STRAMA Shellyn E Gomez Revised PDF

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Running head: SMART COMMUNICATIONS, INC. A Strategic Management Paper on SMART Communications, Inc. Submitted to: Professor Leveric T. Ng, DBA In partial fulfillment of the course requirement in SPSTRAMA Submitted by: Shellyn E. Gomez May 22, 2017 SMART COMMUNICATIONS, INC. 2 Table of Contents 1 Com...

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Running head: SMART COMMUNICATIONS, INC.

A Strategic Management Paper on SMART Communications, Inc.

Submitted to: Professor Leveric T. Ng, DBA

In partial fulfillment of the course requirement in SPSTRAMA

Submitted by: Shellyn E. Gomez

May 22, 2017

SMART COMMUNICATIONS, INC.

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Table of Contents 1 Company Background ......................................................................................................11 1.1 Location ...................................................................................................................12 1.2 Leader’s Profile ........................................................................................................12 1.3 Organizational Structure ..........................................................................................12 1.4 Products....................................................................................................................13 1.4.1 Cellular Prepaid Business ................................................................................... 14 1.4.2 Cellular Postpaid Business .................................................................................. 15 1.4.3 Wireless Broadband Business ............................................................................. 16 1.4.4 Distribution Strategy ........................................................................................... 16 1.5 Technology ..............................................................................................................18 1.5.1 Supported Cellular Technologies ........................................................................ 18 1.5.2 World’s First Innovations ................................................................................... 19 1.5.3 Other Technologies and Innovations .................................................................. 20 2 Research Design and Methodology .................................................................................21 2.1 Internal Data (Primary Data) ...................................................................................21 2.2 External (Secondary Data) .......................................................................................21 2.3 Methodology ............................................................................................................22 3 Limitation of the Study .....................................................................................................22 4 Vision, Mission, and Values .............................................................................................23 4.1 Vision .......................................................................................................................23 4.2 Mission.....................................................................................................................23 4.3 Values ......................................................................................................................23 4.4 Evaluation of Vision and Mission............................................................................24 4.5 Proposed Vision .......................................................................................................26 4.6 Proposed Mission .....................................................................................................27 5 External Analysis .............................................................................................................28 5.1 Economic Forces ......................................................................................................28 5.1.1 Opportunity: Economic Performance, Outlook and Impact ............................... 28 5.1.2 Opportunity: Economic Impact of Telecommunications Industry ..................... 29 5.1.3 Threat: Peso Fluctuation ..................................................................................... 32 5.2 Socio-Cultural and Demographic Forces .................................................................33 5.2.1 Opportunity: Population Rate ............................................................................. 33 5.2.2 Opportunity: Overseas Filipino Workers ............................................................ 35 5.2.3 Opportunity: Mobile Platform Preference .......................................................... 36 5.2.4 Opportunity: Filipino International Tourists ....................................................... 37 5.3 Technological Forces ...............................................................................................38 5.3.1 Opportunity: Cellular 4G Market........................................................................ 38 5.3.2 Opportunity: Emerging Technologies................................................................. 40 5.3.3 Opportunity: Non-Cellular Wireless Broadband ................................................ 42 5.3.4 Threat: Over-The-Top Products .......................................................................... 42 5.3.5 Threat: Cybersecurity.......................................................................................... 43 5.4 Political, Legal, and Government Forces .................................................................44 5.4.1 Bureaucracy and New Regulations ..................................................................... 45 5.4.2 Threat: Terrorism ................................................................................................ 47 5.5 Environmental Forces ..............................................................................................48

