Manufacturing Report 2015: Overcoming the Five Barriers to Business Growth
NII Holdings Marketing Plan
1. NII HOLDINGS
A Situational Analysis and Solution
Kyle Hadeed
BA 301 Final Term Paper
Section 001
06/03/2015
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EXECUTIVE SUMMARY...................................................................................................4
SITUATIONAL ANALYSIS ................................................................................................6
COMPANY OVERVIEW..............................................................................................................6
BUSINESS STRATEGY................................................................................................................6
MISSION,VISION,VALUES ........................................................................................................7
Mission Statement...........................................................................................................7
Vision............................................................................................................................7
Values............................................................................................................................7
STAKEHOLDERS OF NII HOLDINGS ...............................................................................................8
FINANCIAL PERFORMANCE ......................................................................................................10
MARKET SHARE....................................................................................................................12
SWOT ANALYSIS..................................................................................................................13
FUTURE OUTLOOK ................................................................................................................15
INFLUENCES ........................................................................................................................15
PROBLEM ANALYSIS & DESCRIPTION.......................................................................15
PROBLEMS..........................................................................................................................15
Loss of Subscribers.......................................................................................................16
Low Market Share ........................................................................................................16
Decrease in Operating Revenue.....................................................................................16
Revenue Per Subscriber................................................................................................16
Increase in Total Customer Turnover Rate.....................................................................17
Increase in Currency Rate in Argentina .........................................................................18
PROBLEM STATEMENT ...........................................................................................................18
Assessing the Root Causes of the Problem......................................................................19
Lack of Variety of Technology.......................................................................................19
Low Capital Compared to Competitors..........................................................................19
Loss of Subscribers.......................................................................................................20
Lack of Competitive Edge..............................................................................................20
Fishbone Diagram........................................................................................................21
SOLUTIONS......................................................................................................................22
SOLUTION ANALYSIS..............................................................................................................22
Sell Mexico Market to AT&T and Allocate Funds to Brazilian Market..............................22
Widening to New Services supported by WCDMA network ..............................................23
Marketing and Promotion Plan .....................................................................................24
WEIGHTED DECISION MATRIX..................................................................................................25
Effect on Stakeholders...................................................................................................25
Potential Risk...............................................................................................................25
Long Term Financial Impact.........................................................................................25
Total Cost....................................................................................................................26
RECOMMENDATION ......................................................................................................26
GOAL OF SOLUTION...............................................................................................................27
ETHICAL SCREEN...................................................................................................................27
COST BENEFIT ANALYSIS.........................................................................................................27
FEASIBILITY .........................................................................................................................29
IMPLEMENTATION PLAN..............................................................................................29
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Executive Summary
NII Holdings is the telecommunications company that is a branch of Nextel. They
are in three markets; Brazil, Argentina, and Mexico. While NII Holdings is active in
trying to expand their market share and revenue, sales have shown otherwise. Through
out the last four years, total revenue has continued to plummet. This paper will show why
their financial performance has been poor, possible solutions to improve market share, as
well as a final recommendation to help increase market share- That NII Holdings should
launch a Marketing and Promotion campaign.
A company overview will help you give you an in depth analysis in why NII
Holdings is continuing to be in the red. NII Holdings mission, values, vision, and
stakeholders will be introduced to help understand what the company is known for.
An overview of NII Holdings financial performance, along with their Swot
analysis will give a better picture into why they are failing and what they should do to
turn their company around. We will indulge in brief overview of the industry along with
the future outlook of the telecommunications market. This will give a better
understanding in why problems are present.
A fishbone diagram was used to understand what problems NII Holdings is facing,
and why they have continued to have low market share. Stated below are the problems in
the fishbone diagram
Lack of variety of technology
Low capital compared to competitors
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Loss of subscribers
Lack of competitive edge
Three solutions were considered in fixing the problems that they are facing. Below,
are the solutions that were looked at.
Create a Marketing and Promotion Campaign
Sell Mexico Market
Widening to New Services supported by WCDMA network.
