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43745905 fom-bharti-airtel-shivam

  1. 1. JAIPURIA INSTITUTE OF MANAGEMENT, LUCKNOW A STUDY ON BHARTI AIRTELDate: 02/August/2010Submitted By: Submitted To:Stuti Agarwal (JIML-10-FS-043) Dr. Manisha SethUdayan Gulati (JIML-10-FS-049)
  2. 2. Shobhit Agarwal (JIML-10-137)Shivam Ramchandani (JIML-10-FS-041) TABLE OF CONTENTS Digital TV Services....................................................................................................7 Telemedia Services.....................................................................................................7 Airtel follows the “Situational and Participative Leadership Styles” which shows that leaders must adjust their leadership style according to the situation as well as to the people being led. The Company makes effort to make the employees participate in the management process and also prepares them for the future events and odd situations. .......................................................................................................................................14Controlling Process..........................................................................................................14 Expansion of the organization: A growth of a company tends to have very profitable reinvestment opportunities for its own retained earnings. Thus, expansion of an organization is very important. For e.g. Airtel Connects with Africa – to become the first Indian brand to go truly global......................................................15Reduction of Environmental Effects: Environmental issues have becomeincreasingly more important the last decade. It is of great importance to reduceemissions of green house gases (GHG) and the transport sector contributes to alarge part of GHG emissions. Longer transport time contribute to higher capitalcost of goods during transit. For e.g. Airtel is making efforts to reduce the cost oftransportation by 3%. The company has taken measures to control the high pricesof raw material due to long routes of transport............................................................15Topics:Introduction 3History 4Market Position 5Social Responsibility/Ethics 6Vision/Mission/Goals 7Planning Process 8 2
  3. 3. SWOT Analysis 9Organising/Organizational Chart 10Organising Culture/Motivational Aspects/ Types of Leadership 11Controlling Process 12Controlling Measures 13Summary of the Report 14Observation of the Report 15References 16Appendices 17-19 ACKNOWLEDGEMENT Perseverance Inspiration and motivation have always played a keyrole in the success of any venture. So hereby it’s our pleasure to recordthanks and gratitude to the people involved. Firstly, we thank to our subject teacher Dr. Manish Seth for herencouragement, continuous support and help in completing the study atBharti Airtel Limited. And Special thanks to Mr. Chakraborty for always ready to listenand give advice. 3
  4. 4. At last, thank to my parents and friends for being so supportive &being my inspiration on this project. 4
  5. 5. INTRODUCTIONAirtel is one of the India’s leading providers of telecommunication services with anationwide presence in all the 23 licensed jurisdictions (also known as Telecom Circles).Airtel served an aggregate of 88,270,194 customers as of December 31, 2008; of who85,650,733 subscribe to our GSM services and 2,619,461 use our Telemedia Serviceseither for voice and/or broadband access delivered through DSL. Airtel is the largestwireless service provider in the country, based on the number of subscribers as ofDecember 31, 2008. They also offer an integrated suite of telecom solutions to ourenterprise customers, in addition to providing long distance connectivity both nationallyand internationally. They have recently forayed into media by launching our DTH andIPTV Services. All these services are rendered under a unified brand “Airtel”. Thecompany also deploys, owns and manages passive infrastructure pertaining to telecomoperations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of IndusTowers Limited. Bharti Infratel and Indus Towers are the two top providers of passiveinfrastructure services in India.In this report we are observing the Business from a “Management Standpoint”.Successful businesses have extensive knowledge about their customers and competitors.Getting accurate and specific information about your customers and competitors is acritical first step in market investigation and development of a marketing plan. Accuratemarket assessment and development of an effective plan is critical to the success of bothnew and existing businesses. The market impacts and directs all aspects of the companysactivities and ultimately will lead to success or failure of the business.In developing a market plan, your primary functions are to understand the needs anddesires of your customer select or develop a product or service that will meet customerneeds, develop promotional material that will make the customer aware, and ensureproduct or service delivery, and this is what the report is all about. We are describing the“Management Process, Decision Making Process, Planning Process” and othertechniques of Business/Company. 5
