Business strategy by Yousuf

Assignment on Business strategy

IntroductionOrange is one of the competing telecommunication companies in UK. Telecommunication is the fastest growing service industry in the whole world. Like other industries the success of a company in its sector depends the way they devise their strategic planning and make strategic decision. Since telecommunication industry is technologically driven and changing continuously the business strategy of any company in this sector has to be dynamic in fundamental, corporate and generic levels. The telecommunication industry in UK market is classified as an oligopoly market. In that prospective Orange is not the market leader, rather they are follower. As a result Orange mostly sets their business strategies in terms of the strategies sets forth by the leader.

Task11.1 Define the roles of business strategy

Figure1.1: Business strategy

Business strategy: business strategy is process that help business to evaluate the external environment and create opportunities which a business can exploit and as well as threats that can damage the business. Business needs right resource and capabilities in place to find out the opportunities and responds threats. The important part of business strategy is to make sure that those resources and competencies are fully understood and evaluated- a process that called “strategic audit”.( Mcdonald, 2004).

Yousuf Hasan Roll: 6650

Business Strategy

CorporateCulture

Types of strategy

Evaluation

AnalysisStrategic planning

Strategic intents

Future planning

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Roles of business strategy:

Competitive advantage: Competitor advantage is business process that business got advantage over competitor by offering batter value to consumers.For example: orange can offer batter deal, customer service or batter network service to get competitive advantage.

Measure performance: Business strategy helps organization to measure their performance. If they doing good, they can keep doing it but if they fail to do well they should change the strategy for future. Business decision making: Business strategy set a target for organization and employees know what they need to and they can go for it.For example, Orange can set 1 or 5 years target and encourage employees to go for it.

Inform stakeholders: Business strategy inform stakeholder in business what they going to do and what they trying to obtain.

Set objectives: Business strategy set a short time or long time objectives for business. This help stakeholder or employees to know what the business trying to do and what they going to gain.(Clive,2005)

1.2Explain the meaning and importance of stakeholder analysis.

Figure1.2: Stakeholder in a project

Yousuf Hasan Roll: 6650 2


Stakeholder analysis: Stakeholder Analysis is defined as term where by developing planning process or project a person has something gain or lose. In those many circles people called interest group and they can have powerful bearing on the outcomes of political process. Sometimes it’s important to identify the needs and concern of different stakeholder, especially when those projects aim to influence policy. The word stakeholder is a person or organisation that involved with a particular assignment that can be affected by the decisions or impacts made by actions of business or entire organization. (Crosby, 1992)

Primary Stakeholders – People who has direct relation with organization and its success.

Secondary Stakeholders –People who has special relation with organization and its success.

Key Stakeholders – people or group who have major power in organization.

Importance of stakeholder analysis:

All projects depends on some stakeholders whom work together to achieve organizations goal and reduce the threats of organization. A stake holder analysis helps organization by following:

* Stakeholder or group of stakeholders are affected by project.* There is conflict of risk and reword in project. Risk of unsuccessful

project and reword of good work.* When organization implement the project relationship can be build

up.* Organization should encourage the participant in different stage of

project.* Stakeholder analysis helps to engaged participants each other and

remove the negative impacts.* The full participation of stakeholder’s key of implementation or

success but not guarantees success.* It’s very important for sustainability * Increase capability and responsibility (Weiss,2008)



1.3Conduct an environmental and organizational audit of Orange company

Environmental Auditing of Orange Company:PEST Analysis (Political, Economic, Sociological and Technological) helps to describe the environmental factors of Orange Company.

Figure1.4: PEST analysisPESTEL analysis of Orange Company:

Political: From 2000 The UK government allows 13 mobiles companies to operate the licence to sell next-generation mobile phones. Most of the companies started to pay big amount of money to obtain the licence. The only way government left to making money was to setting a price in advance to obtain the licence. The Uk auction was structured and size of bids spiralling sky high at a rate of over 150 rounds of bidding. Using this policy government has made billions of pound.(Orange,2006)

Economical:

Recently Orange merged with T-mobile to create UK’s largest mobile phone operator. They obtain 28.4milion customers or 37% of the market, leapfrogging rivals O2 and Vodafone.(Orange,2009)

Sociological:

More or less 50 million mobiles are now registered in UK according to the latest figures making mobile phones the most successful consumer product ever. 50 million mobile phones mean one phone for each person with the expectation of very young to old person. Some people off course have more than one. In 2002 Mobile phone market dominated by Camera phones but in 2003 is likely see video games, Short film making phones dominate market and now a days phone with free wifi is more popular.(orange,2009)

Technological: Now-a-days consumers are facing more and more Technologies and frequent innovations as a matter of fact Orange groups launched the EDGE revolution. Indeed, the 3G is characterized by a technology’s standard of mobile phone that is accessible to consumers since 2002. Thus, the EDGE revolution permits to complete the 3G innovation in 2005. The debit can reach 384 Kbit/s: this innovation has a real impact on the strategy of Orange and other companies who want to use new technologies to obtain new market shares.(Orange,2006)



Organizational Auditing of Orange Company:SWOT (Strength, weakness, opportunity and threats) helps to describe the Organizational auditing of orange company.