These three solutions will be compared in a weighted decision matrix and the one
with the highest score will be the final recommendation. Along with finalizing a specific
solution, a cost benefit analysis will be presented to show the tangible and entangle
benefits and costs of this solution. An ethical screen will be shown to show how the final
recommendation affects their values. A feasibility analysis will also be presented in
showing how easily this solution will be implemented.
Finally, an implementation plan will be conducted to show what would be need to set
this plan in start. Along with an evaluation strategy to show how well the
recommendation helped NII Holdings.
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Situational Analysis
Company Overview
NII Holdings is a telecommunications company that is a subsidiary of Nextel.
They provide wireless communication services in three major countries; Brazil,
Argentina, and Mexico. (NII Holdings 10-K 2014). NII Holdings uses the IDEN
network, developed by Motorola that targets businesses and consumers that are in the
middle to upper class. (NII Holdings 10-K) NII Holdings currently employees 9,800
employees, and their corporate office is based in Reston, Virginia. They were created in
December, 2001 and branched as their own entity. They are committed to product
development and are strategically expanding in their regions.
(NII Holdings 10-K 2014)
Business Strategy
NII Holdings is a provider of differentiated mobile communication services
operating under the Nextel brand in Latin America, focused on providing businesses and
high value consumers with fully integrated wireless communication tools, superior
customer service and an expanding network footprint. (NII Holdings About Us)
NII Holdings targets high valued customers and business with their Postpaid
Offerings. They believe with doing so, they will generate higher revenue and a higher
profit margin. They depend on their brand reputation to be the market leader. Customer
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service and expanding their product portfolio to help attract new customers is how they
make NII Holdings stand out. NII is dedicated to provide great quality network, for
example, the recent change to add 3G to their expanding network. In order to do all of
this, their goal is to hire and retain the best possible talent around them.
Mission, Vision, Values
MissionStatement
NII Holdings is the Preferred Provider of Superior and Differentiated Voice and
Data Solutions to High Value Customers in Latin America. (NII Holdings About Us)
Vision
NIIs vision is continuously moving forward in the region by strategically growing
its business and evolving to next generation network platforms. (NII Holdings About Us)
Values
NII Holdings main value is to help aid the community through programs that help
benefit families. Listed below are the programs NII Holdings has supported throughout
the years.
Habitat for Humanity International (HFHI)
Ronald McDonald House
Reston Interfaith Inc.
The International Red Cross
The United Nations Children’s Fund (UNICEF)
World Education and Development Fund
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They also participate in “Inova Blood Drives, the Susan B. Komen Breast Race for
the Cure, Southgate Community Initiative, Arlington Food Assistance Center, and the DC
Help the Homeless Walk.” (About us NII Page). With contributions, employee
commitment, and sponsorships, NII was given the Best of Reston Award for outstanding
community service. Also in 2014, Nextel Brazil, which is the main branch of NII won the
“Socially Responsible Company by the Mexican Center for Philanthropy (Cemefi) and
the Alliance for Social Responsibility (AliaRSE) for the 10th consecutive year.” with
winning these awards, it shows that they are a credible company that lives by their values
and takes responsibility in aiding the community.
NII Holdings vision and business strategy connects in various ways. Their main vision is
to provide great quality network to help accelerate their growth. With updating their
services and products, they are trying to make a push to control more market share in the
industry. Their strategy was to provide a 3G network to consumers, and their vision in the
past was to do so. Their strategy is to continue to grow their network, and obtain more
subscribers within the Latin America market.
Stakeholders of NII Holdings
Argentina: There are 1,954,400 subscribers in Argentina, which is 21.28% of NII
Holdings total subscribers. With having these subscribers, they have renovated over
$424,971,000 in total revenue. NII Holdings employs 1,194 individuals throughout
offices located in the Buenes Aires area.
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Brazil: This country has 4,341,500 total subscribers, which is 47% of NII
Holdings subscribers. With Brazil having the most subscribers from Argentina and
Mexico, their total revenue is the highest at $1,848,918,000.
Mexico: With the remaining subscribers (2,888,500), Mexico holds 31.5% of
NIIs customers. This past year, revenue was $1,417,163,000, which was the second
highest revenue within the three countries.
