CELCOM AXIATA

CELCOM AXIATA

1.0

INTRODUCTION

Celcom Axiata Sdn Bhd, a Technology Resources Industries (TRI) Bhd company has  been the leading mobile cellular operator in Malaysia for the past 10 years. years. Celcom's main  business activity is to develop and market Mobile Services

1988 witnessed the dynamic birth of Celcom, a leading mobile telecommunications  provider in Malaysia. Since its inception, Celcom has steadily made its presence felt in the Malaysian market. It has, always continued to spread its wings and is undeterred by the dynamic nature of the mobile communication industry.

Celcom business Vision and Mission is: •

To delight our customers.

•

To build a profitable enterprise that maximizes investors return.

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To empower, develop and reward our people, to become Malaysia’s preferred employer.

•

To build win-win relationship with all our business partners, based on mutual trust, respect and support

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To work to bridge the digital divide, to build our nation and to enhance its standing abroad.

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To maintain the highest levels of transparency, integrity and professionalism.

Together with all our stakeholders, we will make Celcom Malaysia a premium brand: a  brand that symbolizes the spirit of freedom, aspiration, confidence, dynamism, dynamism, timelessness, universality and globalism. (Celcom Official Website, 2009).

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Setting up a team of quality directors and staffs, staff s, has transited Celcom from firstfirs tgenerations to second-generation market leaders. For Celcom, communication is a serious  business. This is why they have mainly products products and service geared toward maintaining  business voices. This products and services includes business prepaid plan, business business supplementary plan, business post-paid plan and business satellite. A major challenge facing Celcom is how to increase profit and maintai n their competitive advantage in the Malaysian market. (Celcom Official Website, 2009).

2.0

OBJECTIVE

The objective of this case study is to analyse and discuss the strategy direction of Celcom in the local and international market and the segments within these markets.

To identify the strength and weakness of the competitors and to discuss the short, mid and long term plans that these competitors can undertake to further increase their market share.

3.0

MARKETING STRATEGY

Celcom has been in the telecommunication business with the primary objective to keep  people connected and helping companies companies to market their goods and services as well as keeping them close to their customers. Besides formulating a market-orientated and customer-focused mission statement, Celcom has established est ablished and objective to achieve cumulative growth in the next five years with a 50 per cent net profit for the newly launched U-verse.

To accomplish these objectives, Celcom has developed a benchmark for progress i n three different categories. Firstly, through using a market penetration pricing, the service will  be brought to the customers at affordable and reasonable prices. Secondly, by gaining a  better understanding of the need and satisfaction of the current customers, they will will improve the service to encourage re-orders. Finally, the service is to be able to utilize its current technology and knowledge base, and research as well would be conduct on similar  products with an eye towards developing developing the services to a speciality advertising product.

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3.1

TARGET MARKET

3.1.1

TARGET MARKET 1

•

large travel agencies or holiday planners For example, travel agencies like Wah Tung Sdn Bhd, can use the service to provide 24/7 travel planning’s to their  numerous customers, thereby increasing the companies ticket sales and profit.

3.1.2

TARGET MARKET 2

•  Niche market of business travellers For example, business men and women who normally use online system for their reservation will find it easy to make reservations and flight booking by just a simple press on the button, and that would be more convenient to travellers.

3.1.3

TARGET MARKET 3

•

Direct consumer market of hand phone user. For example, this service can be utilized in our day to day life, like  paying bills and checking account balance, making it easier for our families by just pressing a button instead of having to go to the company or bank to pay our bills.

3.2

POSITIONING

Celcom has since its establishment, positioned itself as the number one Malaysian network in the Malaysia market. This they have done by providing efficient network connectivity and linking of individuals together. Today Celcom stands in the heart of every Malaysia as the telecommunication service provider that offers a “more for more” customer satisfaction, by providing the customers with products to keep them satisfied above their competitors and charging them more money for the quality they yield in the products. It has made our work so easy, that by launching this service as the first in south East Asia, it will go a long way towards convincing the present customers that Celcom is truly the number one Malaysian network, persuading the non-customers both in Malaysia, and the neighbouring countries where Celcom is currently expanding to join the leading network. 3

Physiologically, Celcom has influenced the status of their customers, because they are considered to be financial capable by using Celcom services.

