Mobile Phone and TOWS Analysis

1. Introduction

This assignment aims to conduct the analysis of an organisation and to propose areas which need to be improved in the said organisation. Hence Celcom Axiata Bhd has been chosen to obtain information needed to complement the assignment.

Company Background

Celcom Axiata Bhd is the country’s most experienced and premier mobile telecommunications company with 11.2 million customers. Being one of the very few companies in Malaysia to originally obtain a cellular phone license, it successfully introduced mobile telephony in Malaysia through its ART-900 service, using first generation NMT-900 technology. It uses the dialing prefix identifier of “013”, “0148” and “019”.

The company’s core business is in providing prepaid and postpaid mobile voice services. Its strong growth has been further supplemented by the growing data services segment and mobile broadband business, making it Malaysia’s leading mobile broadband provider. The company is the first to launch the 3G service in Malaysia and have the widest 2G, 3G and 3.5G coverage in the country and also offers international roaming service in 120 countries over 317 networks worldwide.

Celcom’s vision is to become the finest enterprise in the country and it’s mission is to delight the customers and to become a premium brand that symbolises the spirit of freedom, aspiration and globalism.

2. Identification of TOWS in the form of a matrix

The goal of the TOWS analysis is to identify critical strategic factors and then to build on core strengths; eliminate undermining weaknesses; take quick advantage of significant opportunities; and circumnavigate or mitigate threats. It is a tool for questioning assumptions and thinking outside the box (Morrison 2003). This analysis gives the company information on the strength and weakness it has and matches it with the competitive environment it engages in. It also helps a company create strategic plans that can counter any problem or threat from competitors. TOWS analysis tends to help companies determine what aspects they excel in and what aspects they have problems in and also helps companies determine its status against rivals.

TOWS analysis helps a company to get a better understanding of the strategic choices that they face and to answer the following questions of how they :

Make the most of their strengths?

Circumvent their weaknesses?

Capitalize on their opportunities?

Manage their threats?

A next step of analysis, usually associated with the externally-focused TOWS Matrix, helps the company to think about the options that they could pursue. To do this they match external opportunities and threats with their internal strengths and weaknesses, as illustrated in the matrix below:

Internal Strengths:

1. Strong R & D and Engineering

2. Strong Sales and Service Network

3. Offer one stop shopping centers

4. Strong customer oriented

5. Leads industry in information technology

Internal Weaknesses:

1. Heavy reliance on dealers or 3rd party for marketing & sales

2. Rising costs in Malaysia

3. Depend on foreign experts for advanced technology expertise

External Opportunities:

(Also Consider Risks)

1. Growing Market Demands for innovative technology.

2. Attractive prospects to branch out to developing countries.

SO:

1. Develop and Produce Multi product Line with Many Options, in Different Price Classes (O1 S1 S2)

2. Advanced network upgrading for 4G facilities. 3. Embark on information technology business in developing countries.

WO:

1. Develop Compatible Phone Plans for Different Price Levels (O1 W1)

2. To Cope with Rising Costs in Malaysia,

3. Build branches in Vietnam,Sri Lanka, Philippines. (O2)

External Threats:

1. Entrance from new competitor

2. High competition from other telco operators

3.F3. Instability of customer loyalty

4.

ST:

1. Reduce Effect of Exchange Rate by opening branches in potential developing countries.

2. Meet Competition with Advanced Design Technology – Blackberry service and 4G (T2 T3

S1 S2)

3. Improve network capability on data and broadband internet.

WT:

A. Overcome Weaknesses by Making Them Strengths (Move Toward OS Strategy)

1. Reduce Threat of Competition by Developing Flexible Plan Line (T2 W1)

B. Possible Options not Exercised by

TOWS Matrix

3.Evaluation of the organisation’s threats

Celcom is only one of the many industries in this kind of business; hence, the company is facing many threats in which they have to overcome. One of the threats that the company may face is the entrants of new company that will produce more innovative products than what Celcom is providing. Since there are many people who are becoming experts in terms of these product lines, the company may be threatened in a way that they might be left behind by the technological advancement or simplification of products and services that these companies will have. In addition, another threat for the company is the loyalty of the consumers. It is mentioned that Celcom has a strong approach in branding, however, due to the existence of other multinational and large companies in this kind of business, there is a threat that their consumer will tend to use other line providers which they think meet will meet their demands more than offered by Celcom itself.