United States, Virginia: Employees at the headquarters of NII Holdings are
locating in Virginia
Two Brazilian Banks: NII Holdings Inc. owes $343,915,000 to the banks. If NII
Holdings fails to pay their debt, the creditors will lose their invested income. (NII
Holdings 10K 2014)
Shareholders: 60,000,000 shares of authorized common stock and 10,000,000
shares of preferred stock distributed to shareholders. With a decline is stock; there is a
decline of shareholders wealth. (10K)
Employees: NII Holdings employees over 9,800 individuals throughout four
countries (NII Holdings 10K 2014)
Motorola: NII carries Motorolas services and products for their consumers.
Various Organizations:
Various Organizations: Habitat for Humanity International (HFHI)
Ronald McDonald House
Reston Interfaith Inc.
The International Red Cross
The United Nations Children’s Fund (UNICEF)
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World Education and Development Fund
NII Holdings donates to these programs to help families and children within a
community. (Social Responsibility)
Competitors: NII Holdings takes away market share from America Movil, and
Telefonica (NII Holdings 10K 2014)
Financial Performance
Below is the Consolidated Statements of Comprehensive Loss (NII Holdings 10K 2014)
Since the end of year 2012, NII Holdings has been in a financial crisis. Operating
revenues have decreased and half almost have gotten cut in half. Operating costs have
been steadily the same, but with them not cutting down on their costs, their net loss keeps
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on growing. ach year, their comprehensive loss has grown, and is now 2,322,974 at the
end of the 2014 fiscal year.
From the year-end 2013 to 2014, there was a decrease in sales by 23.69%. However,
costs of goods sold have relatively stayed the same. This is a basic financial downfall. A
company cannot grow and succeed at an unsustainable revenue to expenses
turnover. This dramatic financial ratio is the beginning of the downfall and eventually
led to the bankruptcy of NII.
Taking a deeper look into the expenses of NII, the SG&A naturally decreased,
however the expenses of handsets and accessories had dramatically increased. This could
possibly be due to the devaluation of the U.S. dollar compared to its value from 2013 to
2014.
In 2013, there was a substantial difference in cash flow; this was mainly due to
the 1,600,000 issuance of senior notes. This dramatically changed the ending cash flow
balance and created a gap of 66.85% from 2013 to 2014. The issuance of senior notes
was mainly used to create another source of equity and having available cash flow for the
company to use in different areas of operation. This was good, however, only for a
temporary time.
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Now, we take a look at the ratios to see the personal side of the operations. A key
statistic is the net income per employee. This ratio depicts the level of productivity each
employee brings to the table. With a ratio of -181,358, it shows that either the company
has employed too many employees and has overcompensated, or the level of productivity
per employee has suffered so much that it is unsustainable. Either way, the rough ratio
falls on the management by not training the employees enough to sell efficiently or over
employed the staff needed to handle the demand.
Another distinct attribute that made a drastic impact on cash flow was the income
tax deferred.
Market Share
NII Holdings Inc. has a low market position in the telecommunications industry.
Within Latin America’s three countries; America Movil and Telefonica controls Mexico,
Argentina, and Brazil.
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Below are statistics for each company of the market share in Mexico, Argentina, and
Brazil.
SWOT Analysis
By looking at NII Holdings SWOT report, there are strengths, but many
weaknesses. As shown below on the table, the only strengths this company has is having
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a robust service portfolio, and spectrums in key markets. NIIs weaknesses are more
extreme, compared to their competitors. As stated, they have a lack of geographic
presence, compared to Telefonica and America Movil. NII Holdings holds such a small
percentage of market share and are threatened by these corporate giants where they are
limited to grow. Each year, total subscribers have depleted while their competitors
subscribers continue to rise. Motorola is the only provider of technology NII has, which
makes them very limited.
(NII Holdings SWOT Report 2014)
The telecommunications industry in Latin America is on a path to grow. Listed
below are statistics on the outlook of this industry.
-3G/4G connections to increase 80% by 2020
-By 2020, 300,000 more jobs will be created. Making the total to 1.3 million.
-Forecasting 605 million smartphone connections, compared to 165 million from 2013.