3.3

STRATEGIES

By understanding the customer’s needs, Celcom has used its strength to fill the needs of the customers more than any other telecommunications service provider in Malaysia presently. This has given them a competitive advantage, boosted enthusiastic sale and increased more customer loyalties. Through careful and in-dept. research in the characteristics if the Malaysian market, Celcom has created distinctive target markets for its products through creating a strategic marketing mix that just not makes the product available, but also affordable, convenient and unique at a consistent and flexible level. This is geared towards improving new and existing products as well as profit to the company.

3.4

MARKETINGMIX

3.4.1

PRODUCT

Celcom has developed an intangible attribute to the new products, to consistently meet or exceed customer ’s expectation, enhance speedy response to customers demand and attribute anticipate new customer needs. This will be achieved through investing in research for consumer  buying behaviour and product development.

3.4.2

PRICE

With high availability of internets across the Malaysian globes, a price  penetration strategy is advisa ble to enhance customer’s usage, and introducing the service. On the other hand, they would use that opportunity to increase price on improved products. Celcom should also be sensitive to the price elasticity of its product and overall consumer demand.

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3.4.3

DISTRIBUTION

Through gaining retailer’s cooperation and distribution channels across Malaysia, it would be easy for the service to reach the target market. The SIM PACK is light weight and would be easy to transport huge number of the product with the service in it across Malaysian market.

3.4.4

PROMOTION

Through educating consumers on product improvement and creating awareness to non-consumers, advertisement and sales promotion would be used to introduce the new service to the Malaysian market. (Celcom Official Website, 2009)

3.5

MARKET RESEARCH

Extensive market research is to be implemented to regulate customer’s satisfaction, anticipate and understand customer’s new need, and improve the  products to either make the customers delighted or satisfied. This marketing research comprises of two types, firstly the internal marketing research which would be done by team employed and directed by Celcom, and secondly research  paid institutions. The result from both researches will be compared and analysed  by the customer relationship team, to find a new year of maintaining quality customer-company relationship and brand loyalty. (Celcom Official Website, 2009)

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4.0

MARKET SUMMARY

4.1

COMPETITIVE FORCE

Celcom’s competition especially in advertising industry is very strong both on local, regional and national level, making Celcom the market leader in Malaysia. Following the sales strategy developed by their local rivals, Celcom Malaysia has improved their competitive level, through developing many telecommunications feature, providing quality services at considerable price. The competition in the telecommunication industry is very high with the latest introduction of a new telecommunications service provider (U-mobile). Celcom has reduced the cost of SMS from 50 cents to 25 cents and reduced the cost of call from 35 cents to 20 cents per minute. Many other competitive measures are expected to enter the market soon as well.

4.2

BARRIERS TO ENTRY

Basically in Malaysia, telecommunication service is not an oligopolistic business. There is full freedom of entry once the company have meet up with the requirements and is ready to fulfil the government obligations. There are many telecommunications service providers in Malaysia, ranging from local service  providers to international service providers. This makes the industry a purely competitive market. Nevertheless, Celcom has understood the need to make customers satisfied and providing not just what they need today, but what they will need in the future. Through advancing technology, they have made it difficult for small companies to enter the market, thereby, creating barrier to entry for other small companies.

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4.3

BUYING POWER (CUSTOMER)

In today’s society, consumers have less time for work and leisure. The hallmark characteristics for today’s product are convenience and ease-of-use. In fact, if the  product does not save time and is not easy to use, customers will simply ignore it. Such is the same for Malaysian market. The customer’s ideology of “quality service – less price” is still the ruling key to purchase. Understanding this is basics in every industry. Have been provided with many choices, the consumers in Malaysia normally go for the best service that offers the least price.

4.4

PURCHASING POWER (SUPPLIER)

Technology plays the most important role in this sector of the Malaysian market. Manufacturers understand the consequences of delayed supply, or insufficient supply when the demand and market price is high. This is why they make use of the best technology available to provide quality service to their customers. Many suppliers in Malaysia are more capital oriented than service oriented. This means that they can only provide you with the best for the highest cost that is a “more 

for-more” marketing strategy. This makes the purchasing power to be vested more on the hand of the market leaders, and this is another competitive advantage Celcom has over its competitors in the Malaysian market.

