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Management Essay
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According to Kourdi, Business Strategy is the plans, choices and decisions used to
guide a company to greater profitability and success. An inspired and clearly
considered strategy provides the impetus for commercial success, whereas a weak or
misunderstood strategy may lead to a company going out of business. Understanding
what constitutes "strategy" is therefore crucial in developing a successful business, as
is avoiding the tendency to label every plan and decision "strategic" when most are
about implementing strategy rather than setting it. Equally important is for a
strategy to be clear and effectively communicated to everyone with a role in
implementing it, and to shareholders and other stakeholders.
For the purpose of this assignment, my chosen company is the T-Mobile.
On 1 April 2010 Deutsche Telekom and France Telekom finalized the deal to merge
their UK based operations, causing Orange UK and T-Mobile UK to cease to exist,
although the brands was maintained for at least 18 months. On 11 May 2010 it was
announced that both the Orange and T-Mobile brands would remain on British high
streets, although their new merged parent company will be called Everything
Everywhere [1] .
The T-Mobile brand is present in 11 European countries - Austria, Croatia, Czech
Republic, Germany (as Telekom), Hungary, Republic of Macedonia, Montenegro, the
Netherlands, Poland, Slovakia and the United Kingdom, as well as the United States,
Puerto Rico and the US Virgin Islands.
Globally, T-Mobile International subsidiaries have a combined total of approximately
150 million subscribers, making the company the world's third-largest mobile-phone
service provider by subscribers and the third-largest multinational after the UK's
Vodafone and Spain's Telefnica.
T-Mobile offers both pay-as-you-go and pay-monthly contract phones. The paymonthly contracts consists of set amounts of minutes and 'flexible boosters' which
allow the customer to change them month-to-month depending on their needs. Prior
to this T-Mobile had a contract option known as 'Flext', which gave the user an
amount of money to use for calls, texts, MMS and mobile internet as necessary.
(Wikipedia, 2012)
and Vision. Mission and Vision are the inspiring words that would assist T-Mobile to
focus in a particular direction by keeping its values. The following are the two
business strategies of T-Mobile that need to be implemented.
3.1.1 Concentrate on continuous support to customers. T-Mobile is dependent on
their revenue-paying customers and cannot afford to stand by while those customers
decline. One-way to make sure T-Mobile survives the economic downturn is to keep
focusing on the customers. In a down economy people focus their spending on
companies they trust most, as they get choosy. Customers need to be valued, not just
for their money, but also for whom they are. In order to do this, T-Mobile has to
make sure that its staffs are addressing the customers' need for a strong sense of
belonging and significance. For instance, make sure that staffs are positive and
proactive with complaints rather than negative and reactive.
Leaders of a large consulting firm have told their staff that they should worry more
about their clients than about themselves, thinking up ways their clients can survive,
even if every microsecond isn't billable. Generosity might not bring anything now,
but help to position for the future, hopefully with healthier customers and bigger
ideas.
The big threat to T-Mobile is its competitors such as; 3G, Virgin, Vodafone, O2 and
others and without any doubt, the competitors are also working on strategies of how
to survive the down turn. So, T-Mobile has to try its utmost in delivering outstanding
services to its customers.
3.1.2 Expand in other countries. Other than the two strategies above, T-Mobile can
consider expanding in other part of the planet where recession is not present and
where the markets are on great demand and wide. The secret to survive a recession is
opportunity recognition. The first step in opportunity recognition is to know and
believe that there will always be opportunity for those who seek and pursue it.
Having focussed a lot in the European market and USA since its existence, T-Mobile
might consider penetrating the UAE and Asia markets. For instance, China and India
with its high population are two countries that are developing at a rapid pace. TMobile's good reputation in the Europe and USA is a good reason for other countries
to welcome its presence. Sometimes, it is best method to move away from the
recession zone and built from scratch for a better result other than keep fighting in
the bush with less profit or no profit at all. Having branches also around the globe
would support other branches that are in trouble such as recession, high inflation,
political and legal implication or even natural disasters.
The strategic plan above addresses the "what" which is the answer for the challenges
that T-Mobile are facing, the" why" and as from this point the implementation will
address the: who, where, when, and how.
Ensuring an honest and solid integration between departments. All the elements in
the business plan; the mission, vision, values, goals, strategy and behaviours need to
be understood by each and everyone. Simultaneously, commitment and support are
needed throughout the process at all management levels: strategic, tactical and
operational level.