-Subscriber growth will increase 7% by 2020, to 390 million.
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Future Outlook
Based on the future outlook of this industry, all companies will be impacted in a
great way. With more subscribers and increased technology, NII Holdings will be able to
add products and services to their portfolio that will bring in new customers. The demand
for telecommunications will continue to rise, and there will be a great opportunity for NII
to expand its customer base and bring back its old subscribers.
Influences
The major external influence that will affect the telecom industry, as well as NII
Holdings is the future advancements in technology. By 2020, majority of Latin American
countries will convert from 3G to 4G. NII will have to make the jump to 4G to continue
to compete with other companies that will provide this network. Not only that but, more
and more smartphones will be supplied to consumers, and NII’s main form of technology
is Motorola. They will have to branch out and look into the smartphone market, such as
IPhone and Samsung smart phones.
Problem Analysis & Description
Problems
NII Holding is facing five problems that have impacted their financial
performance, loss of subscribers, decrease in revenue, high customer turnover ratio, and
currency changes. One main problem has been selected as a problem statement, and will
be discussed later in the analysis.
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Loss of Subscribers
NII Holdings overall net loss subscribers between the year end dates of
12/31/2013 and 12/31/2014 are 61,400. Brazil is the only country where they have
increased subscribers, with an overall growth of 383,300. (NII Holdings Annual Report
2014). Mexico and Argentina’s subscriber base has declined tremendously. Between the
two countries, a total of 440,700 subscribers have been lost. (NII Holdings Annual Report
2014) With a decline in subscribers, market share and overall revenue have declined.
Low Market Share
NII Holdings has an extremely low market share compared to their competitors.
The companies America Movil, Telecom Italia, and Telefonica hold the majority of the
market in Brazil, Argentina and Mexico. Listed below is a table showing the percentage
of market share owned by each company and its two main sectors.
Decrease in Operating Revenue
In 2013, operating revenues were $4,711,567 (In thousands). While in 2014, total
operating revenue dropped to $3,688,720 (In thousands). (NII Holding Annual Report
2014). Shown below is NII Holdings target revenue for each quarter. They did not reach
any of their revenue goals, and fell short $230 million dollars. Shown below is the NII
Holdings target
Revenue Per Subscriber
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According to NII Holdings June 2014 Swot Analysis, earnings per subscriber
have dropped from $39 in the beginning of 2013, to $29 in the first quarter of 2014.
Most due of this is due to the competition within these three markets and customers
choosing lower cost plans.
Increase in Total Customer Turnover Rate
NII Holdings has shown a drastic increase in customer turnover ratio from the
year ending 12/31/2013 to 12/31/2014. The two tables below illustrate the turnover ratio
categorized by country and two different networks.
The following graph depicts the turnover ratio in 2013
(NII Holdings 10-K 2014)
The following Graph depicts the turnover ratio in 2014
(NII Holdings 10-K 2014)
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Overall customer turnover has increased by .26%. With high rates of customer
turnover, NII Holdings abilities to become profitable will decrease. With losing
subscribers, there will be a loss of revenue and cash flow, and will require sales
commission expense to attract replacement customers. The costs of acquiring a new
subscriber are much higher than retaining previous subscribers. (NII Holdings Annual
Report 2014)
Increase in Currency Rate in Argentina
From 2012 to 2014, NII Holdings has been negatively affected by the devaluation
of the Argentine peso. This is shown in the graph below, however, if not researched; this
does not seem like a problem when looking at the income statement of NII Holdings.
Knowing this information can drastically change the financial outlook of NII Holdings.
Between the year-end dates of 12/31/2013 and 12/31/2014, the Argentina market has lost
a total of 33% of their revenue. (NII Holdings Annual Report 2014)
(NII Holdings 10-K 2014)
Problem Statement
As a result of inefficient growth in the amount of subscribers; and a lack of
competitive advantage, NII Holdings has failed to compete with their key competitors,
and has lacked market share in Brazil, Argentina, and Mexico. Since 2012, Brazil’s
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market share has gone down from 1.67% to 0.54%, Argentina has shown no growth with
an annual market share of 3%, and Mexico has shown no growth at 4%.
