Growth Strategy for a Leading Telecom Company
The client, a leading telecom company felt a pressing need to leverage on the group’s resources and enter related/ unrelated service businesses. The top management took this decision due to the following:
- Low margins on products due to increasing competition
- High inventory carrying costs
- High working capital requirements
- Low revenue per employee
- Absence of a strong manufacturing base to leverage on
- Strong distribution network that is unleveraged.
Thus, the top management requested UC to design a strategy for the group to enter into the service businesses that will allow it to leverage on its existing capabilities and build new capabilities, if required.
To develop the growth strategy for the client, UC adopted the following approach:
- Structured the industry into distinct segments factoring the various technologies in the industry (cellular, basic etc.) and the levels of integration (products to services)
- Used certain predetermined criteria to shortlist industry segments that were attractive to the group
- Conducted a detailed assessment of market attractiveness and the level of synergy between various industry segments to select attractive synergistic business groups
- A capability analysis was applied to the various businesses to determine the entry of the most likely one for the client
- Proposed entry into certain new businesses with further corporate objectives
- Recommended a reorganisation of existing business units into synergistic business groups
- Prepared an implementation plan for each of the defined business groups.
The client received a detailed strategic plan to focus on key service oriented segments within the telecom industry that the company should enter or maintain/ increase presence in, based on the market attractiveness and the company’s capabilities.