After Implementation
Proper monitoring to make certain that targets are achieving in the time frame set
and rectifying any issues that may arise in order for the implementation to be a
success
T-Mobile has got numerous alliances with industry leading corporations in mobile
services & technologies, allowing it to offer better services to its customers
accordingly. For instance, Comcast Cable and T-Mobile USA, Inc. has announced a
strategic marketing alliance to offer the T-Mobile Hotspot Wi-Fi Internet service to
Comcast's nearly five million high-speed Internet customers. Thus, Comcast
customers can experience the convenience, reliability and value of a T-Mobile
wireless broadband connection when they're away from home, via Wi-Fi, at the more
than 4,000 T-Mobile Hotspot locations nationwide. (newsroom.t-mobile.com,2012)
T-Mobile's has been able to position itself as the third largest mobile company in the
world.
T-Mobile has rightly chosen its slogan "Everything Everywhere". The two words
define T-Mobile purpose on the planet, which instantly create some kind of
attachment and curiosity to existing and new customers respectively.
T-Mobile was first to introduce Google-based phone in the UK, using android
technology
Weaknesses - Weaknesses are the qualities that prevent T-Mobile from
accomplishing its mission and achieving its full potential.
T-mobile has no presence in the key emerging markets of the world although it is
classified as the third largest mobile company in the world.
Customers have reported complaints in consumeraffair.com. They faced issue such
as no signal and dropped calls on the roadside, where there was good coverage for
other carriers. (theultimatewireless.com, 2011)
Coverage of network is not prominent in some areas. It some areas it is intermittent
where as in some areas it is simply dead coverage of network.
Customers are moving from one mobile service to another and brand loyalty is not
present in the customers. Retention of customers' strategy is absence.
Offering limited bandwidth to its customers. The cap of 500 MB restrained T-Mobile
subscribers from using the Internet freely.
Opportunities - The environment within which T-Mobile operates presents
Opportunities
Increasing 4G-network coverage in the UK would make T-Mobile stand out from the
crowd. 4G, also known as LTE (long term evolution), are the next evolution of mobile
network technology.
With the customer base that keeps growing steadily, T-Mobile can could easily
surprised the world one day to climb the ladder from third to first largest mobile
company in the world.
T-Mobile could probably expand in ASIA, instead of concentrating only in Europe
and the US. China, India and UAE are the key parts in ASIA that T-Mobile could
consider expansion.
T-Mobile could also amalgamate with other mobile company as it did with Orange
mobile company. Thus, more mobile company under the same umbrella "Everything
Everywhere".
Threats - Threats arise when conditions in external environment jeopardize the
reliability and profitability of T-Mobile
Intensifying competition in the UK market. For instance, Virgin Company, 3G mobile
Company, O2 and Vodafone Company are the direct rivals of T-Mobile, which TMobile has to be very vigilant of.
Economic slowdown in the European Union and the US had an adverse effect on TMobile. People become very choosy and cautious when it comes to spend money
during those economic crises. Proper strategy is important in order to retain and
attract new customers.
European Union regulation on cross-border cell phone usage by customers
(managementparadise, 2011). Sometimes or most of the times Government
regulations can be bad for business, such as T-Mobile.
are finding themselves in turmoil to move a step ahead. The economic situation of
the intended country needs to be analysed carefully before venturing.
Socio-cultural: Socio-cultural influences encompass such factors as class, age and
gender, demographics as well as issues such as culture - both local and
international and diversity.
When T-Mobile started with its Short Messaging Service (SMS), it was the beginning
of the mobile multimedia era. T-Mobile also offers Multimedia Messaging (MMS)
Service, which enables customers to send and receive picture messages. Both SMS
and MMS are popular among women and are seen as a social tool for interact
(Mintel, 2011) .In the summer of 2002, T-Mobile launched their GPRS (General
Pocket Radio Service) which has seen great success ever since. Customers of TMobile generally gain access to the most up-to-date handsets, which are very
admired for mobile-conscious people.
With increasing trends towards the Android based mobiles and tablets, a new market
has emerged. Online application stores require high-speed connectivity; this has
increased the usage of Wi-Fi and Internet based services. Thus, a whole new market
for T-Mobile to emerge.