Assessing the Root Causes of the Problem
A fishbone diagram was created to find the main causes in why NII Holdings has
had a depleting market share. All of the causes will be explained in this paper.
Lack of Variety of Technology
NII Holdings depends on one form of technology, which is IDEN Motorola. The
spectrum that a NII Holdings use is noncontiguous, which only the IDEN technology is
compatible with. They are restricted into using this one form of technology, even if they
want to expand into a different variety of technology. There are more individuals that are
seeking a diverse field of technology where they can have different options. (SWOT
Analysis 2014) If Motorola fails to deliver their technology system equipment on time, it
cannot service its existing customers and cannot obtain new consumers. (SWOT
Analysis) With the dependence of this one form of technology, NII is limited in buying
future equipment that could be more enhanced, if not obtained, will decrease their
revenue in the future.
Low Capital compared to Competitors
Low Capital Compared to Competitors
Compared to its competitors, NII Holding has very low capital. In 2013, total
revenue was $4,772,600. While looking at Telefonica, their companie’s revenue was
$79,135,000 and America Movil’s was $60,385,500. (Swot Analysis)
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With having low capital to work with compared to their competitors, they have
much lower financial and marketing resources to reinvest back into their company to help
it grow. They cannot take on a larger customer base, and their spectrum positions will
continue to stay low. With having such low revenue, profitability will be lower than
Telefonica and American Movil, even if our profitability percentage is better. They have
more access to funds and would have lower costs of financing, rather than us, dealing
with high interest.
With being so limited in capital, we are not be able to expand our coverage’s to
other countries, and will be limted to the markets that we are already in. Due to our
competitor’s capital, they have provided larger service coverages areas and have taken
most of the market. (NII Holdings Annual Report 2014)
Loss of Subscribers
Loss of Subscribers
NII Holdings has lost 61,400 subscribers from the year-end dates of 12/31/2013 to
12/31/2014. (NII Holdings 2014 10-K) Although, this may not seem like a lot, while
looking at a successful company you must depend on a small growth, rather than a loss of
customers.
Lack of Competitive Edge
NII Holdings competitors have done a wide variety of strategies that have
increased their market share, while decreases NII’s. NII Holdings depends on their
handsets to create revenue. Their competitors such as Telefonica and American Movil
have more handset subsidies than them. With offering high commissions to distributors,
NII Holdings competitors will have the competitive edge to obtain new technology and
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handsets faster. NII Holdings is strictly restricted to Motorola handsets, while their
competitors are using a broader range and different forms of them that will drive
customers to their company. (NII Holdings 2014 10-K)
While NII Holdings does not have the capital to expand their networks and provide
strong network coverage, their competitors are able to do that, and will continue to gain
more customers. Also, competitors have provided discount or free airtime to their
customers, while NII is not able to, due to lack of funds.
Telefonica and American Movil have offered incentives to large customers to
switch to their network by buying out the current contracts of their consumers, and
providing no fees. Also, have offered bundled telecommunications services that NII does
not have.
Our competitors, due to us not holding the rights to use other spectrums, dominate
the Argentina market. Without using other spectrums it is impossible to enhance their
services with new technology. (NII Holdings 2014 10-K)
Fishbone Diagram
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Solutions
Solution Analysis
Three solutions have been have been created to address the problem of declining
market share and an overall low market position. These solutions are to give NII
Holdings the opportunity to increase market share in Brazil, Mexico, and Argentina.
Sell Mexico Market to AT&T and Allocate Funds to Brazilian Market
With selling the Mexico market to AT&T, NII Holdings will receive funds, and
will dedicate those funds in the Brazil market. From the three markets that NII is in,
Brazil has the most room to grow. They have less than 1% market share, but yet, they
generate the most sales for NII Holdings. A portion of the funds will be used to create
more neurotransmitter towers. As of this year, NII Holdings has 9,157 total sites to
provide communication within their network. (NII Holdings 10-K 2014) 3,000 more sites
will be distributed around Brazil to have a overall, better communications connection.
