PESTLE Analysis for Dialog Axiata

Keywords: dialog swot analysis

Dialog Telekom PLC (THE BUSINESS) works Sri Lanka's major and quickest growing telecommunication network - Dialog GSM. Dialog Telekom is one of the largest companies outlined under the Colombo Stock Exchange. It is a subsidiary of the Axiata Group Berhad. Because of Dialog the Sri Lankan mobile industry has achieved new heights and has come at par with the developed world.

The telecom company runs 2G, 3G and 3. 5G mobile services, aiding the current movements in mobile internet and multimedia system services, as well as international roaming. Dialog Telekom accounts for more than 50% of Sri Lankan cellular phone subscribers.

Along with the mobile telecommunication business Dialog Telekom manages a wide portfolio of international telecommunication services including retail and inexpensive international tone of voice and data services.

Dialog Broadband Networks Pvt. Ltd. (DBN) is an owned subsidiary of the Company, and can be an important player in Sri Lanka's ICT infrastructure sector. DBN was also the first company in Sri Lanka to create high-speed broadband internet services based on Wi MAX technology.

Dialog Tv Pvt. Ltd. (Dialog TV) is another subsidiary of Dialog Telekom PLC. It performs Dialog SATELLITE TELEVISION, a Direct-to-Home (DTH) SATELLITE TELEVISION service. Dialog Television supports a variety of international and local television channels.

Regarding the framework of the company, Dialog Telekom Ltd. has got a Hybrid composition which really is a combination of Matrix framework as well as Modular structure. As with each Strategic Business Device (SBU) works separately and every function of every SBU has communication linkages with each other. Top down as well as lower part up communication can be found and it uses worldwide resources and solutions.

MICRO Evaluation THROUGH - SWOT Analysis

(S)trengths

• Dialog has the first mover advantage of GSM technology in Sri Lanka.
• Due to its strong infrastructure it has got one of the best and significant mobile telecommunication coverage.
• Relationship with a telecommunication tycoon in the same region; Telekom Malaysia Group.
• Extension in collaborations preserving good relationships with other Telecom companies has empowered Dialog to truly have a global way with services such as and Dish Coverage & high roaming.
• Dialog Telekom offers a very hostile online marketing strategy which enables it to truly have a good and secure Brand Equity.
• Company's financial examination proved excellent balance in financial statements regarding investments.
• Strong Public Romance that is built up over time.
• Expanded CSR initiatives increased the communal value of the firm.
• High quality specialized inventions has made dialog market head in Sri Lanka.
• Constant rise in the share prices has gained the assurance of the buyers resulting in value increment.
• Strong distribution network multiply throughout the entire island. .
• Well managed customer care support techniques has increase the level of customer satisfaction.
• Wide variety of products.
• Management Team is successful and hard-working.
• High degree of corporate and business business knowledge retention through low worker turnover

(W)eaknesses

• Though the investment on advertising and value addition through technical innovation is high, there is no clear aim and notion of a broader market
• Poor performance as on ISP.
• Compared to its rivals Dialog lags behind in inventions related to prices strategies.
• The hq in Colombo is of a distributed nature credited to non-expandability of the existing location.
• The level of motivation of internal employees is lessening.
• Due to the swiftly growing customer foundation the trends in Quality of Service are going down by the day.
• In the front-office worker turn-over is high.

(O)pportunities -

• Telecom is one of the quickest growing industries in Sri Lanka's 19. 5million people
• As per estimations 4. 5million users would have mobile phones by the end of 2006
• The communication industry is growing rapidly.
• Fixed series penetration is low.
• The authorization and acceptability of the Value Added Services (VAS) by the users has increased the likelihood and success of any new VAS initiative.
• The strategic collaboration of Dialog Telekom with Vodafone UK.
• Dialog contains the potential to gain benefits associated with Value String Convergence.
• Technology progress especially in mobile multi-media solutions and the introduction and use of another 3G mobile communications.

(T)hreats

• Strongest Competitor of Dialog, the Mobile wing of fixed line telecom giant SLT is focused on cost-cutting strategy through its low priced pre-paid products in the market.
• Rapid changes in the politics, social and economical conditions as well as the laws and regulations.
• Changes in currency exchange rates and high inflation which is inversely impacting the global business.
• Rapid change in customer tastes and their growing needs credited to advanced of customer understanding.
• Constant changes in technology.
• Dialog had to switch off all bottom part train station in northern-province during the last few months due to military procedures by the Sri Lankan Govt. pushes. Thus there can be an uncertainty because of the growing counter-top terrorist promotions.