Approximately 20% of the population lives without a mobile phone. Not being heavy
users of mobiles-by their nature, retired people need less mobile contact than those
still going to work. Age groups beyond 55 figure little in to the marketing objectives
and advertising targets of the mobile industry. But it will come a day where the older
generation will be influenced and find the use of mobiles a necessity. (mintel, 2011)
It is now easier to switch networks more frequently particularly because handsets are
now offered 'free' as part of the service when customers sign up to a 12, or more
recently 18-month contract. Exceptionally with private customers (not businesses),
they can sometimes have their line rental discounted for a number of months
depending on the length of agreement. T-Mobile also offers 'Fix It' option, which
allows customer to choose their own free minutes and free text messages according
to their usage.
Technological: Better performance and faster mobile Internet speeds with T-Mobile
supercharged 4G networks. It's three times faster than standard 3G.4G network that
offers blazing-fast average download speeds of 10Mbps and peak speeds of up to
27Mbps. The market is competitive but T-Mobile is coping well and offering the best
to its customers with new 4G networks.
T-Mobile can also consider alliances with other companies that already have already
a telecommunication backbone / structure. Both together, hand in hand can offer an
excellent service to their subscribers. For instance, T-Mobile and COMCAST in USA
came together to better serve their customers. A quote from (newsroom.tmobile,
2012):
"Comcast Cable and T-Mobile USA, Inc. today announced a strategic marketing
alliance to offer the T-Mobile Hotspot Wi-Fi Internet service to Comcast's nearly five
million high-speed Internet customers. With today's announcement, Comcast
customers can experience the convenience, reliability and value of a T-Mobile
wireless broadband connection when they're away from home, via Wi-Fi, at the more
than 4,000 T-Mobile Hotspot locations nationwide. As part of this strategic
marketing alliance, Comcast high-speed Internet customers will receive a special
offer when they sign up for T-Mobile Hotspot through their Comcast portal
homepage. Comcast customers who subscribe to the T-Mobile Hotspot
service can surf the Web, check email or view streaming media at wireless broadband
speeds with a Wi-Fi enabled laptop or PDA at T-Mobile Hotspot locations"
These kinds of alliances would rapidly spread the name of T-Mobile around the
intended country.
Environmental: Although there is no evidence that they are harmful to public health,
transmitter masts are regarded by many as an unwelcome presence in the
environment, especially when they are close to schools. Discarded handsets also
constitute an environmental problem because of the hazardous materials they
contain.
"For a better world for you" is T-Mobiles environmental motto (t-mobile, 2011).
The aim is to minimize their business impact on the environment and all T-Mobile
companies in Europe have implemented environmental management programs in
order to reduce waste and energy consumption. Other solutions how to safeguard a
green environment is continuously reviewed. As demands of new technology
increases, more base stations is inevitable but T-Mobile recognizes genuine public
concern over mobile communications phones and network infrastructure.
Nevertheless, it is worth for T-Mobile to check if its presence would cause any
environmental issues in the intended country.
The significance of Stakeholders Diagram from Mindtools.com
at all attempt to make a complaint like in the examples in (3.1.1) instead all the good
words should be heard from customers. Failure to do so would compel customers to
look for other alternatives, such as looking for another providers, which can be done
at a click on the Internet.
In relation to the second strategy, the approach to customers would defer. T-Mobile
has to research about the market, the culture, the buying pattern, the cost and
standard of living. T-Mobile should get the trusts and build a good relationship of the
new market right at the beginning. There should be proper marketing, deals and
offers to attract the new market.
7.2 An awareness of the competitor's position in the market place needs to be known.
To do that, a competitive analysis needs to be performed and the diagram below
might help. It analyses the strength in four important areas such as: Creativity, level
of service, the cost that might incurred and the reputation position.
Diagram from Managingabusiness.com
Competitive analysis of the marketplace demonstrated that the major competitors
had a poor reputation and were not perceived to be innovative or adding value.
Hence, helping T-Mobile to be at the forefront of the game. For instance, the android
technology was a good shot for T-Mobile. The latter is famously known to be the first
provider to introduce it.
7.3 Other forces that can have an adverse effect on the changes are the suppliers.
Without suppliers' support, businesses including T-Mobile would not be able to
survive or even exist. The bargaining power of suppliers and the actions they take can
directly influence an organization. So, an excellent relationship is imperative and
long terms reasonable contract should be maintained between T-Mobile and its
different suppliers to gain competitive edge over its competitors. For examples,
Blackberry, Nokia, Samsung, Sony Ericson, Alcatel are among its suppliers.