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5.5.1 Threat: Natural Disasters .................................................................................... 48 5.6 Competitive Forces ..................................................................................................49 5.6.1 Threat: Potential New Entrants ........................................................................... 49 6 Industry and Competitive Analysis ..................................................................................50 6.1 Industry Study ..........................................................................................................50 6.1.1 Market Aspects ................................................................................................... 50 6.1.2 Market Size, Growth Rate, Stage in the Growth Cycle ...................................... 53 6.1.3 Market Share Analysis ........................................................................................ 55 6.1.4 Customer Profile ................................................................................................. 63 6.1.5 Factors Affecting Cost of Doing Business.......................................................... 64 6.2 Competitor Analysis ................................................................................................64 6.2.1 Globe Telecom .................................................................................................... 65 6.2.2 ABS-CBN Convergence, Inc. ............................................................................. 65 6.3 Porter’s Five Forces Analysis ..................................................................................66 6.3.1 Threats of New Entrants ..................................................................................... 66 6.3.2 Bargaining Powers of Buyers ............................................................................. 67 6.3.3 Bargaining Powers of Suppliers.......................................................................... 68 6.3.4 Threat of Substitution ......................................................................................... 69 6.3.5 Competitive Rivalry ............................................................................................ 69 6.3.6 Conclusion .......................................................................................................... 70 6.4 Competitive Profile Matrix ......................................................................................71 6.4.1 CSF #1: Network Coverage and Quality ............................................................ 71 6.4.2 CSF #2: Subscriber Base .................................................................................... 72 6.4.3 CSF #3: Customer Service .................................................................................. 73 6.4.4 CSF #4: Product Offering ................................................................................... 78 6.4.5 CSF #5: Price Competitiveness .......................................................................... 79 6.4.1 CSF #6: Innovation ............................................................................................. 81 6.4.2 CSF #7: Strategic Partnerships ........................................................................... 82 6.4.3 CSF #8: Brand Equity ......................................................................................... 84 6.4.4 CSF #9: Cybersecurity ........................................................................................ 86 6.4.5 CSF #10: Financial Position ............................................................................... 87 6.4.6 Conclusion .......................................................................................................... 88 7 External Evaluation Matrix (EFE) ..................................................................................89 7.1 External Opportunities .............................................................................................89 7.1.1 Opportunity 1: Cellular 4G Market..................................................................... 89 7.1.2 Opportunity 2: Mobile Platform Preference ....................................................... 90 7.1.3 Opportunity 3: Non-Cellular Wireless Broadband ............................................. 91 7.1.4 Opportunity 4: Population Rate .......................................................................... 91 7.1.5 Opportunity 5: OFW Population and Filipino International Tourists ................. 92 7.1.6 Opportunity 6: BPO and MSME Sectors ............................................................ 93 7.1.7 Opportunity 7: Emerging Technologies.............................................................. 94 7.2 External Threats .......................................................................................................94 7.2.1 Threat 1: Potential New Entrants ........................................................................ 94 7.2.2 Threat 2: Over-The-Top Products ....................................................................... 95 7.2.3 Threat 3: Cybersecurity....................................................................................... 96 7.2.4 Threat 4: Government Bureaucracy and Regulatory Requirements ................... 96

