Business Strategies of Grameen Phone Limited - Assignment Point
Business Strategies of Grameen Phone Limited
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Business Strategies of Grameen Phone Limited

GrameenPhone (GP) is the largest cell-phone operator in Bangladesh. GP was given the cellular license in 28th November 1996 by the ministry of Posts and Telecommunications. Later in March 26th 1997, they offered their service in Dhaka city and gradually covered the entire country. GP, in collaboration with Grameen Bank, is aiming to place one phone in each village to contribute significantly to the economic uplift of those villages. GP’s basic strategy is coverage of both urban and rural areas. In contrast to the “island” strategy followed by some companies, which involves connecting isolated islands of urban coverage through transmission links, GP builds continuous coverage, cell after cell. While the intensity of coverage may vary from area to area depending on market conditions, the basic strategy of cell-to-cell coverage is applied throughout GP’s network. GP employ’s a large number of employees who are young, dedicated and energetic. GP knows that the talents and energy of its employees are critical to its operation and treats them accordingly.

The technology used by GP can only be described as state of the art. GP’s Global System for Mobile or GSM technology is the most widely accepted digital system in the world, currently used by over 300 million people in 150 countries. GSM brings the most advanced developments in cellular technology at a reasonable cost by spurring severe competition among manufacturers and driving down the cost of equipment. Thus consumers get the best for the least.

GP is best known for its service rather than its low tariff and value added services. GP believes in service, a service that leads to good business and good development. Telephony helps people work together, raising their productivity. This gain in productivity is development, which in turn enables them to afford a telephone service, generating a good business. Thus development and business go together.

As a result GP is delivering the digital revolution to the doorsteps of the poor and unconnected. By being able to connect to urban areas or even to foreign countries, a whole new world of opportunity is opening up for the villagers in Bangladesh. Grameen Bank borrowers who provide the services are uplifting themselves economically through a new means of income generation while at the same time providing valuable phone service to their fellow villagers. The telephone is a weapon against poverty.

GrameenPhone Limited, the number one and leading mobile phone company in the area of telecommunications in Bangladesh. Of four mobile operators, GP managed to grab 69% of the market share only by providing cost-effective & best service available in the market of mobile telecommunication. GP has made its expansion not only in the urban areas, but also it stretched its network in the rural areas for the economic empowerment of the rural people. GrameenPhone has made a special arrangement with Grameen Telecom, an affiliate of Grameen Bank in providing the cellular services in the rural country.

GP believes Excellency in its service towards its subscribers. It is growing and at the same time being competitive. To keep up this upward trend and leading position absolute dedication to understanding and fulfilling their customer needs with the appropriate mix of standard service, reliability, improved technology and skilled as well as dedicated manpower is necessary.

Mission, Objectives and Strategy

Vision

Grameenphone’s vision is simple: We’re here to help. Grameenphone’s renewed Vision recognizes that we exist to help our customers get the full benefit of communications services in their daily lives. The key to achieving this is that we work together and draw on our renewed Values and build them into guiding light behaviors in our workplace, wherever that may be… Make it easy. Keep promises. Be inspiring. Be respectful.

Four simple statements, but when embraced by GrameenPhone people around the world, they will help transform GrameenPhone into the global driving force for modern communications and customer satisfaction we need to become.

Value Statements:

Make it Easy

We’re practical. We don’t over complicate things. Everything we produce should be easy to understand and use. No waste. No jargon. Because we never forget we’re trying to make customers’ lives easier.

Keep Promises

Everything we set out to do should work, or if you don’t get it, we’re here to help. We’re about delivery, not over promising – actions not words.

Be inspiring

We are creative. We strive to bring energy into the things we do. Everything we produce should look good, modern and fresh. We are passionate about our business and customers.

Be respectful

We acknowledge and respect local cultures. We do not impose one formula worldwide. We want to be a part of local communities wherever we operate. We believe loyalty has to be earned.

Objectives of the company

GrameenPhone has a dual purpose to receive an economic return on its investments and to contribute to the economic development of Bangladesh where telecommunications can play a critical role. This is why GrameenPhone, in collaboration with Grameen Bank and Grameen Telecom, is aiming to place one phone in each village to contribute significantly to the economic benefit of the poor.

