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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:
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.
Disadvantages of Outsourcing:
The HR issue that will come from existing employees to make the move.
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.