Digi group v presentation 20110109


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Group V presentation for DiGi case study for strategic management 2011-01-09

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  • @Vincent Low I need the strategy of DiGi
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  • hi...can i ask where can see the Four competitive strategies for digi??/
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  • hi ... can i know what is the meaning of HOD workload , ENUM services and LAS speed ?
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Digi group v presentation 20110109

  1. 1. DiGi.com Berhad Group Presentation Strategic Management Presented by Group V Team Members : 1. Chan King Hooi 2. Chong Siew Heong 3. Tan Chong How 4. Teresa Goh 5. Terry Leong 6. Leong Shyh Woei 7. Boon Keng Mui 8. Jonathan Leong Group V Presentation
  2. 2. Strategic Management 1. Company Introduction 2. Vision and Mission 3. Company Values and Awards 4. Internal Analysis : McKinsey 7-S and SW 5. External Analysis : OT, PEST, Porter’s 5 Forces 6. Value Chains & Growth 7. Conclusions 8. Recommendations Group V Presentation
  3. 3. Company Introduction • Public listed company in Bursa Malaysia • Telecommunications provider, mobile broadband and mobile internet • wholly-owned subsidiary by Telenor Group • operations in May1995 with launched first digital GSM1800 services • DiGi’s approximately RM4.9 billion with a subscriber base of 7.7 million • DiGi providing the best deals to ensure excellent customer experience in mobile, internet and prepaid services Group V Presentation
  4. 4. Corporate Milestone • May 1995 • April 1996 • Dec 1997 • Dec 1999 • June 2002 • Aug 2003 • April 2004 • May 2004 • Aug 2004 • Oct 2004 • Jan 2006 • Aug 2008 • Dec 2009 • April 2010 Group V Presentation 1st digital cellular network in Malaysia. 1st digital cellular network in Sabah and Sarawak. 1st telco to be listed on Bursa Malaysia. 1st telco to introduce an e-pay system. 1st telco in Malaysia to GPRS. DiGi becomes 1st to launch MMS DiGi launches Malaysia's 1st Prepaid Online Billing. Launch of DiGi's EDGE 1st mobile to launch Mobile TV Flexi e-load and Talktime Transfer. DiGi Flexi E-Load for Postpaid. DiGi announced Deep Green to reduce 50% Carbon DiGi launch 3G services DiGi offer iPhone 3G services.
  5. 5. Vision & Mission As stars in excellent customer experience. establishes a standard of excellence that we expect and strive for. We believe our Vision attracts commitment and energises our employees. MISSION to exceed our customers’ expectations, by delivering mobile and internet services that are; “Made for me”, “Make it Easier” and offer the“Best deal” Group V Presentation
  6. 6. Company Recognition & Awards - 200 Most Admired Companies in Asia - Putra Brand Awards - CCAM Awards 2009 - Starbiz/ICRM Corporate -Responsibility Awards 2009 - Malaysia’s Most Valuable Brand Award 2009 - Malaysian Corporate -Governance Index - Shareholders Value Award 2008 - Asia’s Best Managed Companies2009 (Malaysia) -Malaysian Business - CIMA Enterprise Governance Awards 2009 - MyBranded Service Award 2009 Group V Presentation
  7. 7. McKinsey 7-S : Strategy • Establishes a standard of excellence that we expect and strive for. • Emphasis on Digit’s operational efficiency initiatives. • Improve operating cash flow. • Prioritized investments to expand and improve network System, • Attracts commitment and energizes our employees. Action: • Make things simple and easy to understand for our customers. • Products and services provided are always practical and providing the best deal. • We make things happen because we make it Easy. • Bottom-line enhancement. • Balanced cost optimization exercise to achieve higher levels of customer satisfaction. Group V Presentation
  8. 8. 7-S : Structure Group V Presentation
  9. 9. Structure ( cont. ) • DiGi.Com Berhad is a Malaysia-based investment holding company. • The Company’s wholly owned subsidiary below: • DiGi Telecommunications Sdn. Bhd. (DTSB) :establishment, maintenance and provision of telecommunications and related services (Include Domestic Rooming). • Subsidiaries of DTSB include DiGi Services Sdn. Bhd., which is engaged in property holding, renting of premises and other related services, and Djuice.Com Sdn. Bhd., which is dormant. • On February 10, 2009, the Company incorporated a wholly owned subsidiary, Pay By Mobile Sdn Bhd. Its principal activity is providing financial service in e-commerce. Group V Presentation
  10. 10. Systems 1. Deep Green system : • key efficiency initiatives involving DiGi’s network, IT systems, building and facilities, fleet and initiatives with employees, customers, partners, and the community. • Take a lead and contributes back to society in the area of carbon emission reduction. 2. Continue improvement system • Relooked at all business processes and activities and found big and small ways to make them more efficient. 3. Operation Efficiency system • Leveraged on Telenor Group Procurement in various key spend areas • Explore new technologies. • Took a leading role to ensure greater infrastructure sharing among the mobile operators. 4. Digi supply chain health, safety, security & environment (HSSE) • Apply green practice in supply Chain Group V Presentation
  11. 11. Style ( Culture & Leadership ) • People are most important asset for Digi. (Digizens) • Positive working environment • Open Communication system • Clear responsibilities • Empowerment within job scope. Group V Presentation
