Strategic Management and the Position of Dialog Axiata PLC - Case Study Example

? Analysis of Strategic management and the position of Dialog Axiata PLC - Sri Lanka Contents Contents 2 Introduction 3 Critical Analysis of the Strategic Position of Dialog Axiata PLC 3 Analysis of Dialog Axiata Plc based on SWOT Analysis 6 Analysis through Porter’s Diamond Model 7 Analysis of Dialog Axiata through McKinsey’s 7s Framework 9 Strategic Management Position in Dialog Axiata Plc 11 Practice of Management Information Systems in Dialog Axiata Plc 12 Conclusions 13 References 15 1 Introduction Dialog Axiata PLC is one of the largest telecommunication companies operating in the region of Sri Lanka catering to the needs of a large number of cell phone subscribers. Further to catering to the needs of the mobile market of Sri Lanka the company also renders a large range of other connectivity services in the region. The company endeavors to sustain this large market through the process of continuous innovation and encouraging the employees to take entrepreneurial decisions in regards to their activities. Moreover the recruiting team of the company is always in the hunt for a pool of talented human resources that would help the company in setting new benchmarks (Dialog, 2011). The company reflects a huge financial growth during the first quarter of the 2011 period compared to that of the 2010 period which showed a huge growth by around 64 percent. Further in regards to the market for mobile phones and other telecommunication services the company reflects a growth by around 10 percent in a comparison drawn between the first quarter of the 2011 and 2010 period. However in close connection to the above facts the operating costs of the company along with other domestic and international installation charges grew in the first quarter of the 2011 period in sharp contrast to the 2010 period. (Dialog-a, 2011). Thus the paper in this connection focuses to understand the strategic moves taken by the company in restoring its competitive position while tending to reduce the current operational cost. Critical Analysis of the Strategic Position of Dialog Axiata PLC In the process of critically analyzing the strategic position of the business organization firstly the parameters upon which the company becomes able to sustain its leadership in the market is analyzed. The company must have a definite mission based on which it sets the strategies to successfully satisfy the same. Further the company must set some definite goals and objectives which must be adequately based on the mission statement of the company. Strategic business units of the company must be identified that would help in meeting the stated objectives. Moreover the hierarchal or the organizational structure of the concern must be evaluated in terms of the division of the total responsibility among employees thereby enhancing on the accountability parameters. Finally the company management is also required to set adequate monitoring systems to rightly monitor the activities taken to pursue the stated goals and thereby to set effective remedies to help reduce such gaps (Schein, 2010, p.74). In regards to the above discussion the vision, mission and value structure of the company would be analyzed. The company shares the organizational vision of being the leader in the Sri Lankan communication market through the innovation rendered in the field of communication technology. This strategy focused by the company would help in enriching the social image of the concern. Working on the above vision the company thereby focuses to set the organizational mission of helping to render potential activities in the sphere of sustaining better relationships with the customers. Further the company also desires its business processes to be highly flexible in meeting the changing demands of the market. This sets the organizational culture of the company which increases the parameters of accountability both in the internal and external sphere and also encourages the growth of team activities in the concern (Dialog-b, 2011). The above strategic analysis of the company fulfills the additional parameters of the general strategic statement. Firstly the company identifies the strategic objectives or ends in the course of formulating the tenets of organizational mission and vision. Further the domain of the firm’s activities are also clearly defined in terms of geographical territory concerning the Sri Lankan market, the different categories of consumers and the different organizational areas through which the company tends to render services to the society. Finally the company, Dialog Axiata PLC also focuses on the different strategic advantages which the company ought to earn while aiming to fulfill the organizational mission and vision statements. This shows that Dialog Axiata PLC has successfully designed an effective strategic map to successfully implement the different operational activities in the Sri Lankan market (Collis and Rukstad, 2008, p.3-5). Speaking on the firm’s financial strategies it is increasingly observed that while focusing on the generation of large amount profits the company also relentlessly worked to help grow the market share of telecommunication products and services by fulfilling the needs of the consumers. The