Figure1.5: SWOT analysis

Strength:

Orange recently merged with T-mobile to create batter

network coverage. They became UK’s leading mobile company with 37% market share.

Good peer to peer communication system Good integration and coexistence with 5GHz

WLANs(Orange,2009)

Weakness:

According to the survey they took in 21 March 2007, 68% of Orange customers are unsatisfied with orange customer care service. It was voted most unreliable broadband provider.

Channel 4 news Investigation says lack of se curity which may expose customer’s records to fraud. In 2008 news published with i-phone 3G performance, compared

to other network orange was capping download.(Orange,2009)

Opportunity:

Orange 50:50 joint venture with T-mobile will lead to the creation of a new market leader which will have more than 34 million subscribers along with 43% UK market share.

Threats:

Developing mobile companies like 3G or virgin may take the

market share. Big company merge like O2 and Vodafone could be big threat for

orange. (H. Barnwell, 2009)



1.4 Apply one strategic positioning technique to the analysis of Orange company

Strategic positioning:Strategic positioning is a process that define how an organization want to in future and how they going to face changing environment. Organization also need to think how they going to use the opportunities and face the threats.(Temporal,2000)

Figure1.6: Strategic positioning elements

Any strategic position has five elements that define it.

The mission: The Orange wants to build richer relationship with customers and provide better network coverage for customer. They want to be market leader in mobile industry,

The climate: The merging with T-Mobile good opportunity for Orange. If they successful they will be the largest provider in UK mobile industry and their Network will be more batter.

The Ground: The main competitor of the orange company is The O2. To create competitive advantage Orange needs to provide better customer service, Batter network coverage and other facilities and that not possible one day. Orange needs to fix the deadline to be market leader. To become market leader, they have used their opportunities properly and face threats. The leadership: When Orange will be market leader they have to do some leadership fundamentals to make their customers and employees to follow them. Such as, more concern for customers and employees and capitalize the opportunities. They have to tough but fair to run the business.

The methods: The Orange needs to use the strategy, sales and marketing tactics in proper way. If they fail to using art of methods, it will be impossible to obtain their mission.


The methods

The mission

The climate

The Ground

The leadership

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Task –22.1 After considering Orange company, demonstrate your ability to think

strategically about which SBUs in this company should be close done or expanded by using BCG matrix

SBU(Strategic business unit): Strategic planning necessary to competes successfully in the market. This strategic unit helps to find out what products need to meet the demands of customer and need necessary skills to obtain advantage over the competitors or create opportunities. Assets, finances, technical competence and the people are main concerns of firms operation Strategy. Job performance is influenced by employee’s knowledge, attitude and skills to handle day-to-day issue.

BCG matrix: To analyse the performance of large diversified firm by reference to market share and growth rates, four main categories are displayed in a two-dimensional matrix, which seeks to identify those business units that generate cash and those that use it, and then to relate the position of the business units to the formulation of an overall business strategy. Using BCG box, a company can divided all its SBUs in two dimensions: on horizontal axis: relative market share and the vertical axis: Market growth share rate.

Figure2.1: BCG Matrix

Four types of BCG matrix can be distinguished: Stars: a business unit that has fast growing industry generate cash and large market share. Market is growing rapidly so they need to investment to keep their lead. If successful, they become cash cows.For example: Orange has different types of mobile with different type of product plan so “Mobile” is the star of Orange company.Cash cows: a business unit that has slow growing industry and large market share. They need little investment to generate the money and that can be use to other business units. Orange has a large market for text massage and that not developing more, so “text message” is cash cows of orange Company.