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7.2.5 Threat 5: Peso Fluctuation .................................................................................. 97 7.2.6 Threat 6: Terrorism ............................................................................................. 97 7.3 Conclusion ...............................................................................................................98 8 Internal Analysis ..............................................................................................................98 8.1 McKinsey’s 7S Model .............................................................................................98 8.1.1 Strategy ............................................................................................................... 98 8.1.2 Structure ............................................................................................................ 101 8.1.1 Style .................................................................................................................. 103 8.1.2 Systems ............................................................................................................. 105 8.1.3 Staff ................................................................................................................... 107 8.1.4 Skills ................................................................................................................. 109 8.1.5 Shared Values ................................................................................................... 110 8.2 Organizational Diagnosis .......................................................................................111 8.2.1 Management Audit............................................................................................ 111 8.2.2 Marketing Audit ................................................................................................ 113 8.2.3 Finance Audit .................................................................................................... 114 8.2.4 Operations Audit ............................................................................................... 126 8.2.5 Research and Development Audit .................................................................... 127 8.2.6 Management Information Systems Audit ......................................................... 127 8.2.7 Value Chain Analysis ....................................................................................... 129 8.2.8 Porter’s Generic Strategy .................................................................................. 131 9 Internal Factor Evaluation Matrix (IFE Matrix)...........................................................131 9.1 Internal Strengths ...................................................................................................132 9.1.1 Strength 1: Innovation....................................................................................... 132 9.1.2 Strength 2: Product and Service Offering ......................................................... 133 9.1.3 Strength 3: Price Competitiveness .................................................................... 133 9.1.4 Strength 4: Brand Equity .................................................................................. 134 9.1.5 Strength 5: Strategic Partnerships ..................................................................... 135 9.1.6 Strength 6: Corporate Social Responsibility Programs .................................... 136 9.2 Internal Weaknesses...............................................................................................137 9.2.1 Weakness 1: Network Coverage and Quality ................................................... 137 9.2.2 Weakness 2: Customer Service ......................................................................... 138 9.2.3 Weakness 3: Postpaid Business ........................................................................ 139 9.2.4 Weakness 4: Financial Position ........................................................................ 139 9.2.5 Weakness 5: Social Media Presence ................................................................. 140 9.3 Conclusion .............................................................................................................140 10 Strategy Formulation .....................................................................................................141 10.1 Threats-Opportunities-Weaknesses-Strengths Matrix ...........................................141 10.1.1 S-O Strategies ............................................................................................... 141 10.1.2 S-T Strategies ................................................................................................ 143 10.1.3 W-O Strategies .............................................................................................. 144 10.1.4 W-T Strategies .............................................................................................. 146 10.2 Strategic Position and Action Evaluation (Space) Matrix .....................................147 10.3 Boston Consulting Group (BCG) Matrix ...............................................................149 10.4 Internal – External (IE) Matrix ..............................................................................150 10.5 Grand Strategy Matrix ...........................................................................................151

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10.6 GE McKinsey.........................................................................................................152 10.7 Summary of Strategies ...........................................................................................154 10.8 Quantitative Strategic Planning Matrix (QSPM) ...................................................155 11 Objectives, Strategy Recommendations and Action Plans ............................................157 11.1 Strategic and Financial Objectives.........................................................................157 11.2 Recommended Business Strategies........................................................................157 11.2.1 Technological Development Strategy 1: Enhance network availability and improve customer experience through prioritizing expansion of LTE network and fortifying existing 2G and 3G technology. ................................................................... 157 11.2.2 Technological Development Strategy 2: Sustain first mover advantage and innovation by speeding up trials for VoLTE. ............................................................... 158 11.2.3 Technological Development Strategy 3: Set groundwork for 5G through trials, readiness tests, public campaigns, and partnership with smartphone manufacturers. .. 158 11.2.4 Technological Development: Streamline omni-channel touchpoints to improve customer experience...................................................................................................... 159 11.2.5 Technological Development Strategy 5: Integrate emerging technologies in products and services. ................................................................................................... 159 11.2.6 Product Development Strategy 1: Focus on value adding, flexible, and consumer-based data and digital products. ................................................................... 160 11.2.7 Product Development Strategy 2: Revitalizing the prepaid and postpaid products through initiatives focusing on simplification, availability, and reliability. .. 160 11.2.8 Product Development Strategy 3: Address the churn rate by protecting postpaid accounts through extensive aftersales support, appealing loyalty programs, and consolidating the Smart and Sun brands. ...................................................................... 161 12 Strategy Implementation ................................................................................................163 12.1 Strategy Map ..........................................................................................................163 12.2 Action Plans and Programs ....................................................................................164 12.2.1 Management Presentation and Mission/Vision Cascade .............................. 164 12.2.2 Detailed Business Strategies Action Plan ..................................................... 165 12.3 Financial Projections and Overall Evaluation of Strategies ..................................174 12.3.1 List of Assumptions ...................................................................................... 174 12.3.2 Project...