  6. 6. Bharti AirtelHISTORYBharti Airtel is India’s no.1 reliable network, serving at around 88 million voice & datauser subscribers. The need of research study is to study about Bharti Airtel,understanding its various strategies that keep it ahead of all other competitors likeVodaphone, Idea, and Reliance etc. This study is undergone through various steps ofresearch project. The method used for the research project are- Group Discussion,internet browsing, different graphs & chart study etc. From this analysis we found thatBharti Airtel has the largest market share due to its calling plans, Tariff plans and otherstrategies.Some of the key points are:• Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises.• Bharti Airtel, formerly known as Bharti Tele-Ventures Limited (BTVL).• Indias largest and worlds third largest cellular service provider.• More than 88 million subscribers as of 31 December 2008.• Airtel provides mobile & fixed wireless services using GSM technology across 23 telecom circles.• Largest Telecom Company listed on Indian Stock Exchanges.• The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.• On 19 October 2004, Airtel announced the launch of a Blackberry Wireless Solution in India. The launch is a result of a tie-up between Bharti Tele-Ventures Limited and Research in Motion (RIM). 6
  7. 7. Market Position of the CompanyShare value of the company: 322.55*Volume 1,893,379Previous Year Close 320.35Days H/L (Rs) 324.30 - 317.5552wk H/L (Rs) 467.00 - 229.50Market Cap (Rs Cr) 122,488.36Revenue US$ 7.254 billion (2009)Operating income US$ 2.043 billion (2009)Net income US$ 1.662 billion (2009)Total assets US$ 11.853 billion (2009) (Fig. 5 shows the financial statements)Services by provided Bharti Airtel:Airtel Communications ServicesPrepaid Connections Blackberry Wireless InternetPostpaid Connections Smart phones International Calling CardsDigital TV ServicesThe Digital TV business provides Direct-to-Home (DTH) TV services across India underthe brand name Airtel Digital TV. It started services on 9 October 2008.Telemedia ServicesThe Telemedia business provides services in 89 Indian cities and consists of two brands.Airtel Broadband provides broadband and IPTV services. Airtel provides both capped aswell as unlimited download plans. The maximum speed available for home users is16Mbps. 7
  8. 8. Social Responsibilities"As a first step towards fulfilling the vision of the Government and the leadership of thecountry, Bharti has kick-started it’s voluntary and affirmative action in makingsignificant contribution to provide education to the weaker sections of the society, so asto make them employable. We need to ensure that our children and young people haveaccess to quality education. Through Bharti Foundation we are determined to make asubstantial impact in this area.""As a responsible corporate citizen, we have decided to substantially scale up our existingprograms in the area of education, in order to support the aspirations of under-privilegedin the country."At Bharti Enterprises, there is absolute belief in quality education being the mostimportant tool for social and economic development in India. All educational programsinitiated by Bharti Foundation involve close partnerships with the government, policymakers, local communities and the general public.Bharti Foundation implements education programs in primary and higher education tohelp both holistic and academic development of underprivileged children and youthacross the rural pockets of India. The primary school program is designed to teachstudents to explore, question, reason and communicate effectively.Ethics • The partners will conduct all its dealings in a very ethical manner and with the highest business standards. • All partners with a business relationship with Bharti Airtel shall comply with the highest level of integrity and ethical practices. • The partners will provide all possible assistance to Bharti Airtel in order to investigate any possible instances of unethical behavior or business conduct violations by its employee. Partner will disclose forthwith any breach of these provisions that comes to their knowledge to allow for timely action in their prevention and detection. • Partners will adopt appropriate processes to prevent offering any illegal gratification in the form of bribes or kickbacks either in cash or in kind in the course of all dealings with us. Any instances of such violations will be viewed in a serious manner and Bharti Airtel reserves the right to take all appropriate actions or remedies as may be required under the circumstances. • All partners are required to confirm their compliance to ethical dealings on an annual basis by signing a certificate to this effect as per Bharti Airtels standard annual certificate. 8