Question Marks: a business unit with low market share but which operate higher growth market share at the expense of more powerful competitors. Management have to which one they should invest and which one they should allow to shrink?Home broadband has low market share but growing industry, so “home broadband” is question mark of orange company.Dogs: a business unit with low growth rate and market share, which operate in mature markets. Management have to think whether to continue support dogs or to implement a divestment strategy. Barrier to exit also need to be considered. Orange landline has low growth and market share so “landline” consider as dogs.(M. Butje, 2005)

2.2 Prepare a strategic plan for Orange Company, based on previous analysis

Figure2.2: Strategic Planning Model ABCDE

Assessment Environmental scan: Internal and external factors of Orange mobile

company. Background information: The current position of Orange mobile

company. Situational analysis


Assessment Baseline Components Down to specifics Evalute

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SWOT analysis: strength, weakness, opportunity and threats of Orange Company.

BaselineBaseline mainly discusses about operating environment of an organization, business relationship of an organization and key performance categories of an organization. Baseline also discuss about following elements:

Situation Significant issue Align Gaps

Components Mission and vision: In mission statement Orange say what they are

and what they do to run the business. In vision Orange say how they want to be in future and how their success looks like.

Values: set of beliefs that guide orange company to run the business.

Major goals Down to specifics The action plan is helps orange company to achieve their vision and objectives.

Performance measurement Initiatives and projects Action plans

Evaluate: Performance: Integrated all elements top to bottom. Balance scorecard: to organize framework and report actionable

components. Corrective action Feedback



Task -3

3.1 Evaluate possible alternative strategies- substantive growth, limited growth or retrenchment for orange company

To became market leader in UK mobile industry there are three types of strategies that orange company can follow. They are substantive growth through product development, Market development, Vertical integration, and diversification, limited growth strategy through market penetration or market development and retrenchment.

Product developmentSelling new product to existing customers, its good way to increase the cash flow.

Market development Market development is way to gain growth by limited growth strategy is product development and sells the product to new geographical market. The Orange Company might open their new business in Bangladesh.

Diversification Diversification is process of selling new product to new market. Diversification is a risky strategy and the company has to be sure and well prepared before doing diversification because diversification mostly costs more money than limited growth strategy. There are types of diversification such as horizontal vertical integration and conglomeration

Market penetration Market penetration is a strategy to grow same product in the same market. Attract competitor’s customer and get more loyal customers the only way to gain more market share. This strategy will not cost as much as diversification cost. For example: Orange can attract O2 or Vodafone customers by providing more minutes and text.

Retrenchment strategyRetrenchment is When the Company tries to cut costs or spending in doing the activities. The Orange Company can withdrawal some product or offer that not profitable.

3.2 Select an appropriate future strategy for Orange Company by using Ansoff Matrix



Ansoff’s Matrix is way that orange can identifying opportunities to expand a product range. Ansoff’s Matrix suggests that a business attempts to grow depend on whether it markets new or existing products in new or existing market. Ansoff’s Matrix is grid which sets out the choices available to business. Those are:

Selling existing product to existing customer. It’s going deeper in a market so its called Market penetration. For example: Upgrade new phone to keep the contract.

Selling existing product to new customer, for instance increase the minutes or text to attract different buyers. This process called market development.

Selling new product to existing customer, for instance Provide better network coverage or more download speed or Projector in mobile. It means making changes to a product so it’s called product development.

Selling new product to new market. This is called diversification, for example Orange can get the Virgin customer with batter offer. ( M. McDonald, 2009)

Ansoff’s Matrix looks like this:

Figure 3.1: Ansoff’s Matrix

Task -4



4.1 Compare the roles and responsibilities for strategy implementation in two different organizations

Comparisons of roles and responsibilities between two competitors The Orange Company and Vodafone bellow: (source: Orange Annual report 2008)

The Orange Company Vodafone Top managers

In 4th of June 2010 CEO of orange company plans for orange in UK, designed to deliver better quality, innovation and service to its customer and growth for company.

He has also announced new network policy which can cover 15.8 million customers across the Britain. The company rollout 450 new 2G base stations across the UK to ensure customers will benefit from best quality coverage and service when using their phones for calls and texts

Orange's global R&D unit — Orange Labs — Orange UK will deliver pioneering new technologies over the next 12 months and beyond, in order to provide its customers with a unique level of quality and experience that no other mobile company can offer.

In 31march 2010 Vodafone Chairman sir Joan Bond said Vodafone targeting to maintain growth in dividend per share at no less than 7% per annum for next three years.

Mobile voice price declining 10% every year, Vodafone has £1 billion cost program to keep voice price low in future.

Middle Managers

Operations manager Pawel Loj said in 2006 Orange took-up 70% in Poland but still leaves room for growth and they looking at Germen and Swiss market to take-up over 100% is possible and that is what orange looking for!

