Dizz Synergy Consulting

Agenda

Organizational Diagnosis Critical Success Factors

Market Development Strategy Issues And Recommendations

Conclusion

Organizational DiagnosisMacro-analysis

Political

Economic

Social

Technological

Mobile network operator industry

Regulation Recession

Foreign exchange

Growing importance of technology

Rate of technological change

Diffusion rate of technologyChanging customer needs

Emerging technology: 3G

Industry Competitiveness

Threat of new entrants

Buyer power

Supplier power

Threat of substitutes

Intensity of rivalry

among firms

Low

High

High

HighHigh

Low threat of new entrantsHigh initial capital requirements, economies of scale, and tight regulatory requirements

High threat of substitutesMany substitutable products from other industries, relative costliness of mobile services as compared to other services

High buyer powerLow switching cost, homogeneity of products within industry, elastic demand for the industry’s service

Low supplier powerHighly competitive handset manufacturing industry

High intensity of competition within industryLow product differentiation, same costs and sources of inputs, regulatory pressures for competition

Organizational DiagnosisSWOT Analysis

DIZZ

STRENGTH

OPPORTUNITY

WEAKNESS

THREAT

MARKET DEVELOPMENT

CRITICAL SUCCESS FACTORS

- IT system- Business process

- Alliance with suppliers- Partnership with institutions- Alliances with search engines

Timely innovation to address changing wants and needs

Consistent superior performance to create

customer loyalty

Resource management especially financial

resources to support projects and investments

Critical Success Factors

Average Proportion of Customers

44% 41%

15%

Market Development Strategy

Europe

Asia

Africa

Market Development Strategy

2008 2009 2010 2011 2012 2013 2014

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

EuropeAfricaAsia

Trend in Revenues

Market Development Strategy

• Asia has the most market potential among the regions

• 85% of India is yet to be tapped as mobile phone customers

TARGET THIS EMERGING

MARKET

2010 20 € 2,151 € 484 2.85%

2011 24 2,664 599 3.53%

2012 28.8 3,229 742 4.37%

2013 34.56 4,086 919 5.41%

2014 41.472 5,060 1,138 6.70%

Year Customers Revenue Profit ROI

Market Development Strategy Investment in India

Issues and Recommendations

Regulator threat in Yee4

Proposal to change the organizational structure2

Resignation of CEO in Africa3

Errors in update of contracts details in Europe1

Top Priority Issues

Issue 1

Engage the original developer to repair the system

Adopt tighter policies to improve the process of selecting outside contractors

Situation

• Customers in Europe complain of being charged excess rates• Defective CAS application written by an outside contractor• Potential 70.22% decrease in profits

Errors in the Upgrade of CAS

2009 2010 2011 2012 2013 20140

20

40

60

80

100

120

140

160

180

YEAR

Assuming Normal Operations Assuming Errors Persist

CUSTOMERS

Forecasted Number of Customers (in millions)

Forecasted Operating Profit (in millions)

2009 2010 2011 2012 2013 2014 -

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

YEAR

PROFIT

Assuming Normal Operations Assuming Errors Persist

Average Percentage Decrease in Profits

70.22%

Issue 2Proposal to Change

Organizational Structure

Advantages Disadvantages

Reject proposal because of need

of Dizz for responsiveness

Issue 3 Resignation of CEO in Africa

Assign a new CEO in Africa from its senior management team.

Situation

• CEO in Africa resigns; European CEO assumes position• Strategic direction dispute• Weakness in organizational leadership in Africa

Invest in the upgrade of transmitters not later than September 2009

Situation

• Threat of being fined• Non-compliance with regulator’s requirements• Potential fine; possible loss of license and revenues from Yee

Issue 4 Regular Threat in Yee

Total Differential Cost (in millions)

Upgrade Transmitters in Yee

Shutdown Operations in Yee

Total Differential Cost

8,578

2318,809

Shop in shop proposal

Marketing efforts targeting children in Asia

Acquisition of Casung handsets

Network Security

Performance Related Pay Scheme

Other Issues

Shop in shop proposal

Advantages

• Potential for increased revenues over life of lease• Increased visibility in shop locations

Disadvantages

• Net cash outflow over life of lease

Reject proposal because of expected loss on the project

Situation

• Offer by major department store chain to open 100 shops across Europe

Forecasted operating profit over the term of the contract

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,000

Net Cash Outflow Over the Lease term

28,284

Gross Profit per year Total Costs per year

Advantages

• Potential to increase customer base and revenues• Help achieve CSR goal of working to protect children

Disadvantage

• A potential business ethics concern

Adopt the marketing program to other regions

Marketing Efforts Targeting Children in Asia

Situation

• Marketing drive in Asia targeting children• Roll out of marketing program to other regions

Marketing Drive in Asia

CORPORATE SOCIAL

RESPONSIBLITY

ADDITIONAL REVENUES

MARKETING EFFORTS ON

CHILDRENSECURITY

Opportunity to Acquire Casung for 10 M Euros

Advantages

• Low acquisition price• Potential for efficiency from backward integration

Disadvantages

• No competitive advantage expected to arise from acquisition• Increased operating complexity from diversification

Reject proposal to acquire Casung

Proposal to Acquire Manufacturer

Acquisition of CasungExisting good relations with existing suppliers

Unsuitability of second-tier handsets for a multinational network company

Risk of Casung’s poor product quality

Little experience of the region in which Casung operates

Participate in industry-wide associations in coping with security concerns

Funding in-house development of security applications or procedures

Situation

• Increased incidence of call time theft though revenue loss is insignificant• Pressure to increase network security to avert risks, but no need for further investment according to Global Operations Director

Network Security

Advantages• Reduce revenue loss from call time theft• Increase protection of customers and integrity of data transmitted over network• Reduce risks of network breakdown that will disrupt service to customer

Caveat

• Benefit of program should exceed its cost

Network Security

CUSTOMER DATABASE SECURITY

Reject the proposal to pay all employees according to performance evaluation.

Intensify existing employee enhancement programs

Retain the pay for performance program for senior managers whose individual performance can be more directly aligned to the performance of the company.

Performance Related Pay Scheme

Situation

• Proposal to adopt performance related pay for all Dizz employees

Advantages

• Potential for increase in productivity and service quality levels

Disadvantages• Increase in wage levels of about 5%• Initial costs in and difficulty of developing scheme• Uncertainty of potential benefits

Performance Related PayEmployee Motivation

Monetary Factors

Basic Salary

Bonuses

Incentives

Non-monetary Factors

Open Communication

Staff Meeting Leadership

External Training Workshops

Self-Evaluation Tools

Strengths

• High coverage reach and quality of signal• Superior customer service in Europe• Great alliances with global manufacturers • Highly accurate and reliable IT system• Economies of scale• Strong brand equity• Effective HR programs that motivate

employees through trainings and development

• Full compatibility with 3G, the latest technological platform, in Europe

• No CEO for the African division• One-time failure of the IT system due to

externally written billing application

Weaknesses

• Penetration of new markets and growth in current emerging markets

• Adoption of prospective new technologies across its networks

• Adoption of the latest existing technologies in Asia and Africa

• Broadening of industry because of expansion of product package to include data services

• Backward integration by acquiring Casung, a handset manufacturer

• Opportunity to open shops across Europe• Landline telephony

Opportunities

• Risk of growth projections not being achieved, because of recession

• Intense competition, especially in Europe• Increasing competition in emerging markets• Tightening regulation and strict license

requirements• Threats from substitute products• Concerns of compromise of network security

Threats