7.4 Staff's sayings, interests and contribution are also vital to T-Mobile growth.
Workforce is directly impacted on an organization's performance. In an economic
downturn, employees become increasingly anxious about job security and financial
worries, satisfaction with the job they have, commitment to their company and
engagement with their work are all affected detrimentally. This trend could be selffulfilling in that disengaged employees could have a negative impact on T-Mobile's
products or services and lead to its decline, which would inevitably see the company
failing.
The employee's concerned are about whether or not they would keep their jobs and
whether or not they would be compensated if their company did not survive the
recession. So, T-Mobile has serious reason to be concerned about the emotional well
being of their employees by constantly motivating them, involving them, re-assuring
them, appreciating them and rewarding them.
7.5 Investors and shareholders concern are necessary to consider, as they are
injectors of capitals and cash into the business. Their main concern is the success of
the business without interfering about the mechanisms to make it successful. All the
answers about how to tackle potential risks need to be explained to them in order to
reassure the return on their investments. Recently T-Mobile USA has failed to
impress the MetroPCS Communications shareholders, which has disrupted a merger
between them due to a fall in revenue by 5.9% to $ 4.9 billion. (new.investors.com,
2012). Well, that's a bad example to convince the other parties to join T-Mobile.
Confidence is very important to investment in a recession.
5.6 Creditors are also important stakeholders who definitely have an interest in TMobile growth. If they were not willing to lend more money then the latter would be
in deep dilemma. So, good credit scoring, positive financial statement such as profit
& loss account, balance sheet and cash flow statement would be desirable to convince
creditors for the ongoing money borrowing.
Good professional relationships with the stakeholders and regularly interacting with
the stakeholders are crucial for project completion. Organizing regular meetings with
stakeholders, accompanied by documentation, will help boost the confidence levels
of shareholders. Lack of regular communication with stakeholders will instill in the
minds of the stakeholders needless apprehensions and unfounded fears. Thus, the
above stakeholders' analysis is crucial to T-Mobile, as any sort of reluctance on their
behalf would have an adverse effect, which may to lead to losing subscribers and goes
bankrupt.
organization to obtain competitive advantage. When the resources are combined they
can lead to the formation of competencies and capabilities.
According to Kourdi (2009), A better approach is to adopt a rigorous, dynamic and
time-based view of resources, the factors driving success or failure. That is, success is
determined by whether resources strengthen or decline.
8.1 Human resource: Having just a pool of staffs is not enough but a well trained and
experience team is needed. The first stage of implementing the strategy plan is to
make sure to have the right people on board. The right people include those
individuals with required competencies and skills that are needed to support the
plan. In the months following the planning process, expand employee skills through
training, recruitment, or new hires to include new competencies required by the
strategic plan.
If T-Mobile cannot afford to recruit then to reinforce the workforce, re-shuffling of
employees to perform different jobs is important. This can be done through job
rotation, job enlargement and job enrichment. It is also a mean to motivate staffs, as
the latter feel valued in knowing and performing different tasks. T-Mobile has to
ensure high morale at works, involving staffs in decision-making, creating team
spirits, providing good working environment and friendly frequent meeting. In short,
T-Mobile should create an environment that connects employees to the
organization's mission and that makes them feel comfortable. To reinforce the
importance of focusing on strategy and vision, reward success. The rewards may be
big or small, as long as they lift the strategy above the day-to-day so people make it a
priority.
T-Mobile directly employs around 36,000 people. It has 300 retail shops and 13
million mobile customers. (T-Mobile, 2011). They are the part of the biggest mobile
operator (Everything Everywhere) In UK. (bizyahoo, 2011). It has a young,
enthusiastic and trained workforce across the country that can be re-shuffling to
work in other countries if T-mobile is considering expanding in other countries like
China. Since the workforce is young, they will be easily adept to the new technology
of the merging company, for instance, Blackberry.
8.2 Financial resource: T-Mobile would need to have sufficient funds. The answer to
this would be analysis of the Balance sheet. Stakeholders' support like Shareholders,
investors and creditors support are primary and that would indicate whether TMobile could go ahead to invest in an implementation of a strategy. All the possible
costs need to be analysed and often, true costs are underestimated or not identified.