Strategies

Grameenphone’s strategy is coverage of both urban and rural areas. In contract to the “island” strategy followed by some companies, which involves connecting isolated islands of urban coverage through transmission links, GrameenPhone builds continuous coverage, cell after cell. While the intensity of coverage may vary from area to area depending on market conditions, the basic strategy of cell-to-cell coverage is applied throughout Grameenphone’s network.

The People

The people who are making it happen- the employees are young, dedicated and energetic. All of them are well educated at home or abroad, with both sexes (gender) and minority groups in Bangladesh being well represented. They know win their in hearts that GrameenPhone is more than phones. This sense of purpose gives them the dedication and the drive, production-in about eight years- the biggest coverage and subscriber-base in the country. GrameenPhone knows that the talents and energy of its employees are critical to its operation and treats them accordingly.

The Technology

Grameenphone’s Global System for Mobile or GSM technology is the most widely accepted digital system in the world, currently used by over 900 million people in 150 countries. GSM brings the most advanced development in cellular technology at a reasonable cost by spurring severe competition among manufactures and driving down the cost of equipment. Thus consumers get the best for the least.

The Service

Grameenphone’s believes in service, a service that leads to good business and good development. Telephony helps people work together, raising their productivity. This gain in productivity is development, which in turn enables them to afford a telephone service, generating a good business. Thus development and business go together.

The Result

By bringing electronic connectivity to rural Bangladesh GrameenPhone is bringing the digital revolution to the doorsteps of the poor and unconnected. By being able to connect to urban areas or even to foreign countries, a completely New World of opportunities are opening up for the villagers in Bangladesh. Grameen Bank borrowers who provide the services are uplifting themselves economically through a new means of income generation while at the same time providing valuable phone service to their fellow villagers. The telephone is a weapon against poverty. GrameenPhone Ltd. completed its eighth year of operation and crossed the three million-subscribers mark in early 2005.

It is a remarkable achievement indeed. The GP service was only launched on March 26, 1997. In July 2001, GrameenPhone was identified by EMC, the London-based mobile phone market research firm, as the fastest growing and single- largest mobile phone company in the South Asian region. The mobile phone sector of the country has also matured during this period. In fact, mobile phone users now outnumber the fixed-line telephone subscribers in the country.

The Village Phone Program is another innovative GP initiative launched in collaboration with Grameen Telecom, a shareholder of the company. Introduced in 1997, this unique service provides telecommunication services in remote rural areas where no such facilities existed before. Moreover, it also provides an income generating opportunity for the Phone operators, mostly rural poor women. The village Phone Program won the GSM in the Community Award given at the GSM World Congress held in Cannes, France in February 2000.

Strategic objectives

GrameenPhone wants to maintain the lead and to overtake the competitors in the country is what GrameenPhone has been dedicated to seeking.

It wants to provide all its employees with challenging and rewarding work, satisfying working conditions, and opportunities for personal development, advancement, and competitive compensation.

  • It wants to capture bigger market share.
  • It wants to achieve low operating costs.
  • It wants to offer broader and more attractive research for its products.
  • It wants to enhance the satisfaction of its consumers.

Financial objectives

GrameenPhone Ltd wants to earn growth in revenues and earnings.

It wants to earn wider profit margin.

It wants to realize higher return on invested capital.

Company Structure

The Shareholders

Telenor AS

TelenorAS (62%) is the state-owned Telecommunications Company in Norway, a country with one of the highest mobile phone densities in the world. Telenor has played a pioneering role in development of cellular communications, particularly, but not exclusively, GSM technology. In addition to Norway and Bangladesh, Telenor owns GSM companies in Portugal, Denmark, Greece, Austria, Hungary, Russia, Ukraine, and Montenegro, Thailand and in Malaysia. Telenor is using the expertise it has gained in its home and international markets and putting it to use in an emerging market such as Bangladesh. Telenor has many alliances in other countries, bringing experience and competence, both technological and business, to ventures such as GrameenPhone. Telenor has opened a regional Asia office in Singapore, an expansion that emphasizes its no Barriers motto.