Not only will they will build new towers, they will be offering new higher speed
services. As of now, Brazil is offering 15 Mhz on average connection, while their Mexico
and Argentina markets are operating at 20-22 Mhz, respectfully. With generating a higher
range of Mhz, customers will be more attractive to stay with NII, along with attracting
new consumers to make a switch to their company. With the new found capital, this
allowing NII Holdings to uphold its current rates for its products. They will be able to
provide more efficient speeds, while keeping their prices very low. This makes their clear
object to increase their market share.
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Widening to New Services supported by WCDMA network
NII Holdings success is based on the products that they offer their consumers.
Having insufficient products with unreliable speeds is what differentiates NII Holdings
from their competitors. Offering more efficient products can drastically alter the position
NII Holdings is currently in.
As of now, NII holdings use 3G services; this limits their capability to compete
with their competitors. There are two key services that NII Holdings will add to their
portfolio that will increase the potential to gain market share.
The first service they will integrate in their systems will be 4GLTE. LTE has the
capability to deliver fast, efficient data speeds up to 1000Mbps in the downlink, and
50Mbps in the uplinks (GSMA About Us). Implementing this technology will give NII
Holdings a competitive edge in offering the fasted growing service in the
telecommunications market to customers that are only offered slower speeds.
The next service that NII Holdings will incorporate in their systems will be the
feature, Roaming. With roaming, consumers will have the capability to make and receive,
phone calls and texts out of their home network. The consumer would only have to use
their regular phone number that will have the availability to work in 219 countries. This
drastically broadens their target market and offers consumers a useful feature in everyday
product use. (GSMA About Us)
The addition of these two technology services will not give NII Holdings the
competitive edge against their competitors, however it will level the playing field.
American Movil (NII Holdings leading competitor) has and will continue to offer
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roaming services to its consumers. With NII Holdings not offering roaming services, this
gives them an opportunity to reach the same level of products its competitors offer.
Marketing and Promotion Plan
As of 2014, NII Holdings has allocated a total of 573,844,000 dollars to their
marketing expenses. (NII Holdings 10-K 2014) This clearly shows that they are not
using their funds efficiently. A new marketing plan will be implemented, which will be
more effective, and will generate them more market share.
To generate more subscribers, NII Holdings will offer a buy-out for any
customer’s contracts from competitors to make them take their business to NII Holdings.
The consumer will need to bring in their contract information, along with their cell
phone. Once this is completed, NII Holdings will buy out the contract and offer their new
customers their services.
There will be no contracts and no service fees. Customers will be able to have an
open contract with NII Holdings, unlimited talk and text, with 10g of data for $50. There
will be an additional $35 for each line added to the customers account.
Even without a contract, the rates for each consumer will stay the same from the time
they switched to NII Holdings. There will be no increase in price to the customers
account, unless they would like to add additional lines or data.
In order for potential customers to hear about this offer, NII Holdings will implement an
online advertising campaign to promote the new promotional offerings. This will include
advertising on social media, as well as internet ads and television commercials. With the
advancing technological breakthroughs, NII Holdings will be able to reach a broader
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audience, thus increasing their customer and base and market share within these
geographies.
Weighted DecisionMatrix
A weighted decision matrix was used to provide which solution NII Holdings
should implement. The information below will provide will provide the criteria used,
along with the weight that was given to them. The solution with the highest decision
matrix score will be the one they use.
Effect on Stakeholders
In order for a business to grow and succeed, it’s stakeholders, which range from
employees to stockholders, must believe in the companies long term goals. With the new
goals and plans in place for NII Holdings, these stakeholders will have a renewed view
on the potential growth and success of the company. For this reason, effect on
stakeholders was given a weight of .15
Potential Risk
Whenever a company decides to take on a new initiative, there are always risks
that might be detrimental to those plans. With potential plans to take place, it will either
help their financials or hurt them. With this being the case, risk should be considered with
picking which plan to chose from. That is why potential risk was given a weight of .25.
Long Term Financial Impact
NII Holdings revenue has decreased throughout the last four fiscal years. If
nothing is implemented correctly, revenue will continue to decrease. The effect on the
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long-term financial impact will be crucial and will and is most important in deciding on a
solution. This is why long-term financial impact was given a weight of .40.