He also said 3000+ intelligent voice server which machine can answer the phone, recognize natural language, guide customer and even anticipate their expectation.

In 8th June 2010 CFO of Vodafone Michel Combes Explains stronger agenda for Vodafone:

More commercially focused in Europe, executing on turnarounds and regaining competitiveness in H2

Delivering company-wide focus on free cash flow generation to support increased shareholder return

Maintained investment - capital expenditure £6.2b

Line managers

In charge of an UK orange store Hasan Cinar said his main responsibility is to keep listening to the needs of various people - customers but also employees .

He also said he keeps his team committed to deliver the best service to customer.

Vodafone telesales manager MiChael Oxton responsible for eight telesales agent which is responsible for eight Outbound Sales Agents and the team result of maintaining £500k revenue per month from existing customers

Increased conversion rates from 20% to 30% in a five month period through coaching and support.

Maintained a high standard of Customer Care.

Staffs One customer at a time ....they can spend more time with customers.

They feedback facility to measure staffs performance.

Vodafone staff now have the flexibility to spend more time with customers developing their business

Staff can seize new business leads whilst growing existing relationships

Source( Orange,2006 and Vodafone,2008)



4.2 Identify and evaluate required resource to implement a new strategy for Orange Company

To organize the operational process of a Company a resource is a basic element of that company. A resource or set of resources helps organization to obtain competitive advantage. The sustainability of firm’s competitive advantage depends on the resources can be limited or substituted. When the resources are combined they can lead to the formation of competencies and capabilities.

Human resource: Orange directly employs around 16,500 people in UK. It has 323 Orange stores and 15.3 million mobile and 1.7 million fixed line customers. They are 3rd biggest mobile operator with 21.8% market share.(orange,2009)

Financial resource: The publication of the results for 2006 represented an opportunity to confirm the strategy and clarify the outlook for 2007: continuing to optimize costs and generating 6.8 billion euros in organic cash flow, which will enable the Group to clear its debt, invest in its future, and, naturally,reward its shareholders. The Board of Directors has confirmed that it will be submitting a proposal for a dividend of 1.20 euro per share for 2006, up 20% on 2005, and has indicated that this level of dividend will be maintained for 2007.(orange,2007)

Physical resource: Orange has stores all over the world. They have stores in UK, Germany, Poland, Switzerland, Spain, France, Middle East and Caribbean, Africa and Asia. Information resource: Orange keeps all information of their customers. They manage all aspect of customers orange account- from policy to ordering, billing to reporting and support and network performance reporting - to maximise efficiencies and control costs.

4.3 Propose objectives and schedule for achievement in Orange Company to monitor development Strategy



Objectives and schedule for Orange Company:

Orange is going to expend their business in India. They want to make sure that Orange will be market leader in one year time. To make this plan successful, they have to complete some task in regular basis:

Recruiting 517 employees (Staffs, managers, engineers) Decorate and develop 20 shops Increase network coverage for 1 million people Increase sales 8% Increase customer satisfaction 10% Increase total customers 15%

Activity ScheduleNum Task Apr May Jun Jul Aug Sep Oct Nov Dec Jun Feb Mar

1 Recruiting employees2 Decorate shops3 Network Coverage4 Increase sales5 Customer Satisfaction6 Total customer

Figure4.1: Time-table for orange activities in India

Recommendation:



It is recommended the company should be more innovative in making product plan and that would make them more popular in marketing arena, locally and internationally. To be able to be known worldwide, the company must include in their strategy the acquisition and merges, to properly utilise branding strategy. By acquiring, other famous company within the software field, the company can easily enter the marketing arena in the global competition.

Conclusion:The mobile industry has already extended all over the world. Firms who run the business in mobile industry that are categorise as a market structure that is highly competitive. Orange Mobile Company and its strategic marketing planning has been the focus of this research is that the Orange mobile Company as a market leader in the mobile industry.



Reference:

Anthony, H. (2008) Understanding strategic management. 1st ed.New York, Oxford university press.

Byars, L. (1984) Concept of strategic management: planning and implementation.1st ed. London, British library cataloguing-in-data.

Botten, N. (2005) Business Strategy. 1st ed.London, British library cataloguing-in-data.

Edward, R. (2010) Statistic management: A stakeholder approach. 3rd ed.New York, Cambridge university press.

Gitman, J. and Carl, M. (2008) The future of business. 1st ed. USA, South western cengage learning.

Grant, R. (2005) Contemporary strategy analysis. 5th ed. Victoria, Australia, Blackwell publishing.


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