Presentation Structure: An overview of ISP: Hathway SWOT Analysis of Hathway Value Chain Analysis of Hathway VROI Analysis of Hathway Conclusion
An overview of ISP: Hathway Entered into Broadband Technology in the year 2000, providing internet with DOCSIS technology. Reached 100,000 customers in 2004. Acquired two major MSOs in Maharashtra: Hathway Rajesh Multichannel Private Limited and Hathway MCN Private Limited. Reached 3,20,000 subscribers in 2009.
SWOT AnalysisStrengths• Experience in ISP market• Known name• Innovation• Business contracts/Peering agreements• Experienced personnel• Network management and economics knowledge
Weaknesses• Customer service is somewhat lacking• No local content• Usually don’t own infrastructureOpportunities• Relationships with Telcos long established• Mergers with content providers• Acquire smaller enterprises• Development of web applications
Threats• Entry of Telcos/other cable companies• Some market squeeze• Saturation of Market
• Experience in ISP market • Customer service is somewhat• Known name lacking• Innovation • No local content• Business contracts/Peering • Usually don’t own infrastructure agreements• Experienced personnel• Network management and economics knowledge Strengths Weaknesses Threats Opportunities• Entry of Telcos/other cable • Relationships with Telcos long companies established• Some market squeeze • Mergers with content providers• Saturation of Market • Acquire smaller enterprises • Development of web applications
Value Chain Analysis- Primary ActivitiesInbound logistics - HIGH• Inbound logistics add a lot of product value for large ISPs since they need to minimize the ‘lease’ costs.Outbound logistics - HIGH• Outbound logistics are relatively high for large ISP’s since they need to ‘minimize’ ‘lease’ costs.Operations - LOW• Typically, larger ISP’s have low operation costs since they get their technology at a bargain.Marketing and Sales - HIGH• Customer perception of product is entirely through marketing of the product. Hence, Marketing and Sales have a relatively high priority.Services - LOW• Services have a low priority since, they do not serve a niche market but a more generalized market.
Secondary ActivitiesProcurement - LOW • Procurement is easy once there’s infrastructure in place, since a single long lease from a telco is generally sufficient.Human Resource Management – LOW • Human Resource management is not very important for companies of the size of Hathway since they have a sufficiently large amount of technical backup staff.Technology Development - HIGH • Frequent changes in standard technology implies that Technology Development is a necessary cost for an ISP.Infrastructure - HIGH • Frequent expansions require a lot of infrastructure development. This is quite important in a company of Hathway.
Value Chain Order: Primary Activity rank: Marketing and Sales > Inbound Logistics = Outbound Logistics > Services > Operations Secondary Activity rank: Infrastructure > Technological Development > Procurement > Human Resource Management
VRIO Analysis If a firm has resources that are: Valuable Rare, and Costly to Imitate and, The firm is Organized to exploit these resources Then the firm can expect to enjoy a sustained competitive advantage.
Factors to look at in the VRIOanalysis: Experience in ISP market Known name Innovation Business contracts/Peering agreements Experienced personnel Network management and economics knowledge
VRIO Analysis of strengths of thecompany:Experience in ISP market – Not very ValuableKnown name - ValuableInnovation – Not very ValuableBusiness contracts/Peering agreements - ValuableExperienced personnel – ValuableNetwork management and economics knowledge - Valuable
Value Analysis of… Known name: This strength is valuable since a customer is more likely to subscribe to a known name than to an unknown name, therefore leading to an increase in revenue. Business Contracts: These are a constant source of ‘confirmed’ revenue and are thus very valuable. Experienced Personnel: These people often set higher standards in research labs by providing breakthrough technologies giving the company a competitive advantage.
Value analysis of… Network Management and Economics: With lots of data at hand, setting competitive tariff plans that work is much easier, therefore, getting a larger customer base.
Rarity Analysis of…. Known name: Not very rare in the industry as such. Business Contracts: Again not rare enough to have a competitive advantage in the industry. Experienced Personnel: These people are a rarity in the industry as such. They can sometimes provide a competitive advantage. Network Management and Economics: Again not much of a rarity since a lot of competitors have data as well.
Imitability Analysis of…. Known name: Not imitable. Experienced Personnel: Not imitable. Can be imitated by ‘stealing’ or ‘poaching’ people from ‘start-ups’ or smaller companies. Other competitors can do this as well.
Organizational Analysis of… Known name: Organizational hierarchy allows hathway to maximize its advantage. Experienced Personnel: High premiums and high positions in Organization in Hathway allow Hathway to maintain this advantage.