PESTEL Analysis

(P)olitical

Sri Lanka has very positive overseas investment procedures. However though Sri Lanka identified need for liberalization early just as 1977, due to political interventions bureaucratic attitudes inherited from colonial reign and poor governance, the country as a whole and specifically the industry has not grown up as it was foreseen during liberalization. During the past 2 decades, terrorist activities have remained continuous as well.

(E)conomical

Unstable macro-economic environment and trade coverage regime has a poor effect on the industry. The fall of the exchange rate over the years happened over a gradual pace.

Since the inception of liberalization insurance policy it has undergone significant reforms in this sector. However Sri Lanka lags dynamics designed by India to catch the attention of foreign direct investments. The frame of mind towards foreign immediate investments needs to be advanced.

(S)ocio-Cultural

Sri Lanka has better public conditions for example literacy rate is high, baby mortality rate is low and life expectancy is long. The country also has an educated and trainable employees.

Nevertheless Sri Lankans inherit a bureaucratic attitude from the colonial supervision that results in inefficiencies and discrimination.

(T)echnological

Sri Lanka is determined by technology exchanges from foreign direct purchases. However TRCSL promotes local research and development.

The country relatively has not performed sufficiently to adapt technical changes over a timely manner. Including the transfer from analogue to digital and the adoption of CDMA technology materialized in a gradual pace.

TRCSL the regulatory body takes up multidimensional functions. It ensures fair enforcement of Govt. policy, hold operators in charge of performance, address consumer issues, monitor changing industry needs and provide responses to the insurance policy making models.

However TRCSL has been criticized over time for information asymmetry, inefficiency and discrimination.

Porter's Five Causes -

1. Threat of New Entrants

• India's Bharti AIRTEL has got the fifth mobile operator license in Sri Lanka
• As per TRCSL, no more licenses would be awarded
• Thus it creates an entry hurdle for others to the market

2. Bargaining Power of Customers

• Consumer protection categories are almost non-existing
• As compared to the west, individuals are not that strong in their demands
• Quality criteria and aids are comparatively not major matter if they exist at a simple level
• Low moving over costs
• Customers are highly cost conscious

3. Threat from Substitutes

• Almost negligible
• Alternatives are set collection and the newer CDMA connectivity
• This is a much smaller market when compared with the huge total market

4. Bargaining Ability of Suppliers

• Local and International suppliers for Dialog
• Depends on SLT, MTT and a few other VSAT providers to access the nationwide backbone
• Thus these particular suppliers are really powerful
• Acquisition of MTT and the creation of the new subsidiary known as Dialog Broadband Network

5. Rivalry Among Rivalling Firms

• Very high competition with regular pricing wars
• Dialog certainly comes with an edge because of their Value Added Services and differentiation strategy and the huge customer base
• Value Added Services have become very popular on the list of consumers

Strategic Groups Adopted by the Company

Dialog strategies are visible in the business's commercial, business and practical levels. They have varied their business across many areas during the last few years. For instance, by acquiring MTT, Dialog were able to strengthen its transmission backbone. Also recent past it has attained CBNSAT, a satellite television transmission company, and DERANA TV Route with a permanent objective of your value string convergence. In addition to reach the customer, Dialog has created many alliances with other business firms. Cargills-Dialog alliance to allow Cargills customers to settle Dialog bills is just one particular example.

The business plan is designed at the beginning of the entire year considering main targets of the company. The progress of every project is supervised in a monthly basis through different tactical committee conferences.

On the other palm, Dialog attempts to introduce latest technologies into the market considering global mega trends through its thorough Research and Development wing.

Among them, the Dialogs effort to create the Dialog Research Lab at the University of Moratuwa is of importance because it effectively empowered Dialog to provide customized solutions to the local market. Nokia mobile phones with Sinhala words support and Tsunami warning system for mobiles are merely to name a few such illustrations. These technology initiatives can be considered as a technique used to capture the market by effectively staying ahead from your competition in the technology and creativity sphere.

Structure

The Company's business and procedures are handled under the guidance of the Panel of Directors comprising of 5 non-executive directors and 1 professional director. The Board has the power to appoint executive directors including the CEO. Divisional framework can be discovered in company level but shows of the divisions are assessed through different proper committees.

Systems

Apart from the complex backbone, Dialog uses several systems to perform their business strategies effectively. For example-

SAP ERP (Organization Source of information Planning) - This was launched in 2006 January to integrate identified key process in the company.

CCBS (Customer Care Billing System) - Currently existing billing system is going to be migrated into a fresh system to provide more customer centric services.

