idea: case study

Prepared by:

Group 4

Amar Pal Singh

Apoorv Kr. Sharma

Arun Semwal

Gaurav Khatri

Dipendra Raj Tomar

Case Study

Idea Cellular

Introduction

• Customer base of over 36 million.• Customer service and innovation.• Part of Aditya Birla Group.• Operates in more than 25 countries.• Over 100000 employees from 25+ nationalities.• Started with equal share of-– Tata– Birla– AT&T Wireless

Mission

“We will delight our customers while meeting their individual communication needs anytime anywhere. We survive because of our customers.”

SWOT Analysis

Strengths

• Attractive existing footprints in 11 circles out of 23 circles in India.

• Original licensee in 7 of the established circles.• Strong distribution channel and good relations with

parent company.• High quality network structure.• Innovative strategies to attract customer attention.

Weaknesses

• The company’s debt to equity ratio is high.• The company’s revenues are derived solely from

mobile services.• The PAT margin is decreased.

Opportunities

• Increasing number of subscribers.• Opportunities of economies of scale and high

customer value.• The disposable income of middle class is increasing.

Threats

• Intense competition.• Alternative technologies like Imax, VOIP ( Skype ).• Market demand may slow down.• Govt. rules and regulations.

Porters 5 Forces Analysis

• Threat to new entrants• Suppliers bargaining power• Threat of substitutes• Customers bargaining power• Rivalry among existing competitors

Strategic Groups in Telecom Sector

• Firms can be grouped on two parameters.– Brand Identification– Specialization

Idea’s Strategic Groups

• The bargaining power of strategic group against the customer is high.

• Ideas placed in mid specialization and mid brand category.

• The height of mobility barrier due to scale of economy is moderate.

Risk faced by Idea

• Risk of other firms entering its strategic group.• Risk of factors reducing the mobility barrier of the

Airtel’s strategic groups .• Risk that accompany investment design to improve

the firms position by increasing the mobility barrier.

Future Outlooks of IDEA

• Movement towards higher strategic group.• Gaining access to large number of users.• Tremendous potential exploitation.

Organic and Inorganic Growth• Revenue increased both ways.– Organic growth, Inorganic growth.– First to launch GPRS & EDGE.– Acquisition of Escotel, RPG Cellular, Andhra

Pradesh operations of TATA cellular.– Expanding in terms of geography.– Operates in more than 11 circles.– Growth and market share increment through

innovative schemes.– Introduction of new value added services.

Acquisition History

• 2000 – Merger with TATA cellular.• 2004 – Acquired RPG in Madhya Pradesh.• 2004 – Acquired Escotel.• 2008 – Acquired Spice (Punjab & Karnataka).

Functional Level Strategies

Marketing Strategies

• Focus on numbers.• Use of celebrities.• Aditya Birla Brand.

Operational level Strategies

• Choosing "Core competency” for working.• Outsourcing rest of the work.• Strategy partnership with companies– Infrastructure needs.– Software needs.

• Partnership with Companies– NOKIA SIEMENS– ERICSON– IBM

Conclusion

• Highly competitive market.• Not lagging far behind in terms of brand and

specialization.

Thank you…