4.4

POLITICAL FORCES

There are no expected political influences or events that could affect the operation of Celcom in Malaysia. This is because; Celcom is a registered company and functions under company provisions Act of the Malaysian law. But as a company in Malaysia, they have to function under the directions of the Act.

4.5

TECHNOLOGICAL FORCES

Celcom currently offers the best broadband network in Malaysia. Technology is the fastest growing market trend nowadays. To maintain their position as market leader, Celcom has enhanced their products technologically to keep the Malaysian telecommunications updated with ever technological advancement.

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4.6

CURRENT MARKETING OBJECTIVES AND PERFORMANCE

Celcom sends personal sales representatives to market their products on potential customers and create service concepts for their business or choice of order. Specifications are then sent to suppliers. This enhances more customer loyalty and relationship with the company. Although some of the customers do go on credit, 20% of the annual sales are obtained from this form of marketing sales and this is designed to reach their objectives of being the market leader and providing quality services for the customer and profit to the company in return. This is a potential advantage they have over their competitors as well. Celcom’s current marketing strategy to maintain customer-company relationship with potential customer.

5.0

FINANCIAL STRATEGY

5.1

CONTROL AND PERFORMANCES STANDARDS

The following performance standards and financials are suggested. •

The total budget for launching the new product, research, and customer’s survey will be equal to 80 percent of the annual promotional budget for the  product introduction year.

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Each team is responsible for reporting all financial expenditures, including  personnel salaries and direct expenses, for their segment of the project. A standardized reporting form will be developed and provided by the marketing director.

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The marketing director is responsible for adherence to the project budget and will report overages to the company president on a weekly basis. The marketing director also is responsible for an y redirection of budget dollars, as required for each project of the business analysis team.

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The new product offering would be evaluated on quarterly bases to determine its profitability. Product development expenses will be distributed over a two-year period, and will be compared with gross income generated during the same time period.

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6.0

CONTROLS STRATEGY

6.1

IMPLEMENTATION SCHEDULE

Activities, responsibilities and time for completion: all implementation are designed to create customer awareness and boost sales

6.2

MARKET ORGANIZATION

Because the new product requires extensive commercialisation to match customers need, it is necessary to organize the marketing function by customer groups. This will give Celcom the opportunity to focus its effort on the need and specifications of each target market. Celcom marketing efforts will be organized around the following marketing groups:

a)

Manufacturing group,

 b)

Business-to-business group,

c)

Customer satisfaction group, and

d)

Customer relationship group.

Each group will be headed by a Sales Manger who will report t o the marketing director. Each group will have full decision making authority and responsible for marketing the new product to the target customers within the segment. These changes in marketing organization, enables Celcom to be more cr eative and flexible in meeting customers’ need, reduce highly centralized management hierarchy and finally, give better opportunities to monitor the activiti es of competitors.

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7.0

SWOT ANALYSIS

7.1

STRENGTH

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Celcom maintains a product differentiation strategy resulting from a strong market orientation, commitment to high quality, and customization of  products and services.

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There is little turnover among well-compensated employees who are liked by customers. The relatively big size of the staff fosters communication and quick response to client’s needs.

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A long-term relationship with the primary suppliers results in shared knowledge of the product’s requirements, adherence to quality standards, and a common vision throughout the development and production process.

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The high percentage of sales, suggest a satisfied customer base as well as  positive word of mouth, which generates new business per year.

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Being the oldest telecommunications service provider in Malaysia, has given Celcom a competitive edge and increased customer’s trust and loyalty to the  brand.

7.2

WEAKNESS

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Celcom’s current facilities are crowded; there is little room for new employers or equipment’s to fit into the company.

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Celcom is reactive rather than assertive in its marketing efforts because of its heavy reliance on customer’s reaction for product satisfaction.

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While the staff size improves growth and communication, it also impedes commitment on the side of the staff and lack of specialization.

