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Turkcell assignment-Strategic management
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Turkcell assignment-Strategic management

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How can Turkcell position for the 21st century? Can it afford to take a leadership role in introducing 3g, the third Generation of mobile phone systems?, How can Turkcell reduce its economic risk if ...

How can Turkcell position for the 21st century? Can it afford to take a leadership role in introducing 3g, the third Generation of mobile phone systems?, How can Turkcell reduce its economic risk if the Turkish lira remains unstable?, What are the strengths and weaknesses of Turkcell?, What are the available threats and opportunities for Turkcell?, What type of marketing campaigns should Turkcell engage in to increase the average monthly minutes used by its subscribers? What type of market segmentation should it try? How can the Turkish mobile phone user be encouraged to spend more time on the mobile phone? Would educational campaigns be helpful?,

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    Turkcell assignment-Strategic management Turkcell assignment-Strategic management Document Transcript

    • Turkcell AssignmentAugust 162011ESLSCA 34C, 3rd Semester, Strategic ManagementBy: Ahmed M. Adel<br />How can Turkcell position for the 21st century? Can it afford to take a leadership role in introducing 3g, the third Generation of mobile phone systems?<br />First what is the position in the market?<br />Positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand or organization.<br />Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market.<br />De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market.<br />What did Turkcell do?<br />Turkcell has posted its values and strategies and followed it strictly to position itself within the market:<br />Which is “To ease and enrich the lives of our customers with communication and technology solutions”.<br />The VALUES<br />We believe that customers come first<br />We are an agile team<br />We promote open communication<br />We are passionate about making a difference<br />We value people<br />Their STRATEGIC PRIORITIES<br />As a Leading Communication and Technology Company,<br />to grow in our core mobile communication business through increased use of voice and data,<br />to grow our existing international subsidiaries with a focus on profitability,<br />to grow in the fixed broadband business by creating synergy among Turkcell Group companies through our fiber optic infrastructure,<br />to grow in the area of mobility, internet and convergence through new business opportunities,<br />to grow in domestic and international markets through communications, technology and new business opportunities,<br />to develop new service platforms that will enrich our relationship with our customers through our technical capabilities<br />Driven by the ongoing evolution in mobile technologies and the increasing penetration of smart phones, the use of the mobile medium for marketing purposes is becoming more and more popular across industries. Turkcell lead a transition from a traditional carrier into a leading mobile services provider.<br />With increasing competition and demand for data services in Turkey's telecom market, introducing differentiated value-added services quickly for revenue generation and cost savings is a strategic priority for a service provider. All services - content, messaging, call management, voice messaging, and data connection services - require managing market expectations and demand quality of service.<br />To maintain its lead position in the market, Turkcell faced numerous business, operational and technology challenges. It needed to design a completely new concept for service delivery and a new approach to implement common service delivery platform (SDP) that supported multiple services across standardized service oriented architecture. The key drivers were as follows:<br />Ability to create and deploy services quickly <br />Reduce the cost and complexity of existing silo implementation <br />Effectively manage third-party content and application service provider relations <br />Create an open yet secure environment where personalized services can be easily introduced<br />Turkcell is now the leading communications and technology company in Turkey with 33.1 million subscribers and a market share of approximately 54% as of March 31, 2011. Turkcell is a leading regional player, with market leadership in five of the nine countries in which it operates with its approximately 60.4 million subscribers as of March 31, 2011. Turkcell covers approximately 83% of the Turkish population through its 3G and 99.07% through its 2G technology supported network. It has become one of the first among the global operators to have implemented HSDPA+ and achieved a 42.2 Mbps speed using the HSPA multi carrier solution. <br />How can Turkcell reduce its economic risk if the Turkish lira remains unstable?<br />Turkcell is exposed to foreign exchange rate risks that could significantly affect our results of operation and financial position.<br />Turkcell is exposed to foreign exchange rate risks because our income, expenses, assets and liabilities are denominated in a number of different currencies, primarily Turkish Lira, U.S. Dollars, Euros, Ukrainian Hryvnia and Belarusian Rubles. In particular, a substantial majority of our debt obligations and equipment expenses are currently, and are expected to continue to be, denominated in U.S. Dollars, while the revenues generated by our activities are denominated in other currencies, in particular the Turkish Lira, Ukrainian Hryvnia, Belarusian Ruble and Euro.