business packages than other competitors
3) Weak packages for corporate sectors compared to others
4) Roaming packages are high in cost than some other operators
5) High pricing on IDD calls compared to others
6) Low credit margins for business packages than other competitors
7) Focusing on the executive level and the above than the below level
8) Weak packages for corporate sectors compared to others
9) Dialog CDMA couldn’t hit much of the market
10) Even though Dialog has a good roaming service covering a wide area, roaming packages
are high in cost than some other operators
2.3. O-Opportunities
1) Rapid growth of Telecommunication Industry in Sri Lanka, Landlines in use 3,449,000 (TRC Sri
Lanka) Mobile Phones in use 20,324,000 (TRC Sri Lanka)
2) Due to current economic crisis in Sri Lanka, the concept of work from home and learn via online
is rapidly increasing as well as during the Covid-19 pandemic.
3) High demand for unlimited voice calls and data packages.
4) Can introduce new mobile phoned under Vodafone UK as the authorized dealer.
5) Smart phone penetration is increasing rapidly
6) Can go for business diversification
7) Internet penetration is still low in Sri Lanka (12.5%)

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 2.4. T-Threats
1) Rapid changes in laws and regulations
Government increased the Telecommunication Levy from 11.25% to 15% with immediate effect
2) Fuel Crisis - Because of the lack of USD currency reservation government could not able to
fulfill the fuel demand, this is directly affect to smooth communication supply.
3) High inflation level in the country
mobile & relevant equipment is limited due to high import taxes and limiting the imports to
country with dollar deficit of the country.
4) Sri Lanka Telecom’s new internet packages with more GBs at less price than Dialog with a
reasonable speed.
5) Other operators developing new services (Mobitel launched M-cash which may competitively
effect on dialog easy cash service) and Mobitel promoting roaming packages

3. Michael Porters’ industry analysis model

To identify the industry attractiveness for the business expansions of Dialog, it is used Michael Porters’
industry analysis model as a fundamental analytical tool which directs to determine where the power of
the company has in the business and thereby find and develop an edge over the competitors in the
industry.

3.1. Bargaining Power of Customers

Customer is the most crucial party because switching cost for another service provider is very low. If
another service provider offer value added service at low cost or at a same charge, they will shift from
the company to that within just a small time and cost. Therefore, before going to business expansion, it
should be highly considered whether expansion is more attractable to customers or not.

3.2. Bargaining Power of Suppliers

Suppliers of land/mobile phones, internet supporting devices and other services have power of influence
the setting of prices to capture more industry profit. These days, limited supply of equipment and other
related services due to limited import and high inflation is highly affecting to the company sales. Dialog
should able to control its suppliers by keeping good relationship with their immediate suppliers to keep
smooth market share against their competitors. As services provider, it is must consider the power of
supporting services and good suppliers. As an example if they want to increase usage of mobile
broadband connections, it should be smooth supply of routers, antenna and other necessary equipment
without shortage.

3.3. Threats of New Substitutes

This is also very critical force to be considered as it has huge influence on profit and market share of
the company. When the price fluctuations of substitutes and also company maintaining poor quality of

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services which may affect to switch for new substitutes. As telecommunication industry is very dynamic
environment, if not services are flexible than competitors, it will lose the market and profit by loss of
subscribers of company.

3.4. Threats of New Entrants

Data and Voice communication industry is very attractive due to higher profitability with comparing
other industries even initial capital and technological requirements and high infrastructure cost are
needed.

3.5. Rivalry among competing firms

With considering Dialog, it has massive competition with Mobitel as they are in same range of services
in Sri Lanka’s customer’s mind. Therefore, they always comparing both parties in terms of new
packages, charges, services and offers etc. for the expansion of business is very crucial thing with main
competitors.

4. Identifying suitable strategies

4.1. TOWS Matrix
TOWS matrix is used in strategy formulation for combining internal analysis and external analysis of
business environment. Accordingly, TOWS analysis is developed for Dialog as earlier identified SWOT
analysis findings.
SO Strategies
Strength Opportunity
S5- Technical Innovations O2- Due to current economic This strength can be used get
Dialog 4G LTE, 5G and crisis in Sri Lanka, the concept market expansion from the said
introducing range of Unlimited of work from home and learn opportunity
Data Packages via online is increasing

WO Strategies
Weaknesses Opportunity
W2- Low credit margins for O6- Can go for business This weakness can be covered
business packages than other diversification from the said opportunity
competitors

ST Strategies
Strength Threat
S7-Large customer base T1- Rapid changes in laws and Even rapid changes in laws (as
regulations an example telecommunication
tax was increased) it can be
balanced with large customer
base.

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 4.2. Grand Strategy Matrix
According to Grand Strategy Matrix Dialog Axiata is in Rapid market growth and strong competitive
position. Therefore, it is suggested to follow strategies as follow;
 Product Development
By comparing with new changes of SLT-Mobitel, it is needed to introduce new range of
products from Dialog to keep market share.
 Market Penetration
Seeking increased market share for present products or services in present markets through
greater marketing efforts.
 Concentric Diversification
Adding new related products and services such as voice packages, data packages to market.

5. The Ansoff matrix

The Ansoff Matrix is a strategic planning tool that provides a framework to help managers devise
strategies for future growth.
In market penetration strategy, the organization tries to grow using its existing products & services in
existing markets. By decreasing prepaid/postpaid voice packages is tried to increase market share in
current market.
Product development strategy, a company tries to create new products and services targeted at its
existing markets to achieve growth. This involves extending the product range available to the firm's
existing markets. Introducing new unlimited data plans, prepaid/postpaid plans may help to product
development. And recently, it introduced data packages for Zoom, Google, Microsoft, YouTube, and
Education Apps at very affordable prices.
Concentric Diversification strategy is adding new products to customers but related to the service. It
may facilitate to existing products such as selling routers, mobile phones & TV connection etc.

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6. Recommendations
By considering SWOT analysis and identified industry attractiveness through Poter’s model such as
high entry barrier, few threats of substitutes and moderate competition among rivals it can be suggested
strategies for business expansion after analyzing of TOWS and Grand Strategy matrixes.
Accordingly, it is recommended to used strategies with it’s the strong competitive positioning and high
market growth market penetration, product development and concentric diversification.
For achieving new expansion in 2022/2023, first of all it is needed to identify internal and external
environment. As an example, due to fuel supply shortage and power cut schedules which arisen from
economic crisis and dollar deficit in Sri Lanka, it is difficult to go for expansion. Therefore, it is
suggested to do reasonable changes to do such as introducing new data plans, voice plans to attract
customers and market share.
Dialog should form alliances and partnerships with key players in the industry to enlarge its economies
of scale thereby limiting the competition from new entrants. The effect would broaden and strengthen
the network of dialog domestically and internationally
Apart from venturing into emerging markets, Dialog should consider penetrating the Australian,
European, and American economies despite the potential competition from already established players.
Fair pricing mechanisms should be implemented to offer an affordable package to customers from
diverse economic backgrounds. Minimizing the operational costs would make the price reduction move
is successful.