company management also focused on augmenting the value of the shareholders by rendering of dividends. Again speaking on the aspect of cost leadership Dialog Axiata PLC worked relentlessly to sustain its market leadership in the Sri Lankan region both in terms of cost and quality in the different products and services rendered (Dialog Axiata Plc, 2010, p.5). The company to capture the local market strongly focuses on working on price strategies to render low cost services both in terms of broadband and local calls and as well as renders a variety of options in cell phones at reasonable costs (Dialog-c, 2011). This cost reducing pricing strategies has helped the employees to think more innovatively and in an entrepreneurial manner. Working on division of responsibility the company divides the entire workload by creating separate business units catering for the television market or rendering broadband services and also those catering for local and international services. The company renders different types of financial benefits to the employees in the form of bonuses, gratuity and other types of retirement benefits in addition to satisfactory amount of wages and salaries (Dialog Axiata Plc-a, 2010, p.80-81). In terms of non-financial benefits the company conducts high level training programs to enhance the productivity of the people to take leadership positions in future. Performance based incentives are also rendered to the employees to enhance the innovative climate in the organization. In terms of corporate social responsibility the company renders different kinds of social services to the people of Sri Lanka in the field of education, disaster management, and enhancing the communication networks with the people and with other business clients (Axiata, n.d.). Analysis of Dialog Axiata Plc based on SWOT Analysis Strengths The company which started its commercial services in the telecommunications market during 1995 gradually gained its stand as the market leader during the 2000 period. From the 2002 period the company became able to gain a marketing potential of around 50 percent in the total communication market in Sri Lanka. In terms of market capitalization the company is found to rank second in the Sri Lankan telecommunications market (de Soyza, n.d., p.2). Weakness As in other companies the business activities of Dialog Axiata Plc suffer from certain business risks in regards to their sales and operation activities. Moreover risks also arise in regards to the relationship patterns of the company to its investors and customers. However effective managerial polices help the company to mitigate the stated risks (Axiata, n.d.). Opportunities The region of Sri Lanka reflects large opportunities for helping in the growth of telecommunication companies like Dialog Axiata Plc. The region of Sri Lanka is growing gradually in terms of economic and cultural standpoints thus reducing the gap between rich and the poor. This enables companies like Dialog Axiata Plc to gain an enhanced market base (de Soyza, n.d., p.11). Threats Analysis shows that though the external market in Sri Lanka helped in generating profits and market revenues for Dialog Axiata Plc yet the business of the company pertaining to mobile broad banding activities is facing certain threats which are hindering its growth aspects. Thus proper focus must be rendered to mitigate such and help in business expansion in the stated sector (Axiata, n.d.). Analysis through Porter’s Diamond Model The Porter’s Diamond Model analysis the strategic position of a company in the light of its potential competitors based on four angles. Firstly the market potential of the company is analyzed based on the demands for the products and services produced. Secondly the model analysis the strategic potential of the company based on internal factors pertaining to the strategic decisions taken by the company management to counter potential competition and business threat. In the third case the model focuses on the external factors pertaining to the social, economic and political climate which would help the company to counter business growth in the stated region. Finally in the fourth case the industrial support gained by the company from other businesses existing in the region is analyzed. These four strategic sets help to understand the dynamic potential of the company while operating in the stated region (Johnson, Scholes, and Whittington, 2008, p.71-73). The analysis of the strategic position of Dialog Axiata Plc through the Porter’s Diamond Model can be enumerated as follows. In regards to managerial strategies it is observed that the management body of Dialog Axiata Plc works to enhance its relationship patterns with the different stakeholder groups like customers, investors and other interested groups to gain a more profound market in the Sri Lankan landscape. Further the management body of the company works strongly based on conducting potential market research to gain considerable insights about changes in consumer needs and make changes in the product and service portfolio. Moreover the practice of spontaneous innovation and business expansion activities has enabled the company to gain a larger space in the Sri Lankan region (Dialog Telekom, 2009, p.12-13). Secondly focusing on gaining support