  9. 9. VisionBy 2010 Airtel will be the most admirable brand in India. • Loved by more customers • Targeted by top talent • Benchmarked by more businesses. • First private telecommunications company to launch long distance servicesBy 2020: • To build Indias finest business conglomerate by 2020 • Supporting education of underprivileged children through Bharti Foundation • Strategic Intent: o To create a conglomerate of the future by bringing about “Big Transformations through Brave Actions.”Mission “We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more” • Innovative products and services • Cost Efficiency • Unified Messaging Solutions • We will meet the mobile communication needs of our customers through Error-free service delivery • Has a target of 125 million subscribers by 2010Objectives/Goals • To undertake transformational projects that have a positive impact on the society and contribute to the nation building process. • To Diversify into new businesses in agriculture, financial services and retail business with world-class partners • To lay the foundation for building a “conglomerate” of future. 9
  10. 10. Economic Scenario • GDP growth rate - Averaged around 7.9 % from 2002-2008 • Rising Tele-density – Target of 45% by 2010 • Growing per capita income/disposable Income • Rs 12000 in 2002 to Rs 33000 in 2008) • Falling Handset Prices • Moderate inflation levels which were prevalent during the past 7 years – around 5-6%PlanningPlanning for items/services is done at different time horizons. Long Term Planning Annual Planning Quarterly / Monthly Planning Daily Planning• Long Term PlanningThe time horizon is three years and it is strategic in nature. Strategic / privilegedpartners would be a part of the planning process and the long term plans would becommunicated to all partners. These plans would help partners to align their vision andbusiness model with Bharti Airtel and covers areas of business model, market drivers,supply chain alignment, technology and emerging trends.For e.g. Airtel planned for the products like “Lifetime Sims”.• Annual PlanningThe time horizon is one year and it is tactical in nature. Strategic / privileged partnerswould be a part of the planning process and the Annual plans would be communicatedto all partners. These plans would help partners to provide for resources in theirbusiness plan to support the requirements of Bharti Airtel.• Quarterly/Monthly PlanningQuarterly / Monthly plans are operational in nature. The plans would cover tentativerequirement of a quarter and confirmed requirements for a shorter period of time.These plans would include inventory levels, demand forecast and replenishmentrequirements. These plans would help partners to plan their operations.• Daily PlanningDaily Plans are at the execution level and would capture changes in the earlierplanning cycles. Partners need to adhere to the daily plans and make adjustment totheir long term / short term plans as per the changes communicated from time to time. 10
  11. 11. (Fig. 3 represents the Planning Process)Decision Making ProcessDecision making for each level is done at entirely at their level. This encourageseffective problem solving. Puri says: - As decision making goes down the chain, theproblem get appropriately addressed closest to where they arise. Sometimes in largeorganisation if the problem is at level 10, it gets solved at level 1 by time whichchanges colour and texture and the solution is bound to be less effective. Weoperationalised the decision making process. I often tell my teams, “Come to me with aproblem and a solution, not just the problem.”Changes the Company is facing in light of presenteconomic scenarioSWOT ANALYSISStrength • Market Leader • Recognized Globally • Strong Brand Image • Strong New Business Development team • Strong Financials • Largest Telecom Player 22.6%Weakness • Outsourcing of core system • Network CoverageOpportunities • Low Broadband Penetration, Rural • Telephony • Bharti Infratel – Cutting Down cost in rural area • Current Tele-Density – 30.6 is still low among developing countriesThreats • Falling ARPU • Intense Competition & Shortage of Bandwidth 11
  12. 12. • New Players coming in India • Uncertain Economic Condition (Fig. 1 & 2 shows the detailed information regarding the SWOT Analysis)Organizing“Organizing is the structural framework within which the various efforts are coordinatedand related to each other."Organization is one of the basic functions of management. Organizing is referred to ascreating a structure of relationship for the efficient management of the enterprise. In otherwords organization means a group of persons working together to achieve some commonobjectives. It is related with building up of a framework or structures of various interrelated parts. We can say that, organizing is a process consisting of a series of steps bywhich managers create a network of authority responsibility relationship. It helps thepeople to work together (relate to one another) for a common aim /objective.Airtel is an ideal organization because of following points:It has: • .Harmonious grouping of Functions .Clear division of Duties and Responsibilities .Reasonable span of control .Provision for growth and expansion .Specialisation of employee’s .Full use of man-power .Provision of two-way and effective communicationSteps/Procedures in the process of organizing: • . Identifying the work . Division of work . Assignment of duties . Grouping of activities . Delegation of authority . Co-ordination . Defining relationshipsOrganizational Chart of Bharti AirtelThis organizational chart gives a brief description of the levels of management in theorganization. The chairman and the managing director here is the head of theorganization i.e. they constitute the top level management. the next level is the presidentand CEO after the chairman who is again further sub-divided into various stages i.e. thepresident for various department such as mobile services, Telemedia, etc. below the 12