Grameen Telecom

Grameen Telecom (38%) is a not-for-profit organization and a sister concern of Grameen Bank, the internationally recognized bank for the poor with an expansive rural network and extensive understanding of the economic needs of the rural population. Grameen Telecom, with the help of Grameen Bank, administers the Village Phone services to the villagers and trains the operators as well as handles all service-related issues. Grameen Bank covers 40,486 villages, or 60 percent of rural Bangladesh through its 1175 bank branches. Grameen Telecom’s objectives are to provide easy access to telephones in rural Bangladesh, introduce a new income-generating source for villagers, bring the Information Revolution to villages and prove that telecommunications can serve as a weapon against poverty.

GrameenPhone has a board of directors headed by a Chairman. There are five directors on behalf of the shareholders. Board of directors primarily looks after the activities of the managing director and this is the appointing authority of managing director. Boards of directors mainly conserve the interests of the shareholders. The managing director directly reports to the Board of directors. GP have 5 divisions and 3 departments each having a director. All the directors report directly to the managing director.  The GP organogram has gone through many changes over the years due to company re-structuring.

Market size and Coverage

The total market size of the mobile industry is 13.26 million approximately, as of June 2006. Of this 63.9% of the market share is occupied by GP, 18.67% by Aktel, 12.1% by Banglalink, 3.92% by CityCell and 1.47% by TeleTalk (as of October 2006).

Among the products offered by GP, the pre-paid mobile to mobile subscription, Smile, has the majority of subscribers amounting to more than 50% of GP subscriptions. The youth brand ‘djuice’ has climbed up to take the second position. Post paid subscriptions namely Explore 1 & 2, GPPP and Village Phone have around 500,000 subscribers among them.

GP is the first in the industry to provide bundle products whereby subscribers can get a predefined number of minutes free for a monthly fee. Anytime 500, post paid mobile to mobile subscription has some 5, 811 subscribers while GPPP, post paid subscription with PSTN connectivity has around 9,000 subscribers as of June 2006.

The popular Village Phone program has acquired more than 300,000 subscribers under its program as of 2006.

 

Coverage

This refers to the area throughout Bangladesh is covered by GP. At present 61 districts and 506 upazillas are covered by GP.

Analyses of Strategies

A. Business Level Strategy:

The Company wants to penetrate the market by offering reasonable prices. But the real catch lies in the fact that GP offers quality, innovation and added features (services) rather than going for a price based competition. To achieve superior quality in its products, it follows total quality management (TQM) that helps it in the following ways: Improved quality means that costs decrease because of less rework, fewer mistakes, fewer delays and better use of time and materials

As a result, productivity improves. Better quality leads to higher market share. This increases the company’s profitability and allows it to stay in business. To achieve superior quality, it implements the following things:

  • Build organizational commitment to quality.
  • Focus on the consumers (their needs).
  • Find ways to measure quality.
  • Set quality goals and create incentives (performance bonus).
  • Identify defects and trace them at source.

b. Human resource strategy:

The number of total staff is more than 1500. The company wants to increase training for its support staff to increase the ability to fix a problem on the first service call and to reduce the period of time consumers have to wait for technical help. GrameenPhone Ltd wants to recruit top talents in every department of the company.

c. Marketing strategy (4Ps):

Products Strategy: GrameenPhone has worked to provide its subscribers with continuously innovative products and services.

We have redefined the mobile landscape of Bangladesh with our innovative pre-paid and post-paid products and valued added services in the market.

We are continuously working to make our products easier to use and easier to understand.

This is the Company’s edge against the competitors – providing better products and services… and providing it FIRST!

Price strategy: The Company follows penetration-pricing policy. It offers the quality product at the cheapest price.

Promotional strategy: The Company follows mass promotional strategy. Promotional media include TV, daily newspapers, billboard, transportation advertising etc.

Distribution: The Company has developed its own distribution network consisting of more than 700 points. It has its own distribution vehicle and number of employees to deliver products. As a result, it has more control over distribution.