from the stated region it is found that the social and economical aspects of Sri Lanka help in the growth of the company. The country which is growing both in regards to economical and social standpoint reflects that large number of consumers is cropping up in the market to gain the advantage of cellular communications (de Soyza, n.d., p.11). The market for telecommunication services and products in Sri Lanka reflects a growing trend for demand of the offerings rendered by Dialog Axiata Plc helping it gain the position of the market leader. The growth in demand for the company’s products pertaining to mobile communications and broadband services and also in regards to the television services offered by the company has helped the company to gain large amount of profits and revenues. Again in terms of land line usages the Sri Lankan market also shows a huge rise in the demand for such products helping the company to gain an increment in revenues and market share in comparison to the previous year (Dialog Axiata Plc, 2010, p.9-10). Finally the telecommunication company in the course of its operation in the Sri Lankan market is gaining due support from potential companies in the field of communication technologies and services like Qualcomm and First Source Incorporation. The former company helped Dialog Axiata Plc to render enhanced services in the sphere of corporate social responsibility through helping it to render strategic services like disaster management operations. Moreover the company through the technological support of Qualcomm is being able to help render community services like education to the children residing in remote corners (Schwartz, 2007). Again through the help of First Source the company has been able to venture in the business process outsourcing sector. In fact the joint venture that Dialog formed with First Source helped the company to outsource its several business functions and gain an extended market base (Gamage, 2004). Analysis of Dialog Axiata through McKinsey’s 7s Framework The 7s Framework of McKinsey’s provides an insight into the competency framework of a company in terms of several factors. These factors are analyzed to understand the level of the firm’s competence while operating in the firm’s external environment. It is found that the companies based on potential strategies can help gain potential market and accomplish stated mission and vision objectives. Moreover the organization through its potential organization structure can gain optimal advantage from the available human resources. Thirdly the company through the help of effective installation of potential systems can render services in a much more sophisticated and qualitative manner to gain business competence. Fourthly with the development of the existing human resource base through continual training and knowledge sharing functions the company can gain considerable expertise to render potential services to its customers. Fifthly the company in the course of enhancing the skill sets both in terms of technology and human capital gains competence to render more enhanced services to its customer base spread along large markets. Sixthly the different companies also reflect some potential operational styles and ideologies which in turn differentiate such from other companies and enhance its brand image in the eyes of the consumers. Finally in the seventh case the management desires to work in a collective fashion sharing organizational values and objectives among each other to help fulfill organizational objectives in a holistic manner. The fulfillment of the seven S helps the company to enhance its position in comparison to other companies competing in the same field (Joseph and Mohapatra, 2009, p.60). Speaking in terms of organizational strategies the management of Dialog Axiata Plc reflects large number of efforts to gain considerable expertise in enhancing its market and revenue base in the region of Sri Lanka. The strategies pertaining to innovation and enhanced consumer relationship helps the company to gain a larger market base in Sri Lanka and also in tapping potential opportunities. Organizational structure of Dialog Axiata shows that the company is headed by the directorial board followed by people pertaining to the senior management. This hierarchy then goes to encompass people of the middle and lower levels and also potential shareholder groups. The views of the different employee groups are taken to help perform effectively in the competitive sphere (Dialog, 2011).The company also works to enhance the relationships with both the internal and external people like employees and customers. The company management takes potential drives in conducting the training of employees to help develop their existing skills and competencies in order to fulfill organizational objectives in a productive manner (Dialog Axiata Plc-a, 2010, p.28-31). The company works on the paradigm of innovation and on an enhanced technological framework thus focusing on the systems framework. Moreover the management also works to pursue organizational goals in a collective fashion by engaging the existing pool of human resources and thus endeavoring to share potential business information with them to help pursue organizational goals through enhanced skill sets. Similarly