  13. 13. president are the directors of various other department present in the organization likecustomer services, supply chain, technology, etc. (Chart shown in appendices Fig.4)Organizational CultureBharti Airtel is a diverse multicultural organization with 48 nationalities representedacross its various businesses in 21 countries. Bharti has traversed a long way from itshumble beginnings as a bicycle component manufacturer to a multinational group presentin several businesses. Their values encompass: • Entrepreneurship: A core tenet for a first-generation entrepreneurial company. The company believes in providing people opportunities to do all that they can and be what they want to be. • Respect for all: Being respectful towards all whom we meet during our day-to- day professional interactions. • Passion for performance: Our journey would not have been possible without an enduring, bordering on fanatical focus on performance. This is what we also seek in our employees – a keen focus on outcomes through performance excellence. • Teamwork: We value “the power of many” and look to harness collective synergies through collaboration and teamwork. • Building collaborative partnerships: Forging strategic partnerships with eminent brands and companies from across the world - be it Singtel, Wal-Mart, AXA, Del Monte - is part of our DNA. Much of the work gets done by picking up the phone or popping into a team member’s cabin.Motivational AspectsThe Motivational Techniques followed by Bharti Airtel are of three kinds: • Arousal of behavior • Direction of behavior • Persistence of behaviorArousal of behavior relates to a specific thing that activates behavior.Direction of behavior relates to what is responsible for directing the behavior.Persistence of behavior relates to how the behavior is sustained.Type of Leadership 13
  14. 14. Airtel follows the “Situational and Participative Leadership Styles” which shows that leaders must adjust their leadership style according to the situation as well as to the people being led. The Company makes effort to make the employees participate in the management process and also prepares them for the future events and odd situations. (Fig.6 shows different types of leadership)Controlling ProcessStrategic Sourcing:Establishing a proper telecom sourcing strategy is the key to maintaining a successfulTEM program. Identifying the right sourcing partners will ensure service providersprovide an acceptable level of service with the commitment to ensure a long termrelationship that will bring mutual benefits. Ideally, a sourcing strategy should be madeup of a combination of established enterprise-wide telecom specific policies andprocedures together with experienced procurement specialists who understand thetelecommunications landscape. During the sourcing process, tariff rate benchmarking anddetailed contract negotiations with service providers should be conducted to ensure therelationship is mutually beneficial with long term implications. The result of propersourcing is the trickledown effect of savings that flow straight through the whole TEMlifecycle.Procurement:A proper procurement strategy should focus on service order management automationand processes that provide centralization and standardization to handle all servicerequests, service orders, and order tracking of products and services from within theenterprise. All service requests and orders should be tightly associated with theorganization’s inventory management system. Processes and workflow capabilitiesshould also be customized to provide optimal process models that meet each enterprisesunique business environment. Employing an effective procurement strategy will bringabout potential cost saving benefits, ranging from the elimination of ordering duplicateservice inventory to time-based cost savings from streamlined ordering and trackingworkflows throughout the procurement process.Bill Processing:Bill processing should be automated to handle the receipt, loading, audit, cost allocation,approval, payment, and tracking all telecom invoices within the enterprise. Withautomation, the processing of telecom invoices is simplified by providing a morestreamlined workflow with a consolidated view of all service provider expenditures in astandardized format across the enterprise. As a result, enterprises can see productivitygains from audited and approved bills being paid on time, the elimination of late paymentfees, streamlined headcount to load, process, and pay bills, and more granular trackingand cost allocations of all telecom spend activity within the enterprise. 14
