Sunteți pe pagina 1din 3

1. What must Bharti do well to succeed in the Indian mobile phone market?

In order to succeed in the India mobile phone market Bharti Airtel should
concentrate on growth model by continual implementation of continuous improvement
and innovation. By 2003, the Indian market has grown to be competitive. The fall in
ARPU (average monthly revenue per customer unit) generates a need to focus on
increasing ARPU (avg. monthly revenue per customer unit) by sustaining value added
services. Bharti has a substantially large network; their original network was set up by
Ericsson. By 2003, Bharti was present in all the major industrial areas representing 91%
of all mobile users in India. Bharti must manage to sustain their positon in the
economy by being competitive and by using their large network. To further this, Bharti
must study the potential market and obtain mobile and fixed line licenses in all of
Indias mobile operating areas. They also would do well by launching more national
and international long distance services. In any business, streamlining can always help
the organization succeed. For example, with regards to Bharti, they can have an
effective and more efficient process of planning, financing, purchasing, installing
departments, new products, billing plans, and services in order to reduce lead time to
the market or consumer. With their core competencies centered on network
operations, a successful venture may be expanding options through all of the
phone/device offering companies like IPhone, Samsung and others. Finally, a step in the
right direction would be to work towards outsourcing IT and communication technology
competent vendors which will allow them to focus on network communications.
What are Bharti's core competencies?
Bharti Airtels core competencies are centered with Network Operations. They drive
their business vision through their competency in their ability to innovate then push
their innovative product and service through Sales & Marketing.
2. Do you think Bharti should enter the outsourcing agreements outlined by
Gupta?
Yes, I believe the Bharti Airtels should work towards an effective and efficient
outsourcing agreement.
What do you see as advantages and disadvantages of such agreements?
Advantages of Outsourcing:

A substantial increase in market leverage and bargaining power for Bharti,


due to high competition between service providers. (Four are proposed). This may
drive down the cost of the products and services in the long run.

Avoid the cost of acquiring excess capacity. This cost Bharti as much as $400
million. Outsourcing would regain as much as 40% capacity which is a current
constraint for the organization.

Decreasing or limiting uncertainties in capital expenditures by not investing


to acquire or upgrade fixed assets, such as buildings and equipment.

Transferring equipment investment, operations, and accounting risk to the


vendors.

Lower Human resources responsibilities as well as costs by transferring these


responsibilities to vendor companies.

Disadvantages of Outsourcing:

The HR issue that will come from existing employees to make the move.

Outsourcing core business would put more of dependency on vendors, and


trusting the support of the venders. There could be some communication issues
involved with outsourcing.

Will limit Bharti to use innovative new applications.

Transfer of proprietary network assets designed, produced, and serviced by


Bharti.
How do the different outsourcing agreements work towards building these
core competencies?
Ultimately outsourcing will help in efficient usage of its resources and expertise
towards its core areas of product innovation, value-added services, and pricing as well
as keeping the IT applications in-house. Another advantage would be that, Bharti does
not have to keep the investment in maintaining excess capacity. Bharti can free up
more capacity and does not have to keep investing in trying to maintain current or
excess capacity of as much as 40%. The company would receive favorable cash flow
and more profit to the bottom line through cost reduction from outsourcing. For
example, they would transfer equipment investment risk to vendors. This will eliminate
the cash flow of maintenance as well as other benefits from eliminating accounting
depreciation of equipment. Bharti may also avoid the problem of recruiting and
increasing their work force as the business grows. One of the largest benefits would be
that the human resource issue would be resolved. Bhartis workforces can increase
opportunities to acquire knowledge from industry leaders by transferring to the
outsourcing vendors. By using its vendors technology, resource, and expertise,
innovation would be easier and products would be developed faster, resulting in the
reduction of lead-times of the products or/and services to the consumer. Finally, there
would be risk diversification by involving three vendors instead of one. This would
spread out the possibilities of building upon core competencies.
3. If you were Bharti, what major concerns would you have about entering an
outsourcing agreement with IBM? With Ericsson, Nokia, or Siemens?
Bhartis major concern about entering into an outsourcing agreement would be
under the umbrella of general vendor management. The general logistics and
communications are difficult with managing one large vender like IBM, and could get
more complicated with Ericsson, Nokia, or Siemens. IBM, Ericsson, Nokia, or Siemens
are large organizations that have a lot of resources; Bharti could be at risk of exposing
proprietary business processes that could limit future growth. If the larger
organizations cross the barrier of entry into the proprietary technology, Bharti could be
at risk of losing their market footprint. Other proprietary infringement may occur such
as copyright, patents and IP protection. Another concern would be the issues up front
with asset ownership, mainly regarding allocation of gray area resources like labor,
support, maintenance, and workforce assets that are difficult to distinguish and
manage; this could lead to resource absorption by the vendors leading to unrest of the
workforce. Finally, it is all about the money The accounting logistics are difficult to
manage; different payment terms and accounting parameters generally take
substantial amount of legal work, monetary recourses, and time to stablish, resulting in
lost profits.
4. How would you structure the agreements to address your concerns and
capture any advantages you have identified?
Agreement Structure:

1. A revenue sharing agreement with the vendor would solidify security with the
vendor in an uncertain market. Perhaps an agreement could be made to decrease a
percentage of shared revenues as the overall revenues increase.
2. Recruitment and staffing of the new employees will need to be taken care of by the
vendor.
3. There needs to be a measuring mechanism. Measurement of the quality by
measuring customer satisfaction is essential as a service oriented organization.
4. IBM must co-operate with other vendors to support the network operations of
Bharti.
5. An incentive program needs to be structured with rewards and penalties built into
the contract.
6. With regards to outsourcing to a vendor, smooth hand over of the network
management and operations should be under constant monitoring by the governing
coalition.
What governance mechanisms would you design for the agreements?
A governing coalition needs to be created to ensure the decision making stays with
Bharti. However, allowing IBM to control the fundamental innovation, and keep
decision making with the governing coalition will reduce new IT services time to
market. The governing coalition will design, and uphold the agreements. They will also
need to uphold governing by monitoring, resolve conflicts.

S-ar putea să vă placă și