HRIS - Used for Human Tool Management and everything the day to day functions are carried out through this technique.

Style

The management style always depends upon targets and goals. Strict deadlines are enforced while performance and improvement are very directly monitored by any means levels of the organizational composition. Rewards and advantage schemes are in line for the most notable performers and better achievements.

All the employees will have lots of recreational opportunities such as trips, get-together, activities etc. to take some time off from active work schedules.

Staff

The Company presently employs a labor force of 2500 who in turn are believed pivotal to the organization's progress and success. Total annual manpower planning and recruitment is completed in parallel with the business enterprise plan preparation. The features required by potential employees are based on certain requirements of the business plans appropriate to individual departments of the company in any given season. Recruitment to the business is governed by several insurance policies. The core policy on filling up vacancies spells out the business's intention to catch the attention of the best with the aim of exploiting the individual's potential while providing profession development opportunities regardless of communal or gender variations. 7% of the total HR cost is specialized in training and development. The training needs for folks and groups are discovered from the competency requirements arising from the business's business plan and employees' gross annual performance review.

Subordinate Goals

All people with different backgrounds, different ethnics and nations are teamed up and motivated towards a common group of goals and targets at Dialog Telekom. The business has been successful in focusing the entire team towards a single vision by adding all individuals' goals and personal purpose together.

Skills

Dialog team consists of number of individuals with distinctive capabilities and competencies throughout. Dialog is proud to truly have a very full of energy and talented CEO in the caliber of Dr. Hans Wijesuriya. In addition to that Dialog is dished up by way of a team of top class person in the Sri Lankan industry with whole lot of talent and exposures.

Different Strategies Followed by Dialog Telekom

Corporate Strategy

Considering the current performance, the main element success factors and the SWOT evaluation the directional strategy alternatives would be the following -

Growth strategy to grow the activities of Dialog Telekom further is the first alternative. Because the current products have real expansion potencial attentiveness of resources on those would be ideal. In attentiveness Dialog Telekom can follow the vertical expansion technique to take the advantage of the value string convergence opportunity that is existing in Sri Lankan framework.

Stability strategy to keep with current activities without any changes to the path would be the second option. Here Dialog Telekom can utilize pause/continue with caution technique to have only incremental advancements as the weaknesses mentioned are overcome. It can use this time for you to stabilize the business due to the changes occurred due to multiple strategies it implemented before such as acquisitions and spending on innovative innovations, which will help to reunite the loosing inner employee drive.

The first alternate will move Dialog Telekom further from the competition and generate a monopoly temporarily for converged business of telecommunication, content, media and retail. However unfocused highspeed growth to capture the marketplace without stabilizing the existing acquisitions can disassemble everything. The second alternative gives Dialog Telekom and its employees much needed breathing space.

The recommendation is always to implement the next alternative at first to stabilize the organization without the other major change in the path. And over time they can adopt their permanent beneficial value chain convergence option depicted in first alternative.

Business Strategy

The business strategy alternatives available for Dialog Telekom to improve the competitive position in the market sectors it manages would be -

The first alternative for the competitive strategy is always to improve on the existing strategy of differentiation. It can improve this insurance firms unique Value Added Services for every single of its current proper sections DBN, CBNSAT and Dialog Telekom itself. This may enhance the customer commitment and thereby may charge a reasonable high grade rate than rivals.

Second solution which Dialog Telekom can make an effort to put into practice is cost authority to defeat the threat of lower rates provided by competitors, Mobitel. Since the VAS are less in Mobitel the turning from Dialog to Mobitel is not much in metropolitan people who use these VASes. But folks who are using purely as a speech/sms only are shifting as most of them are cost mindful and there is not much of a difference in coverage. Hence if Mobitel enhances on its VASes it would become a serious danger at a stage at which only the rates would determine the attraction of this segment of the marketplace.

Typically the differentiation strategy is much more likely to create higher gains than low priced strategy. However differentiation strategy execution may involve higher investment than low priced strategy.

Competitive scope is an important factor when contemplating competitive strategies. The advised alternative is determined by the competitive range in this situation. Considering both alternatives and the pros and cons of each most ideal is always to have culmination of both differing from the section of the market. Dialog Telekom must have a centered differentiation strategy in the market where people are valuing the VASes and cost concentrate on the market where use is strictly for tone of voice/SMS.

Simultaneously Dialog Telekom should look at proper alliances as a commercial technique to gain competitive benefit by dealing with other organizations. Currently they have explained this with some banking institutions plus some supermarket chains as stated earlier. However this can be vastly improved to include alliances with insurance companies, stock brokers, popular food chains etc.