<br />Sudden increases in inflation or the devaluation of the Turkish Lira, the Ukrainian Hryvnia, the<br />Belarusian Ruble or other currencies in which we generate revenue, have had, and may continue to have, an adverse effect on our consolidated financial condition, results of operations or liquidity. For fiscal year 2010, the TRY weakened due to the CBRT’s new rate cut policy, depreciating 2.7% against the US dollar. The Belarusian Ruble also depreciated against the US dollar, by 4.8%, during 2010. The Ukrainian Hryvnia, however, ended the year with 0.3% appreciation against the US dollar.<br />The foreign exchange risks that our Turkish activities are exposed to as a result of purchases and borrowings in U.S. Dollars and Euros have to date been manageable, as there is a developed market enabling the hedging of such risk; however, in Ukraine and Belarus hedging is impossible due to restricted and undeveloped financial markets. In the current economic environment and considering the aforementioned political uncertainties, there is a possibility of further devaluations.<br />Turkcell uses analytical techniques such as market valuation and sensitivity and volatility analysis to manage and monitor foreign exchange risk.<br /> <br />Turkcell also keeps a portion of our financial assets in U.S. Dollars and Euros to reduce the foreign currency exposure. Fluctuations between Turkish Lira, Ukrainian Hryvnia and Belarusian Rubles, on the one hand, and U.S. Dollars and Euros, on the other, may have an unfavorable impact on Turkcell.<br />In order to manage market volatility in the foreign exchange markets, we may enter into derivative transactions in line with our treasury policies. However, these derivative transactions have a cost and do not fully cover all of the risks, and any derivative transactions exercised that are either above or below market levels might result in unfavorable results to Turkcell.<br />When translate the results of operations and financial position into U.S. Dollars for the purpose of preparing financial statements that are expressed in U.S. Dollars, the dollar amounts will vary in accordance with applicable exchange rates. We do not hedge this so-called “translation risk”.<br />What are the strengths and weaknesses of Turkcell?<br />Strengths:<br />
      • First Mobile Phone Operator Company in Turkey.
      • In 16.11.2007, Turkcell had nearly 35 million subscribers.
      • Strong Awareness initiative from Management team and midmanagement( Due To Corporate Governance of Turkcell).
      • High Coverage(Nearly Whole Turkey).
      • Well established 3G services with high speed.
      • High product development and market development competencies mobile marketing and mobile banking).
      • Employees salaries above industry standards.
      • High technology network control center (operating 24/7).
      Weaknesses<br />
      • No committees( Due To Corporate Governance of Turkcell).
      • Poor Relations with Investors/External Community( Due To Corporate Governance of Turkcell).
      • Turkcell has higher communication prices compared to other mobile operators.
      • Operation costs aren’t suitable for expansion in emerging markets (Africa, South America, Asia).
      • Funds required for expansion.
      What are the available threats and opportunities for Turkcell?<br />Opportunities<br />
      • Everyday, more people buy mobile phones and subscribe to a mobile operator, Turkcell may attract new customers
      • Other Mobile Operators Subscribers may change their mobile operators because of more appropriate services or prices may be provided by Turkcell.
      Threats<br />
      • Telecommunication Market is a growing market and all mobile operator companies want to hold more percentage in the market
      • Strategies, Campaigns and Advertisements of other competitors in the market
      • Subscribers may change their mobile operators because of more appropriate services or prices may be provided by other mobile operators
      What type of marketing campaigns should Turkcell engage in to increase the average monthly minutes used by its subscribers? What type of market segmentation should it try? How can the Turkish mobile phone user be encouraged to spend more time on the mobile phone? Would educational campaigns be helpful?<br />Turkcell has worked continuously to bring the innovations in the mobile communications world to Turkey. Since their inception, we have helped the lives of our subscribers with time saving solutions and by providing products and services that ease and enrich their lives.<br />We are currently undergoing a comprehensive transformation that has been brought about by their new customer approach. Turkcell goal is to become the strongest brand in Turkey. As Turkey’s leading mobile operator, they help their customers make the most of their lives. In 2010, they tailored our communications strategy to the concept of “Get more out of life with Turkcell”. The “Get more out of life with Turkcell” concept is reinforced by our value offers: more superior technologies, more advantages, outstanding and extensive service quality, and<br />being a leader in social responsibility. With a renewed vision, they lend our power to their customers by enabling them to be more connected to life with simple communications solutions ready at their fingertips.<br />In 2011, they have evaluated the current brand architecture, naming strategy and brand expression in order to create a more powerful Turkcell brand. All sub-brands will be renewed to support one Turkcell brand. The aim is to increase the brand equity of all of products. Turkcell group companies’ branding principles will also be reviewed in order to a build clearer link with Turkcell and to create more powerful, unified Turkcell brand.<br />Turkcell brand communications will be coordinated in a more harmonic and synergetic way to strengthen the power in communications and to deliver more consistent messages through all media. In order to ensure that each of our messages effectively reach its targeted customer segment, they advertise extensively through traditional and alternative media such as television, outdoor events, cinema, radio, digital and social media and print. The new aim is to communicate “360°” with their customers. In 2011, the goal is to have the highest level of brand awareness among our competitors, as done in 2010.