Strategy That This Company Has Adopted Marketing Essay

Published Date: 23 Mar 2015

The company is formed of four strategic business units - Mobile, Digital TV, Enterprise and Telemedia. The former business provides services in India, Sri Lanka and Bangladesh. The Telemedia business offers broadband, IPTV and telephone services in 89 Indian cities. The Digital TV business provides DTH TV services across India (Airtel, 2010).

The objective of Airtel is to provide end-to-end telecom solutions to its corporate customers nationally as well as internationally long distance services to Telco's.

Airtel has achieved specialization in offering customized solutions to address unique needs and requirements of different industry; IT, education, media, Manufacturing and distribution, telecom, Government and retails etc. (Airtel, 2010).

Due to Airtel's co-opetion with leading technology companies all around the world and infrastructure, it presents entire range of telecom solutions. These solutions enable corporate to network their offices nationally and worldwide, give them infrastructure to operate important business applications and offer them ways to bond with their consumers and employees (Airtel, 2010).

PORTER'S GENERIC COMPETITIVE STRATEGIES

Cost Leadership Strategy

Many customers have high expectations for purchasing at lower price, goods and services. A Number of firms engage themselves in activities which allow them to pursue low cost of production than its competitors and results in cost leadership in an industry (Hitt et al., 2009). Airtel has gain cost leadership by managing its processes and resources efficiently and effectively. It has successfully offered its products and services at lower prices by bringing down its operational costs. Due to the profit margins being greater or the increase in sales volume, Airtel has also earned higher profits.

The Cost Leadership Strategies for Airtel works great during a price war in the industry. Due to it's Low Price Strategy, the firm has acquired profits compared to the competitors (MTNL, Idea, Tata, RCOM), which are bound to make losses (Rediff Moneywiz, 2010).

Focus Strategy

Firm chooses Focus Strategy when they intend to use their core competencies to serve needs of a particular segment of the industry rather than the entire market. This particular segment can be either a particular buyer group, or different segment of a product line, or a different geographic market. This results to customer's loyalty to the firm and therefore new competitor is resisted to enter in that area (Hitt et al., 2009).

Airtel's focus strategy is to focus on the customers with the monthly billing of landline more than Rs 10000 (>S$285). Airtel can also offer its service to a specific geographic area.

Differentiation Strategy

A company which adopts Differentiation Strategy needs to have sufficient ability and skills, so that they can differentiate their product from the competitors and influences the customers to pay a premium price. These attributes can be superior product quality, product itself, the delivery system or the market approach. Aim is to create brand loyalty towards customers (Eldring, 2009).

Due to this Strategy, many firms have successfully accessed advanced scientific research, a high level of skilled labour force, and effective customer communication strategies, etc.

Airtel offers free digital EPABX with free leased lines (no connectivity charges). Therefore the firm provides newest EPABX to the customer which costs approx Rs 50,000 (~S$1430).

Hyper-Competition

Bharti Airtel has been able to achieve dominant leadership position in the market with an RMS of 33% which is well ahead of the closest operator, mainly due to focusing on development of its global portfolio of services and networks. If any competitor wants to be on the top of league, it has to face some of the important factors like increase their international reach, right investments in the global cable systems as well as expansion of international points of presence (PoPs) and interconnects with the international carriers. Airtel just did that (Voice & Data, 2010).

Apart from this, Airtel emphasised on creating direct interconnects and relationships with international operators. It has signed over 400 interconnect agreements till date for these direct interconnects.

Milan Rao, CEO, global voice, Bharti Airtel says, "Despite the hyper-competition in the Indian wholesale market in the last two years, Airtel has emerged as a dominant leader in both NLD and ILD space. With our investments in domestic and international networks, global PoPs, strategic interconnects and state-of-the-art service delivery platforms, we are now poised to extend this leadership to the global market"(Voice & Data, 2010).

The government of India has taken major initiatives to liberalize the NLD and ILD licenses to increase the growth of the IT and BPO services in the country which will lead to more competition and force operators to focus on the QoS. This will cause not only Bharti Airtel, but all the operators to increase their investment to ensure 100% QoS to retain customers (Voice & Data, 2010).

Co-opetition

Co-opetition is the notion of concurrently winning in competition and cooperation within your market. This can effectively increase the broader market for everyone. Small firms can more readily benefit from co-opetition since the agreements can be easy, and small partners can grow faster than the large ones due to laziness and bureaucracy created by size.

Bharti Airtel has been a regular follower of co-opetition. Few of the many stakeholders of Bharti Airtel are Sony-Ericsson, Nokia and Sing Tel, holding a strategic alliance. This means that Airtel has the access to knowledge and technology from different parts of the telecommunications world. The co-opetition with Google develops the brand, and also gives Promotioning opportunities in India for Google. Now, iPhone will be introduced in India via distributorship of Airtel. Another example of Co-opetition is partnership held with BlackBerry Wireless Solutions.

Bharti Airtel is broadening with another partnership with Vodafone Essar and Idea Cellular to make a brand new sovereign tower firm called Indus Towers (Wireless Federation, 2010). This new venture will take over more than 60% of India's network towers. Bharti Airtel has also reportedly entered into strategic business alliance with Cisco to assist the growth of Indian enterprises (Airtel, 2010).

In June 2010, the company teamed up with Taiwan-based Smartphone manufacturer HTC Corporation to launch India's first Android powered mobile phone - the HTC Magic (Airtel, 2010).

Bharti Airtel Ltd. will partner with Ericsson and Huawei to expand and manage its mobile network in Bangladesh (Comm, 2010).