General recruitment policies:

GrameenPhone is committed to recruit suitably qualified and experienced Bangladesh citizens for vacant positions by way of:

  1. Implementing effective and appropriate recruiting, screening and selection procedures,
  2. Identifying and implementing standard selection procedures that are relevant to education, skills, training, experience and knowledge necessary for successful job performance,
  3. Conforming the hiring procedures to country’s law and in line with the Company’s requirements and financial situation.
  4. From manpower requisition/publishing advertisement step to placement step, a total of 29 working days will be required.
  5. Individuals between the age of 18-57 years can be hired as regular employee of GrameenPhone.
  6. Under no circumstances a regular or contract employee of any other organization is allowed to undertake regular, long-term or short-term contract employment in GrameenPhone.
  7. All appointments in GrameenPhone shall conform to its existing position with Grade and Salary level.
  8. In the spirit of internationalism, GrameenPhone may recruit senior employee from abroad in case suitable national employee could not be hired, upon approved by Board of Directors.
  9. The employment status can be changed from regular to contract or vice versa depending on the situation arising from Company need or a situation that arises on the ground of performance.
  10. The GrameenPhone internal applicant will be entitled to normal perdiem and travel expenses, according to the Company policy, for the interview held in other than his/her place of posting.
  11. HR and the concerned line manager will maintain absolute confidently of the implementation of any part of the recruitment process. No query will be responded or no information will be provided regarding the status of any recruitment until the entire process is complete.
  12. It is an important role on the part of HR to evaluate the effectiveness of recruitment methods, short-listing criteria, testing tools being used etc. an evaluation is useful to validate hiring steps and subsequently adopt better selection procedures for the Company.

 

Other Human Resources Related Activities

Identity Card

The GrameenPhone employees must have their respective Identity cards with them and keep them displayed while on duty so that it is easily visible and can easily be checked against the person wearing it. External visitors, who arrive a Company premises on official business, must always be collected and escorted temporary ID cards to and from reception.

ID card is not transferable to anybody. HR will issue ID card to all employees of GrameenPhone at the time of their joining. The employee will sign an undertaking that he/she will carry out all official rules in this regard.

Employee will fill up ID card information form to get the card.

During separation from the Company, an employee must return ID card to HR otherwise release order will not be issued.

If the ID card is lost, the employee has to report and make a GD entry to nearest Police Station within 24 hours. The employee will submit a copy of the GD to HR. In order to get a new ID card, an application, duly recommended by Director of the concerned Division/Department, will be submitted by HR.

Confidentiality of information

All employees must maintain secrecy in respect of all Company matters and polices. All employees are bound to retain silence regarding all business relation or other relations who could provide unauthorized information to outsiders, especially competitors. Technical or business related information should not be shared with outsiders and those will remain within the framework of sales or general information activities. A Secrecy and Loyalty Form has to be signed by all employees of GrameenPhone. The employees will declare that they will maintain secrecy in all matters that come to his/her knowledge during employment in the Company and shall not divulge matters relating to the operation of GrameenPhone in any respect. Non-compliance of any of the provisions contained in the declaration form would lead, at the discretion of GrameenPhone, to disciplinary actions according to Company Policy.

Employee Information

Outside organizations or individuals may request GrameenPhone for ex-employee or present employee information. The sharing of any of the information with them exclusively depends at the discretion of GrameenPhone. Employees may ask for Experience certificate or salary information certificate from GrameenPhone for any valid reason. In such case, GrameenPhone may issue such certificate to the employees. HR, in consultation with line manager, may issue such certificate.

Promotion policy

Definition

Promotion will mean a move to a higher grade with a larger scope of job.

Situation for promotion

– Creation of new position, due to organizational re-structuring, or due to significant increase in the scope of a particular job.

– Vacancy at a higher grade position.

– Creation of new position.

Respective functions will initiate a proposal and submit it to HR justifying creation of the new position. The proposals will be forwarded to HR on a quarterly basis, if any.

A cross-functional committee will review the proposals for approving the new positions upto Manager Level. In case of positions above Manager Level, the proposal will sent to MT for approval

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