<br />More over and in its way to take a new path in marketing campaigns, Turkcell has used the internet social networking sites to make a new campaign, considering that traditional online banners are becoming less effective every year. The challenge then for marketers is to figure out how they can effectively communicate with their target audience, when their target audience is doing everything possible to avoid them. Turkcell took this challenge head on.<br />Turkcell’s marketing team needed to develop a marketing strategy to promote their new smart phones bundled with mobile internet too, you guessed it, ‘heavy internet users’. Turkcell hired advertising agency from Istanbul, to develop a real time Twitter based competition. This competition featured a mini site with the smart phone, which was packed in gift boxes and covered with post-its. Contestants had to tweet what was written on the post-its to unwrap the boxes, using the hashtag #turkcell.<br />The final challenge was to get a celebrity to retweet the message, winning the successful Twitter user a phone.<br />The campaign was live for three hours a day over seven days and generated 56,734 tweets.<br />Turkcell got many things right in this campaign. First, they correctly identified that their target audience are very active in social media, especially Twitter. They also realised that in order to reach this particular audience in Twitter, they would need to come up with something more creative than just setting up a new Twitter account and send out tweets with hashtags. Turkcell made it easy for users to take part in the campaign by using Twitter connect. This allowed users to log in to the campaign mini site with one click.<br />Not only had these heavy Internet users to read actual advertising messages to take part in the competition, they had to voluntarily retweet these messages to their friends. Turkcell not only reached their target audience of heavy internet users, they turned them into unsuspecting advertisers.<br />Turkcell has segmented tariffs plans that target specific subscriber groups. In the postpaid segment, pay as you go tariffs offer on-net (Turkcell subscriber to Turkcell subscriber) usage advantages. The packages include minutes for on-net and fixed line calls, intra-company calls or all national directions. Packages are widely preferred by our customers. In the prepaid segment, the main tariffs offering advantageous prices that are based on a refill amount are ‘Super Tariff’ and ‘Youth Tariff’. In addition, we provide fee-based optional minute packages/TRY cards for calls to OMO, PSTN and for calls within a specific time period, such as weekends and nights.<br />Turkcell has also have an all inclusive package (Gold+), which provides higher comfort and satisfaction specifically for high payers. Offering yearly-discounted and fixed-priced versions of our postpaid premium price plans to retain the current premium customer base and to induce mass customers to pay more for increased benefits. In addition, they also have loyalty subscriber programs. <br />Through Turkcell consumer approach, customers have been grouped by segments after taking into consideration their occupation and, with regards to the youth segment, their age.<br />Youth segment management, including the loyalty program, ensures customer retention by<br />presenting campaigns and advantages that fit youngsters’ trends of life. This aims to reinforce Turkcell brand recognition as a young, dynamic, popular, intimate brand.<br />In addition to the youth segment, they shall focus on “new segments” (such as farmers and housewives) with differentiated GSM and non-GSM offers, as well as campaigns and co-branded activities with selected companies from other sectors to create added values to targeted segments. All loyalty schemes are designed in line with the targeted segments’ lifestyles, needs, priorities, and expectations since new segments aim to increase to loyalty of current Turkcell customers as well as attract new customers.<br />Turkcell can encourage can encourage the Turkish mobile users through loyality programs like:<br />Turkcell Platinum, a premium loyalty & customer experience management program which offers special GSM, and non-GSM/3rd party advantages to individual customers in order to ensure behavioral and emotional brand loyalty, via a seamless series of positive brand experience in all customer touch points.<br />For postpaid business, periodical free minute programs (campaigns) with which the customers<br />gain different amounts of free usage based on their Turkcell tenure.<br />For prepaid business, offering prepaid customers monthly fee based packages that includes SMS and voice advantages. <br />Promoting such packages to increase retention of the prepaid subscribers and the revenue<br />generated from them.<br />As Turkcell businesses includes, a provider of educational services over the Internet and television, Global, a telemarketing company, Turktell, a marketing company, Inteltek, a gaming company, and Libero, a betting company.<br />Turkcell's main educational project, "Contemporary Girls of Contemporary Turkey", which started in 2000, grants scholarships to 5,000 young women in less developed parts of the country. The project received international recognition in June 2001, when it won the UK "Institute of Public Relations Excellence Award" and the "Crystal Obelisk Award" from the Foundation of Women Executives in Public Relations in New York in 2002.<br />Moreover Turkcell can target the segment of students in high school and universities; through a community tarrif that will post their revenues in through this market segment.<br />