True costs can include a realistic time commitment from staff to achieve a goal, a
clear identification of expenses associated with a tactic, or unexpected cost overruns
by a vendor.
With revenues of 4777.80m and a growth rate of 2.5% shows enough potential to
venture (bizyahoo, 2011). Further to reduce costs, standardize procurement
processes to exploit market opportunities and synergies among the best use of the
most important functions of procurement. For the purposes of the Group's "Fix Transform - Innovate" will be pushed ahead on a global level, the development and
standardization of next-generation solutions. The Group's strong market presence
will help to gain worldwide partners that provide exclusive products and services.
(tmobile, 2011)
8.3 Physical resource: T-Mobile has stores all over the world. They have stores in UK,
Germany, Poland, Switzerland, Spain, France, Middle East, Africa and Asia. (tmobile,
2011). Thus, position itself very well in the market of mobile phones.
8.4 Information resource: T-Mobile like all companies has databases of information
about its customers, their personal details, billing details, contractual and noncontractual customers, etc, etc. Like wise, Orange, the merging company keeps all
information of its customers. They manage all aspect of customers, orange account
from policy to ordering, billing to reporting, support and network performance
reporting to maximize efficiencies and control costs. (tmobile, 2011). If considering
moving to another country then crucial information is needed through a thorough
PESTEL analysis.
9.1 Strategic Management Level also known as the top management, it is the highest
level and usually done by senior management. The top management is the ultimate
source of authority and manages goals and policies for an enterprise. They devote
more time on planning and coordinating functions. The decisions on the objectives,
committing resources such as money, time, and people in general is done here.
(Gabriel, 1995)
9.2 Tactical Management Level also known as middle management, they are
responsible to the top management for the functioning of their department. They
devote more time to organizational and directional functions. In small organization,
there is only one layer of middle level of management but in big enterprises, there
may be senior and junior middle level management. It is the implementation of the
strategic plan by means of analysis resource combination, planning for obstacles, and
general timetable. (Gabriel, 1995)
9.3 Operational Management Level also known as the lower management, it is a
much more detailed level of strategic and tactical plan. It consists of supervisors,
foreman, section officers, etc. Supervisory management refers to those executives
whose work has to be largely with personal oversight and direction of operative
employees. In other words, they are concerned with direction and controlling
function of management. Here, managers chosen to work the plan develop a specific
plan to execute the strategic plan. (Gabriel, 1995)
T-Mobile Managers at different levels and staffs has to take commitment, for
instance:
Company
Name
(T-Mobile)
EVERYTHING EVERYWHERE
Top Managers
For Instance, CEO of EVERYTHING EVERYWHERE must commit them to deliver
better quality, innovative products and better services to its customers.
Middle Managers
We are moving ahead to implement and expand our T-Mobile stores across China.
Line Managers
Sales Manager of a T-Mobile store must commit to his main responsibility by
ensuring best customer service to its customers.
Staffs
Member of the staff must commit to get continuous feedback from the management
and the customers to help the overall performance of the store.
There is an important link to each and every level, where each individual at every
level understand their role and assume fully their allocated duties. Supports must be
given where necessary and there must be a charismatic approach from top to floor
level. The objective is for everyone in the organisation to understand the strategy and
specifically how and what they are doing will contribute to overall delivery.
10. 0 Targets and timescale for T-Mobile
The setting and monitoring of target is an integral part of the strategy. Developing an
effective strategic plan is only "half the battle." Getting it implemented is the other,
and generally the tougher, half. However, an important part of strategy
implementation is monitoring. Monitoring the implementation of T-Mobile strategic
plan is important for a number of reasons.
First, it helps to assure that the efforts conform to the plan and secondly T-Mobile
got to make sure that the results achieved are align with the quantified objectives.
The process can be as simple as having managers and other appointed employees
provide periodic reports to the executive management. Monitoring also allows for
corrective action, that is, it helps in making the necessary changes along the way. To
"fine tune," not only the strategies, but also the planning process as well. Since
monitoring is part of a control process, it encourages improved performances of
employees to do a better job. Most importantly, monitoring provides the essential
link between the written plan and the day-to-day operation of the business.
If T-Mobile is choosing to expand in China, then it had to set targets, for instance:
Analysing the Chinese market and getting approval to start business within 6 months
Recruiting and Training of Staffs within 2 months time