working in close cooperation with other big companies in the telecommunications field the skill sets of the employees are enhanced to take on challenging tasks effectively. Moreover the organization has also developed a culture of transparency and collectiveness helping the employees and customers increase the loyalty factor. This increase in loyalty helps the company to sustain its leadership position in the Sri Lankan telecommunication market (Dialog Axiata Plc-a., 2010, p.27-31). The above analysis shows that Dialog Axiata Plc helps satisfy the factors of McKinsey’s 7S framework while operating to render services in the Sri Lankan telecommunication market in an enhanced manner. Strategic Management Position in Dialog Axiata Plc A business organization sustains its strategic position in the market through the management of its strategic potentials in regards to the products and services produced or rendered and also in regards to the different categories of customers. Business organizations through the production of large varieties in the goods and services produced aims to gain a larger market than its competitors. Focusing on the consumer’s side the strategic management position of the company can be formulated based on either on the needs of the consumers or in regards to the different geographical territories in which they are divided. The latter helps the company in devising separate strategies to be able to reach the different consumer bases spread along different areas (Porter, 1996, p.66-67). In regards to the above discussion the case of Dialog Axiata Plc can be well analyzed. The strategic management position of Dialog Axiata Plc can also be observed in regards to the different categories of communication services and products it renders to the Sri Lankan consumers. The company renders a host of different products and services pertaining to cellular and land line communication both focusing tom the domestic and international markets. Further the company also renders lucrative packages pertaining to broadband and satellite television sectors. This fact helps the company in setting before the customers a large number of potential options to choose from and thus gains a larger market and shelf space (Dialog-d, 2011). Focusing on gaining access to potential consumers spread along the rural region the company in close tie up with another wireless technology provider Qualcomm and other world bodies like the US Agency for International Development (USAID) and National Development Bank (NDB) has set up effective networking centers. These centers are continuously working to develop the rural workforce through enhancing their communication and productivity skills by rendering effective training on their work related processes (Schwartz, 2007). Other than focusing on the aspects of accessibility the company also focuses to render effective services in order to meet the different type of needs of the consumers. Firstly the company focuses on rendering considerable clarity in the different product and service offerings to the consumers. Secondly the private information of the different consumers is significantly protected by the company which increases the factor of reliability. Thirdly the company while producing the different mobile and landline gadgets and accessories strictly confirms to the safety guidelines and certifications. This also enhances the reliability of the consumers over the company. Fourthly the telecommunications company takes special initiatives to help safeguard the children from wrong uses of mobile communications. Finally in the fifth case the company management also encourages the consumers to generate effective feedback to help them better up the services domain (Dialog Axiata Plc-a, 2010, p.28-31). Practice of Management Information Systems in Dialog Axiata Plc The concept of Management Information Systems reflects the processing of information based on a computerized framework. Business organizations through the use of effective management information systems become able to get quicker access to large volumes of potential data. These data sets help the company in the formulation of right business strategies. Different types of organizational functions pertaining to planning, organizing and controlling activities are carried out based on sophisticated information sets which are gained through use of management information systems (Sadagopan, 2004, p.1). Dialog Axiata Plc strongly focuses to render integrity and transparency in the process of information sharing while engaging in communication to the different stakeholders. Potential information is shared by the company with the different stakeholders both internal and external in an unbiased fashion. The stakeholder groups consist of employees, customers, investors, government and the large number of non-profitable organizations operating in Sri Lanka. Further the telecommunications company also focuses on conducting large amount of potential market research activities to gain potential information from the external market which is then shared in an integrated fashion with the different stakeholder groups. This process envisaged in the company helps it in formulating effective strategies to counter the competition from external players. The different stakeholders can