Total Cost
With NII Holdings filing for Chapter 11, it is known that they need have the
lowest costs possible. The potential reallocation of costs within the business will be
useful and executing the plan to get NII Holdings back in the black. This is why total cost
was given a weight of .20.
Weighted Decision Matrix
Recommendation
The solution with the highest weighted decision matrix score was to implement
the marketing and promotion plan.
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Goal of Solution
The goal of this solution is a total revamp of NII Holding complete marketing and
advertising plan. Along with the recommendations that I have stated above, which
included a plan buyout proposal and a more basic pricing policy, I look to overhaul the
entire marketing campaign. The amount of marketing and advertising dollars NII
Holdings has allocated to this sector has not shown its value, meaning different strategies
have to be made. Every market has different means of connecting to its potential clients,
with market share decreasing in Brazil, it creates a correlation that the strategies they are
implementing are ineffective.
With the promotion and marketing plan taking place, it will give NII Holdings the
opportunity to expand their customer base, along with increasing market share. With an
increase of subscribers, more revenue will be generated, which will give NII Holdings the
ability to retain and attract more customers in the future.
Ethical Screen
Based on NII Holdings ethics, this recommendation does nothing that will affect
employees or any other organization. This recommendation ties into their ethics by
providing create customer service to customers, along with a plan to improve the business
as a whole for their shareholders.
Cost Benefit Analysis
Tangible Benefits Tangible Costs
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Increase subscriber base
Increase in Revenue
$573M marketing plan as a whole
Total cost of marketing employees
Intangible Benefits Intangible Costs
Increase in brand awareness
Increase in market share
Potential risk in losing customers
Losing average revenue per customer
It will be hard to estimate the total increase in subscribers and revenue. If the
customer base expands, revenue will expand. There will be a great benefit in our market
share with the success of this solution. NII Holdings is sitting at the far bottom compared
to its competitors American Movil and Telefonica. Market share will be taken away from
those two giants and impact our company for the better. Along with our potential increase
in market share, with implementing this marketing and promotion plan, our brand
awareness will increase. More consumers will know about NII Holdings and what they
have to offer.
There will be a 573 million dollar marketing budget as a whole. This was NII
Holdings budget last year, and all the funds will be allocated in Brazil, Argentina, and
Mexico. With revamping and creating a new plan, the total cost of our marketing
employees will increase. The potential risks that NII Holdings will face is losing
customers, as well as losing the average revenue per customer. With having lower rate
plans, consumers will have the ability to select those options and their total bill will
decrease.
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Feasibility
This plan will be easily feasible for NII Holdings to implement. It will take a short
amount of time to generate this solution, as long as there is a set schedule. Funds will be
available due to the fact that NII Holdings is using the same marketing budget (573M) as
the last fiscal year. There is potential that the marketing budget will decrease assuming
that NII Holdings marketing strategy will be more efficient with its budget.
Implementation Plan
The new marketing plan will be designed strictly on the Brazilian population. The
implementation of the new marketing strategies will take approximately 2-3 months,
during this time period, NII Holdings will generate a marketing team of local Brazilians
will help us understand the culture and create the most efficient paths to reaching our
target market. The new marketing strategy will include advertising resources such as
YouTube ads, Internet banners and social media ads will help brand recognition in Brazil.
Creating a new pricing policy is almost ineffective if we do not broadcast it to new
customers, a main reason why a new marketing and advertising strategy is so large. There
will be slit risk during those several months because marketing will be down to a
minimum while our research team develops the most efficient and cost worth strategy to
reach new cliental.
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SuccessMetrics
Evaluation
To make sure this solution is a success, there will be an evaluation process while
the solution is taking place. Once the plan is implemented, each new customer that joins
NII Holdings will be put in a database along with their rate plan. There is a set goal of an
increase of 5% of subscribers within the two to three months after the new strategy has
been implemented. If that goal is met, the continuation of the marketing plan will strive.
Along with an increase in subscribers, NII Holdings is hoping for a revenue
increase of 3 million dollars each month. The software that will be used will depict
whether or not that goal is met.
31. 31
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