TELEFÓNICA CASE IN THE CZECH REPUBLIC

1. Using the information in the case, elaborate the structure and an outline of a scorecard for Telefónica's top management with the main indicators it should
contain to decide and see the impact of Free's launch.
 CONTROL PANEL

PERSPECTIV 2013
INDICATOR INITIATIVES FREQUENCY
E NAME 2013 DEFICIENT CAUTION OPTIMO
To reduce the
impact of the
downward Operating Valu < 2500 2500 Valu < 4000 4000 Valu 4238
42383 million < < < Annual
trend in Income e = 0 0 e = 0 0 e 3
operating Strengthening
income of the
Postpaid
Financial segment by
encouraging
Ensuring Increase in the acquisition
Valu < Valu < Valu
business OIBDA 3% 1% 1% < 2% 2% < < 3% of Free plans. Annual
e = e = e
sustainability Margin

Increase
Strengthening
customers to Migration at Valu < Valu < Valu
12% 3% 3% < 9% 9% < < 12% and training of Monthly
the Free Rate new rates e = e = e
sales channels
Plan

Customer

Effective
communicatio
Improve Customer
Valu < Valu < Valu n of tariffs and
customer satisfaction 78% 30% 30% < 60% 60% < < 78% Monthly
e = e = e non-
satisfaction index
abandonment
incentives
 Special
Moments
Customer Post Payment Valu < Valu < Valu
5% 1% 1% < 3% 3% < < 5% benefit Monthly
loyalty Fee e = e = e
communicatio
n campaigns

Improving
the efficiency Revenues/ Valu < Valu < Valu
5% 1% 1% < 3% 3% < < 5% Process Monthly
of sales costs e = e = e
channels improvement
due to staff
training and
Processes
technology
Decrease in change -
Improve computer
projected
product / Valu < Valu < Valu
complaints 6% 2% 2% < 4% 4% < < 6% system Monthly
service e = e = e
through
quality
invoicing

Learning Reduce Telephone 7000 calls Valu < 3000 3000 < Valu < 6000 6000 < Valu < 7000 Reduction in Monthly
errors on claims for e = e = e the number of
invoices and errors postpaid
claims breads, which
facilitates the
collection
process and
communicatio
n with the
client.
 Intensify
staff Intensive
Total
knowledge Valu < Valu < Valu training on
activation rate 13% 4% 4% < 10% 10% < < 13% Annual
and skills e = e = e new policies
per channel
through sales and tariffs
channels

Availability To provide an
of adequate
distribution Valu < Valu < Valu service, with
Staff training 240 100 100 < 200 200 < < 240 Annual
channels for e = e = e properly
improved trained
training personnel.
 PICTURE SENT ME INTEGRAL

FINANCIAL Operating Income Increase in OIBDA Margin

Customer satisfaction
CUSTOMERS Migration to new tariffs Post Payment Fee
index

PROCESSES Revenues/costs Decrease in projected complaints through invoicing

LEARNING
AND Telephone claims for Total activation rate per
Staff training
DEVELOPMEN errors channel
T

2. Analyze customer complaints (Annex 17 bis) using the most appropriate tool
for this purpose and comment on the conclusions you would reach.

REASONS FOR Accumulat

CUSTOMER FREQUENCY %
COMPLAINTS ed
Service not requested 35 37.23% 37.23%
Noncompliance with
25
Commercial Offers 26.60% 63.83%
Cancellation / Portability 15
15.96% 79.79%
International Service 7 7.45% 87.23%
Interruption / Lack of
4
Service 4.26% 91.49%
Commercial Attention 3 3.19% 94.68%
repairs and Terminal
3
Damage 3.19% 97.87%
Other Reasons 2 2.13% 100.00%
94
 To analyze the trend of complaints, the Pareto diagram has been used. From what has been
observed, it can be concluded that 80% of the problems are centered on the first three:
unsolicited service, non-compliance with commercial offers and portability. The main
complaints received from customers are: Unsolicited Service, Non-compliance with Commercial
Offers and Processing of cancellations/portabilities. As can be seen in the graph, these three
causes of customer dissatisfaction account for 79.79% of the total number of complaints, and it
is therefore recommended that immediate action be taken in this regard.

RECOMMENDATIONS

1. Implement training in customer service to reduce customer dissatisfaction.

customers. Under the same guidelines so as not to confuse the consumer.

2. The products offered by the company must be delivered to the customer.

3. Use what is recommended in the balanced scorecard with respect to the processes.
internal and learning and development

3. Comment and argue from a strategic and operational point of view whether the
postponement of the 4G license auction would have been better to postpone also the
launch of Free or it was better to go ahead with it.

I believe that the decision taken by the company was correct and timely. Due to the
market change and would be different, becoming the first company in this and its
future leader in the market, with great competitive and comparative advantages. With
the constant change of the market, the competition would have imitated it according
to their methodologies and strategies. At the beginning this scenario created many
doubts and risks due to the fact that in the future the company would face a scenario
of a changing market.

In addition to the fact that the main pillar of the company was the client and therefore
we sought to deliver clients adapted to their specific needs according to each proposal,
always complying with supply and demand.

From my point of view, the greatest contribution of Telefónica's "Free" tariff plan is to
position the company as a leader in its sector, in addition to gaining the "top of mind"
of its customers. This will make subsequent strategies more readily accepted by your
users. In other words, this strategy prepares the ground for future plantings.