render effective views that would again help the company management in formulation of the right strategies. Further the information systems of the company in regards to gaining such potential data need are effectively modified through the creation of blogs and other chat machines to help integrate the views of the different stakeholders. The different stakeholders can effectively vote against the decisions taken by the company management in regards to the data gathered on potential issues. Thus the management information systems practiced in Dialog Axiata Plc helps in enhancing the stakeholder relationships with the management and show the integration of both hard and soft data (Dialog Axiata Plc-a, 2010, p.14). Conclusions Dialog Axiata Plc is a large telecommunications organization operating in the region of Sri Lanks which helps in rendering large number of services in the field of mobile communications, landlines, broadband and a host of other services by focusing on both the domestic and international regions. This company working to render a variety of products and services along with rendering large number of attractive promotions helps in attracting large number of consumers. Further the company also works to formulate strategies based on gaining technical expertise to gain access to rural market bases wherein it renders enhanced social services and also gains a wider market. The telecommunications company focusing on the consumer aspect tends to regulate the services aspect to help protect the level of consumer privacy. Further the company also works to gather large amount of information from the external market through market research activities and then feeds such in the modified information systems of the company. This fact helps in effectively integrating the different stakeholders to take potential decisions in a collective fashion. Thus Dialog Axiata Plc as a telecommunication company is found to counter effective strategies to sustain its market leadership position in the region of Sri Lanka. Dialog Axiata Plc is also endeavoring to diversify into related areas like Business Process Outsourcing through the help of information technology companies like First Source thus not only gaining an increased market share but also endeavoring to increase potential revenues. This move of the company would help build its strategic base to tap more international markets and thereby gain a global presence. References Axiata. (No date). Corporate Responsibility. [Online]. Available At: http://www.axiata.com/about-us/corporate-responsibility. [Accessed on July 15, 2011]. Collis, David J. and Rukstad Michael G. (2008). Can You Say What Your Strategy Is? Harvard Business Review. De Soyza, M. (No date). Dialog Telekom’s CR Business Case : Enabling an Information Society. [Pdf]. Available At: http://commdev.org/files/2621_file_Telekom.pdf. [Accessed on July 19, 2011]. Dialog Axiata Plc. (2010). Group Chief Executive’s Review of Operations. [Pdf]. Available At: http://www.dialog.lk/content/uploads/pdfs/annual_reports/2010-group-review-operations.pdf. [Accessed on July 15, 2011]. Dialog Axiata Plc-a. (2010). Delivering Shared Value. [Pdf]. Available At: http://www.dialog.lk/content/uploads/pdfs/sustainability_reports/2010-independant-assurance-and-GRI-content-check.pdf. [Accessed on July 15, 2011]. Dialog. (2011). Overview. [Online]. Available At: http://www.dialog.lk/about/overview/. [Accessed on July 13, 2011]. Dialog-a. (2011). Dialog Group Records Strong Growth in First Quarter. [Online]. Available At: http://www.dialog.lk/news/dialog-group-records-strong-growth-in-first-quarter/. [Accessed on July 13, 2011]. Dialog-b. (2011). Our Values. [Online]. Available At: http://www.dialog.lk/about/overview/corporate-profile/our-values/. [Accessed on July 13, 2011]. Dialog-c. (2011). Personal. [Online]. Available At: http://www.dialog.lk/. [Accessed on July 15, 2011]. Dialog-d. (2011). Responsibility. [Online]. Available At: http://www.dialog.lk/about/responsibility/. [Accessed on July 15, 2011]. Dialog Telekom. (2009). Enriching Sri Lankan Lives Through Responsible Value Creation. [Pdf]. Available At: http://www.unglobalcompact.org/system/attachments/9605/original/2009_Dialog_Telekom_Sustainability_Report_2009_full.pdf?1300296066. [Accessed on July 19, 2011]. Gamage, M. Sri Lanka’s Dialog Axiata tied up with India’s Firstsource Solutions to expand BPO business. [Online]. Available At: http://www.asiantribune.com/news/2011/05/03/sri-lanka%E2%80%99s-dialog-axiata-tied-india%E2%80%99s-firstsource-solutions-expand-bpo-business. [Accessed on July 19, 2011]. Johnson, G., Scholes, K., Whittington, R. (2008). Exploring Corporate Strategy: Text & Cases, 7/E. Delhi: Pearson Education India. Joseph, P., and Mohapatra, M. (2009). Management Information Systems In Knowledge Economy. New Delhi: PHI Learning Pvt. Ltd. Porter, Michael E. (1996). What is Strategy? Harvard Business Review. Sadagopan, S. (2004). Management Information Systems. PHI Learning Pvt. Ltd. Schein, E. (2010). Organizational Culture and Leadership. John Wiley and Sons, 2010. Schwartz, M. (2007). Qualcomm, Dialog Axiata PLC & USAID partner for high-speed rural wireless data. [Online]. Available At: http://www.dialog.lk/ecm/high_speed_rural_wireless_data.html. [Accessed on July 15, 2011]. Read More