  12. 12. Skill • DiGi benchmarked against top service Industry organization to enhance & improve in customer service. Staff • Work @ program-Flexibility and promotes work-life balance. • Recognize and motivation. Shared value • Continue to strive for higher standards of governance with accountable and transparent processes in place. • Social responsibility • Deep Green Challenge for change (C4C) provide platform for youth of Malaysia to discover viable energy solutions & help them to commercialize it. Group V Presentation
  13. 13. SWOT Analysis : Strength 1. Men : • Flexible working hours • Open communication – encourage co-worker and manager to exchange idea and discussion • Care for employee health and safety and environment. • Provide continuously improvement to develop the talent management by providing training and development program. • Good reward to their shareholder – distribute 80% of the group’s annual net profit from financial year 2010. 2. Money • Group revenue increase by 2% to RM4.9bn in year 2009. • Subscriber base grew by 8% compare to year 2008. • Operation cash flow of RM1.4bn achieved in year 2009. Group V Presentation
  14. 14. Strength ( cont. ) 3. Market • Mobile Broadband and Mobile Network service provider • Retail – digi Family plan • E-Commerce • Go to market strategy base on LAS likely average speed-promised customer enjoy stable mobile internet connection. 4. Material • Low cost calling and high quality voice to their own associates partners, ie. Bangladesh ( Grameen ), Telenor network. • Broadband Done right and Internet Done right 5. Machinery • Mobile Virtual Network transmission system - Provide domestic roaming • Facilities– auto reloads online payment Group V Presentation
  15. 15. Weakness 1. Men • Lack of manpower and Increased HOD workload 2. Money • More training needs to provide to upgrade and continuous improvement, • More money needs to invest and maintain and upgrade their network with latest equipments. 3. Market • Market is saturated ( 106% ) and need to find innovative ways to acquire new subscribers. 4. Material • Lack of contents and value added services for their subscribers. 5.Machinery • lack of base station compared to other operators/competitors Group V Presentation
  16. 16. Opportunity & Threats Opportunity • Higher Living Standard in Malaysia • Globalization • Increasing of foreign worker Threat • High inflation – increase price • High bargaining power of customer • Malaysian Government discourage cell phone usage among school kids • Continuously technology advancement in wired & wireless technology Group V Presentation
  17. 17. Group V Presentation
  18. 18. External Analysis : Political • Malaysia government has limits the palyers in the telecommunication industry. • The Malaysia government controlled incumbent telecommunication operator ( TM and Celcom ) and compete with Maxis Mobile and DiGi. • MCMC control the spectrum and license issued. • Number Portability which enables mobile telephone customers to retain their existing mobile telephone numbers when they switch from one service provider to another. • Government initiate the policy for lower the price for university students. Group V Presentation
  19. 19. External Analysis : Economic • Malaysia economy is growing and encourages more investments. • According to Informa Telecoms & Media 2008 revealed : Malaysia is one of the fastest growing telecommunications companies in the world. • Celcom, Maxis and DiGi are sharing the RM23.4 Billion mobile telecom revenue. • Globalization bring in more travelers and businessmen into Malaysia. • The government of Malaysia launched 2 economy stimulus package worth RM100Billion. • Malaysia will reach high income nation with USD15k per annual by 2020 • The Government expects the population grow up to 50 million by 2020. Group V Presentation
  20. 20. Economic Group V Presentation •Monthly Income less than 1 k = 8.6% •Monthly Income less than 2 k = 29.4% •Monthly Income more than 2k = 62%
  21. 21. Social • Demographic : • Family income : 1000 ~3000 • Age: 16 and above • The current population of Malaysia is expected to rise from 25.6 million to approximately 28.96 million by the year 2010 with a projection annual average growth rate of 1.6%. • The Malaysian is getting advancements towards the era of High Definition digital distribution of contents, consumers demand greater bandwidth capacity for their internet connectivity. • With incomes rising, Malaysian have more disposable income, which enables to more selective with their choice of mobile phone. • Social factors are getting important in Malaysian telecommunication industry as the increasingly using the mobile phone became a society culture even become a personal culture. Group V Presentation
  22. 22. Social Program for Racial Diversity Racial diversity exercise help to balance workforce! Group V Presentation
  23. 23. Technology • Digi is still trailing behind Maxis and Celcom in continue technology advancement in wired and wireless telecommunication • 2010 is the broadband year of Malaysia, Digi need to upgrade plenty of new device and package flooding the market place tense rivalry • Communications and information technology infrastructure is a key element in Malaysia’s plans to achieve industrialized nation status by 2020. Group V Presentation
  24. 24. Intensive Growth Group V Presentation a. Market Penetration: DiGi Prepaid and postpaid, mobile internet b. Product Development : MVNO : Baraka MVNO business c. Market Development: offer iPhone and Smart plan to expand market share Diversification : NIL Generic Competitive Strategy: Low-cost provider -1. lower mobile internet price. -2. target foreign workers with lowest IDD rate.