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Both the product line and the client base lack divers ification. Dependence on current recorder rates could bleed complacency, invite competition, or create false sense of customer satisfaction. Development of a product that would  provide better quality service by the competitors would probably put Celcom out of business.

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The non-seasonality of the products and services creates bottleneck in  productivity and cash flows, places excessive stress on the personnel and strains on the facility.

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The poor niche market could be a competitive advantage for their competitors to gain an advantage over them, and this could lead to a dramatic decrease in customer’s loyalty.

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High cost of products and service could alter the buying power of the consumers, especially in this time of global recession.

7.3

OPPORTUNITIES

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Advertisement in Malaysia alone exceeds 200 million Malaysian Ringgit annually. More than 20 million Ringgit is spent on specialty advertisement which is the potential for Celcom’s growth.

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Celcom is currently the Malaysian partner of Vodafone.

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Celcom is currently doing nationwide promotion using power icons like including international footballers Steven Garrard, Michael Owen, Ryan Gigs and Robert Pires and Chinese entertainers JJ Lin and Wang Lee Hom as well as local actress Maya Karim.

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Celcom currently has the widest 3G and HSDPA coverage in Malaysia since its launch on 17thmay, 2005.

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Celcom provides many products and services that suites dif ferent customer needs, ranging from economic, business, and family and leisure satisfaction.

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The director and manager of the company, Dato’ Sri Jamaludin Ibrahim is currently working with the company for the seventh year, this is different when compared with other telecommunication service providing companies and with his full experience, he has helped guide Celcom to a resting edge with quality management.

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As more and more Malaysians look for ways to keep in touch with each other, Celcom’s popularity and quality services has helped draw more customers t o the company through customer relationship and brand loyalty.

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7.4

THREATS

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Reengineering, right-sizing and outsourcing trends in management may alter traditional channel relationship with brokers, dealers, and distributors or even lead to elimination of the channel.

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Specialty advertisement through promotional items relies on gadgetry and ideas that are new and different. As a result, product life cycle may be quite short.

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Completion from other telecommunications service providers is strong.

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High cost of products and service would be a competitive advantage to their rivals over customers, through implementing low cost quality products and services.

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There are no barriers of entry and this could be a great threat because it could make new fast productive companies to come into the market and tr y to gain a stand of their own.

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Fast technological advancements would result in faster product life cycle, increase the need for improvement and might result in low sale of less quality  products, or products with less technological features.

7.5

MATCHING STRENGTH TO OPPORTUNITIES & CONVERTING WEAKNESS AND THREATS

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The acceptance of technological advances and the desire to control time creates a potential need for technologically rich products with varieties of features.

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Celcom must modify its management hierarchy, empowering its employees through a more decentralized marketing organization.

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Celcom should consider diversifying its product line to satisfy new market niche, as well as developing products that are seasonal to boost sale.

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Celcom should consider surveying its current customers and its customers’ client to better understand their needs and changing dreams.

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Have gone into partnership with Vodafone, Celcom should consider establishments in its neighbouring countries, especially the lower technologically advanced ones like Vietnam, Laos, Myanmar etc.

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8.0

COMPETITION ANALYSIS

8.1

DIGI

8.1.1

OBJECTIVES AND STRATEGY OF DIGI

The main objectives of Digi are to become the main market leader in Malaysian market. This they have done by implementing many marketing strategies to  persuade customers. This strategy includes the Digi family and friends, 18 cent per any local call, reward on reload according to the amount reloaded within a month and mass advertisement.

8.1.2

STRENGTHS OF DIGI

The main strength of Digi is the market size they occupy through their extensive marketing strategy and promotions. This has made them one of the market leaders and their service are largely demanded across the Malaysian market.

8.1.3

WEAKNESS OF DIGI

Their main weakness is limited coverage across Malaysia and the world. For example, sometimes when you send message to African continent with Digi, the message will not be delivered to the recipient.

8.1.4

SIZE AND TREND OF DIGI IN THE MARKET SHARES

Digi currently holds the second largest trend in the Malaysian market shares.