  15. 15. Inventory Management:Inventory management is perhaps the most dynamic process within the whole TEMlifecycle. The management of inventory and its associated MACDs (Moves, Adds,Changes and Disconnects) is in constant flux. Thus, establishing a centralized andextensible process oriented inventory management system to capture and manage thischange is critical to ensuring optimal inventory best practices within the enterprise.Deploying an effective inventory management system will result in benefits such as theidentification of duplicate, unknown, or "zero use" inventory, more streamlined processesto manage all MACD activity, and the increased ability to track and monitor inventory toensure optimal use with maximum accountability.Reporting & Analysis:Reporting and analysis should be customizable and flexible to provide output views thatare relevant to all levels of the organization. Output formats should include onlinedashboard views, multi-format document export capabilities, and integration withexternal systems such as data warehousing and enterprise resource planning (ERP)systems. Multi-level security functions should also be implemented to ensure the rightparty with the assigned rights can receive and view their associated information.Control MeasuresExpansion of the organization: A growth of a company tends to have very profitable reinvestment opportunities for its own retained earnings. Thus, expansion of an organization is very important. For e.g. Airtel Connects with Africa – to become the first Indian brand to go truly global.Test Process Improvement: The products the Company manufactures are used in an area of the industry where errors leading to a stop in production can be quite expensive. Bharti Airtel lays emphasis on the improvement of the reports and harmonizes the documents and standardizes the documents. For e.g. Bharti Airtel announces Strategic Organization Changes for Future Growth.Reduction of Environmental Effects: Environmental issues have become increasingly more important the last decade. It is of great importance to reduce emissions of green house gases (GHG) and the transport sector contributes to a large part of GHG emissions. Longer transport time contribute to higher capital cost of goods during transit. For e.g. Airtel is making efforts to reduce the cost of transportation by 3%. The company has taken measures to control the high prices of raw material due to long routes of transport. 15
  16. 16. Summary of the Report This report on Bharti Airtel is done to find out certain objectivesregarding the strategic approach adopted by Bharti Airtel to stand strongly inthe competitive telecom market. Airtel’s marketing strategies are analyzedby using various models like SWOT Analysis, Organizational Chart,Porter’s Five Forces, Porter’s Generic Strategy & etc. The outcomes of these models are properly analyzed to findcompanies position in the market & various ways how company is survivingin this competitive market. This report on Airtel not just give us description about the companybut it also talks about the various marketing strategy adopted by thecompany. SWOT analysis of Airtel helps to find out the weak points of thecompany and to find out the way to overcome these problems. This Report also focuses on vision, mission, goals and various levelsof organization present in Bharti Airtel. It also explains the variouscontrolling processes used in the company. 16
  17. 17. Observation of the Business from a ManagementStandpointDuring the project I find out the whole information regarding the company BHARTIAIRTEL. We have paid special consideration towards that how to make a company moreand more successful in a market and also realized that there is only one way by servingsthe consumer in such a way as to make them more and more satisfied and more and moredelight by our various schemes, offers and services and all the other sectors whichinfluence on customer for using such a good product of a good company.There, I would also like to suggest few points over which top management should thinkand take corrective action to overcome those drawback due to which Mobile Serviceproviding companies & authorized dealer has gradually losing its market position so thatthe company must take following measure to regain its market position.1. Company should encourage to solve the customer complaint customer satisfaction should be the ultimate aim of the organization so customer complaints should be removed2. Promotion by local advertisement & on electronic media more as to print media as it is the biggest media to reach common customer.3. Companies should also start promotional schemes for the customers. 17
  18. 18. References • Bharti Airtel, Annual Report -2008 • Investors presentation, Bharti Airtel Limited, November 2008 • Telecommunication Services, Indian Industry: A Monthly Review, CMIE – November 2008 • Analyst Report – Bharti Airtel, Asit C. Mehta Investment Intermediates Ltd. • Telecommunication Sector Report – March 2008, CRISIL • Capitaline Database http://capitaline.com • Indian Telecommunication Sector - August 2007, IBEF Report • “Next Big Spenders – Indian Middle Class”, Business weekWebsites: • WWW. BHARTIAIRTEL.IN • WWW. AIRTEL.IN • WWW. GOOGLE.COM 18
  19. 19. AppendicesPoter’s 5 forces Fig. 1Poter’s Generic Strategy Fig. 2 19
  20. 20. BCG Matrix for Bharti Airtel Fig 3 HIGH Mobile Services DTH & IPTV Broad Band LOW HIGH LOWOrganizational Chart Fig. 4 20
  21. 21. Financials Snapshot Fig. 5Leadership Styles Fig. 6 21