  25. 25. b. Horizontal (Merger & Acquisition in similar industries) a. Vertical (growth opportunities) Core Business Company Backward Integration Forward Integration Unbundling / Outsourcing (Partnerships / alliances) cooperative & long term relationships Growth Strategy Digi only Vertical Growth. •Digi begin with basic phone communication. •Work with iPhone, Blackberry, Android, Window phone •Started Broadbrand, 3G, Mobile WiFi, Smart Data plan
  26. 26. Boston Consulting Group Matrix Product Life Cycle Sales Time 1 2 3 4 1. Q. Mark = eCommence ( Pay By Mobile ) 2. Star = Mobile Data, iPhone – Smart Phone Plan 3. Cash Cow = Prepaid and Postpaid 4. Dog = Digi Fix-line , D Juice Intro Growth Maturity Decline
  27. 27. Michael Porter’s 5 Forces Group V Presentation Industry Competitors Customer Bargaining Power Threat of Substitutes Supplier Bargaining Power Threat of New Entrants
  28. 28. 1. Industry Competitors Wireless Market – Digi own 21.7% in Malaysia market share 28GROUP V • Maxis • Digi Celcom
  29. 29. Competitor Analysis Revenue ( RM $ B ) Profit After Tax Co- 2009 2008 2007 2009 2008 2007 2009 Market % 2009 Margin Digi 4.909 4.814 4.362 1.000 1.190 1.062 21.07% 20.37% Maxis 12.291 11.234 9.765 1.577 (0.101) - 52% 12.83% Celcom 6.292 5.576 - 1.516 1.294 26.93% 24.09% Total 23.492 21.624 100% 29GROUP V Celcom gain highest margin, however, Digi maintain stable sales and profit margin Source: Celcom, Maxis and Digi report 2009 HIGH
  30. 30. 2. Customer Bargaining Power  Lack of differentiation among Service Providers  Cut throat Competition  Low Switching Costs  Number Portability will have –Ve Impact  Businesses & Consumers 30GROUP 7 HIGH
  31. 31. 3. Suppliers Bargaining Power 1. Network Outsourcing maintenance : Nokia Siemens, Ericsson, Huawei 2. Passive Infra-structure : Base Station, TelcoTowers 3. Call Center : outsourcing and in-house 4. Information System : IBM, Huawei, Nokia Siemens GROUP V 31 LOW
  32. 32. 4. Threat of Substitutes  Landline  CDMA  MVNO – TuneTalk, OKTel, XOX Redtone  4G WiMax players – P1, Yes  Video Conferencing  VOIP - Skype, Gtalk, Yahoo Messenger  e-Mail & Social Networking Websites 32GROUP 7 Mobile Operator BROADBAND SERVICES DIMINISHING MARKET HIGH
  33. 33. 5. Threat of New Entrants  Huge License Fees to be paid upfront & High gestation period  Entry of MVNOs & WiMAX operators  Spectrum Availability & Regulatory Issues  Infrastructure Setup Cost - High  Rapidly changing technology 33GROUP 7 LOW
  34. 34. Conclusion Digi’s generic strategy is Low-cost provider that offering the lowest overall costs than competitors. Group V Presentation
  35. 35. Recommendations A. Functional Strategies: 1. Bring in competent human capital with new blood, intensive training to present staff, and increase recruiting experienced local and overseas talent. 2. To further focus and improve Digi Supply Health, Safety, Security and Environment Assurance program. 3. Reduce the dependency on strategy sharing between mobile producers application developers etc. 4. Improve and increase efficiency and capacity of base station. 5. further improve consistent good services in terms of customer support, corporate website, FAQ, nationwide centers, specialized store, service counters, dealers. Group V Presentation
  36. 36. Recommendations B. Business Strategies 1. Increase more capacities in their biggest market share, esp metropolitan areas. 2. Set up own R&D center and developers program to help provide better value added services to Digi users. 3. Expedite their broadband coverage to whole Malaysia. 4. Set up reward system and encourage users referral program. 5. Increase additional E- commerce facilities , eg, auto reloads, online payments etc. 6. More Advertising awareness to acquire and increase customers based. 7. New Slogan for Digi : Time to Change to DiGi! 8. provide new rates package. 9. Agressively promote push sales of smartphones, eg I phone, blackberry, google, Samsung galaxy, htc. Corporate Social Responsibility : 1. To sponsor educational program to strengthen Digi brand. Group V Presentation
  37. 37. Recommendations C. Corporate Strategies: Intensive growth : 1. Start email and social networking services, expanding Value added services to their subscribers. 2. go for product differentiation offer ENUM services 3. Offer 5G or LTE services trial - Long Term Evolution (LTE), is the latest standard in the mobile network technology Strategic Alliances : Merge with Financial institute to offer mobile wallet and e- commence services. Integrated growth : Horizontal Growth : 1. Joint venture with mobile phone vendors to include latest technologies and internet functions into mobile phone. 2. JV or Acquire other VOIP company Group V Presentation
  38. 38. Thank You For enquiry: pls email to QnA@GroupV.com Group V Presentation