Today’s market is characterized by highly competitive organizations which are all vying for consumer’s loyalty. Firms are faced with the challenge to maintain their own competitive edge to be able to survive and be successful. Strategies are carefully planned and executed to gain the ultimate goal of all: company growth. However, external factors are not the only elements which influence growth. There are also internal factors, components working within the organization which shape the direction of the company.

Despite the economic and technological conditions that make it possible now to promote products and services in a larger consumer market, there are other factors that still need to be considered for a business organization to reach out easier to their target market. Looking into the characteristics and thought processes of the people still holds as the most significant factor to be looked into.

4.Evaluation of the organisation’s opportunities

Because of the strategies that Celcom has implemented throughout the years, the company has many opportunities ahead. Since most nowadays consumers are becoming more conscious about their time and convenience, Celcom has a great opportunity to stay in the market place. In addition to that, the innovativeness of the company can also be a vital factor on making it having more opportunity to become the number one company in this industry. The company has also an opportunity with in terms of competitiveness both locally and in the international market, since many people from different countries or walk of lives are more conscious about the significance of speed and convenience.

5.Evaluation of the organisation’s weaknesses

The weakness that the company have is the weak ability on retaining loyalty from its target consumers. Many telecommunication companies are doing its very best to make their plans to be more appealing than other competitor and Celcom must importantly give emphasis in improving their product differentiation so that their consumer will be more attracted with their products and be loyal to their products.

6.Evaluation of the organisation’s strengths

To be considered as one of the leader in the telecommunication and ICT industry, Celcom encompass different strengths. One of its strength is its ability to anticipate the demands of the customers by providing excellent customer service orientation and strong sales and service network. This is in order to provide high-quality and innovative features of their products which in return make their customers become loyal of availing all their services and products. Secondly, technologically speaking, Celcom can also be considered to be strong in this aspect because of the technologically advanced facilities it uses.

According to The Star Online, the company will invest about RM1bil in 2011 in capital expenditure (capex) to upgrade its network to be long-term evolution (LTE) ready. 60% of the RM1bil would be used to enhance its data network while 40% would be used to maintain its current network. The network modernisation will eventually move Celcom towards an all-Internet protocol (IP) infrastructure, migrating its sites to a single-RAN (radio access network) architecture and be ready to deploy future LTE services.

LTE is the project name of a new high-performance air interface for cellular mobile communication systems. It is the last step toward the 4th generation (4G) of radio technologies designed to increase the capacity and speed of mobile telephone networks. This move will surely give an edge to Celcom to override its competitors in terms of becoming the industry leader in information technology.

7.Recommendation on improvements based on evaluations

Celcom’s innovative performance and value leadership will lead to the strengthening of customer relationships as well as open doors for new ones. Market share and brand equity will grow as there is increased customer loyalty. As for the company’s employees, they will become more loyal, motivated and may participate in the ownership of the company which will allow the company to retain employees easier.

For the company’s business partners, improved collaboration with favored suppliers fuels the transfer of innovative best practices to their other customers. As their success strengthens the business bond between the supplier and innovative company, competitive advantage will be achieved. The product for innovation is basically an increase in sustainable growth and control over the organization’s future which is the capability to alter competitive rules and establish new categories and markets.

References

David, Fred R., (2003).Strategic Management: Concepts and cases. (9th ed.).

International Edition, Pearson Education Inc, New Jersey, USA.

Post, J.E., Lawrence, A. T., & Weber, J., (2002). Business and society: (10th ed.). International Edition, McGraw-Hill Irwin, New York, USA.

Open University Malaysia.(Feb 2010).Strategic Management. OUM.

CELCOM.[Online]. Available:http://www.celcom.com.my. [2011, February 10]

http://biz.thestar.com.my/news/story.asp?file=/2011/3/3/business/8177567&