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8.2

MAXIS

8.2.1

OBJECTIVES AND STRATEGY OF MAXIS

Maxis are one of the new entries into the telecommunication service  providers market, and their main objective is to get as much customers as they could. This they have down through mass advertisement, sponsoring sports programmes, rewards to their customers and organizing shows for students and the public at large.

8.2.2

STRENGTH OF MAXIS

Their sponsorships for sporting programming is dr awing many customers attention since Malaysia is a country vast in sporting activities.

8.2.3

WEAKNESS OF MAXIS

Their services are inconsistent, due to poor and limited coverage as well as  products feature.

8.3

TUNE TALK

8.3.1 Strength

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Lowest SMS rates to all networks.

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Lowest IDD call rates.

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Same domestic call rate to all network

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Partnership with Air Asia, top up and fly with Air Asia.

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Auto top up available which also act like post-paid

8.3.2 Weakness

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Limited features such as MMS, Video Call and 3G.

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Only prepaid service is provided.

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Less promotion and plan.

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8.3.3 Opportunity

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People’s perception about the cheap rate as it shares the identity with its Air Asia.

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Through influence, may become a trend among teenagers.

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All calls are at a flat rate with no hidden charge.

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Priority in movie and music tickets

8.3.4 Threats

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Other brand such as Digi, Maxis and Celcom control the market.

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Other network service provider offers better rates which has more  publicity.

•

8.4

Low signal is some area.

U MOBILE

8.4.1 Strengths

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Domestic market

8.4.2 Weaknesses

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Cost structure

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Small business units

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Productivity

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Investments in research and development

8.4.3 Opportunities

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 New products and services

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Global markets

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Growing demand

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Growing economy

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8.4.4 Threats

8.5

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Technological problems

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Cash flow

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Increasing rates of interest

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Increasing costs

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Increase in labour costs

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Government regulations

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External business risks

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Rising cost of raw materials

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Tax changes

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Financial capacity

TELEKOM MALAYSIA

8.5.1 Strengths

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Monetary assistance provided

8.5.2 Weaknesses

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Investments in research and development

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Productivity

8.5.3 Opportunities

•  New products and services

8.5.4 Threats

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Increasing costs

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Government regulations

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Price changes

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8.6

P1 YMAX

8.6.1 Strength

First mover & market leader advantage Packet One (P1) is the first telecommunication firm in Malaysia to deliver WiMAX services to the  public (Malaysian Country Pulse Broadband, 2009).

Technology transfer or sharing from parent company Green PacketP1 is a subsidiary company of Green Packet, a technology company from Silicon Valley, and gets its technology and designs from Green Packet. This helps boost P1as they can learn from their parent company.

Lower susceptibility to interference WiMAX is also less susceptible to interference from the weather such as rain as compared too other wired and wireless broadband (Lai, 2009). This makes it a much more suitable choice given the local weather.

8.6.2 Weakness

Coverage ± Only 35% of Malaysia as P1’s WiMAX service is still relatively new and in the process of being fully implemented, coverage is still not optimal especially in East Malaysia. P1 is expanding and hoping to reach 50% coverage for Malaysia but the current low coverage of 35%leaves a gap and opportunity for competitors to move in (Lai, 2009 & P1’s service getting broader, 2009).

Packages offered are not as value for moneyP1’s packages have Competitors such as AMAX offer unlimited bandwidth (no fair use  policy) and the early termination fee of RM999 is over the top and not many people would accept such a term (Packet One Networks, 2009).

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8.6.3 Opportunity

States going wireless ± Penang deal with P1This provides opportunities as P1 may be able to take advantage of this need and be the most widely used, known or eve sole provider in the state. This will put them ahead of their competition as well as help to establish credibility and reputation.

Increase of preference for mobility, broadband, m-commerce and ebusiness The boom of e-businesses and m-commerce, doing things such as  paying bills online and being on the go creates an opportunity for P1 as the trend is to utilize and makes the best of all the time you have. This is due to the increasing preference for full mobility, doing things on the go and online connectivity (GMID, 2009).The increase of broadband users is also a sign that the market would be ready for P1 WiMAX if the service and  promotions are implemented successfully.

Technological advancement ± MIMOS WiWi The new MIMOS WiWi allows for better penetration into the broadband market such as being able to reach rural areas where pulling cables are a costlier, time consuming and inefficient option. If P1 is able to build a strong brand name, excellent reputation and services, it will be able to capture the lion’s share of the market.

8.6.4 Threats

REDtone is heavily investing in East Malaysia with REDtone heavily investing and focusing in East Malaysia (Loh, 2009), REDtone has managed to establish themselves and build credibility there. This creates an obstacle for P1 whose objective is to be the leader in the wireless  broadband industry (Packet One Networks, 2009). P1 will find it much harder to penetrate that market without heavy investments in promotions and improving their services or REDtone’s service deteriorates

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Being the oldest and most experienced amongst the seven, Celcom has man y competitive advantages against its major rivals Digi and Maxis. They currentl y possess the highest trend in the market share, giving the highest coverage, many products featur e and having the highest customer size in the Malaysian market. They are applying many future strategies to maintain their position as the market leader in the Malaysian market like niche marketing, business package development, intercontinental and international service expansion.

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OPINIONS & RECOMMENDATION

In my opinion, Celcom have done well for their market. They also have controlling interest in mobile operator in Asian. They got the cheapest plan for subscriber with minimum budget. They improve quite a lot in wider coverage also. I also like t o suggest on Blackberry package that they offer to users. For young adults, I believe a monthly RM50 commitment fee for voice call will suffice. Celcom price for monthly subscription fee at RM118, meanwhile Digi at RM108 and of course Maxis is the expensive about RM200. About the Term and Condition on Blackberry Plans, I hope they will state clearly Term and Condition compared to Maxis. They have very detailed Term and Condition.

Celcom need to understand and respond to its competitors' business structure and strategies, and capitalize on their weaknesses. Stay up to date on the major developments affecting the company.

The company's core strengths and weaknesses and areas of development or decline to be analysed and presented in the profile objectively. Recent developments in the company covered in the profile will help to track important events.

Equip itself with information that enables Celcom to sharpen its strategies and transform its operations profitably.

Opportunities that the company can explore and exploit should be sized up and its growth  potential assessed in the profile. Competitive and/or technological threats should be highlighted.

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Gain key insights into the company for academic or business rese arch.

Key elements such as SWOT analysis and corporate strategy are incorporated in the  profile to assist Celcom’s academic or business research needs.

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CONCLUSION

As a conclusion, even with enough IT infrastructure within the company, it doesn't necessarily the company can utilize it efficiently and effectively. In order to achieve optimize performance, a lot of effort and planning must be made before i ntegrating a new IT infrastructure to be used in the company. Furthermore, doing a survey and asking opinions from the employees will surely increase the acceptance of the new technology into the company.

For any given organization to market any new product, marketing planning is strategy used to coordinate a well-planned product testing and launching. A well designed marketing  planning ends up bring back positive results for companies. These strategies if implement as stated would probably bring out a well-balanced positive result. The by understanding the environmental factors and analysis the strength, weakness, opportunities and threats of Celcom, we had the better opportunity to look into the situation as if we were their new product managers. This gave us the chances to build a better marketing plan that if well implemented, would bring in a positive result.

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REFERENCE

a) http://www.researchbeam.com/celcom-axiata-berhad-strategic-swot-analysis-reviewmarket  b) https://www.celcom.com.my/corporate/aboutus?assetType=PBO_List&assetID=131363 3487047 c) https://en.wikipedia.org/wiki/Celcom d) Joe, T, John, B & Keith, P, 2005, managing innovation: integrating technological, market and organizational change, 3rd Ed, john Wiley, England. e) Philip, K & Armstrong, G 2001, principles of marketing, 9th edit, Prentice Hall, New Jersey. f) William, D & Jerome, M 1999, Basic marketing: a global-management approach, McGraw-hill, London. g) https://en.wikipedia.org/wiki/Yes_4G h) http://www.nst.com.my/news/2016/06/155836/yes-unveils-new-double-data-4g-lte plans-4g-volte-smartphone i) https://en.wikipedia.org/wiki/Maxis  j) http://manustrategy.blogspot.my/2012/02/maxis-strategy-and-swot-analysis.html

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