NORTH SOUTH UNIVERSITY

Strategic Business Analysis

of Grameenphone Ltd.

Submitted To
Professor Dr. Mahmud Akhter Shareef

Submitted By

Name ID

Md. Hasan Shahriar 1725063690

Md. Ariful Islam 1725287090

Sazia Afrin 1725053090

Farjana Khan 1735273090

Saiduzzaman Chowdhury

EMB 690 Section: 1 30-04-2019

 LETTER OF TRANSMITTAL

Date: 30th April, 2019

Professor Dr. Mahmud A. Shareef

School of Business & Economics
North South University

Subject: Submission of Term paper on “Strategic Business Analysis of Grameenphone Ltd.”

Dear Sir

It is a great pleasure and privilege to present the term paper titled “Strategic Business Analysis
of Grameenphone Ltd.”, which was assigned to us as a partial requirement for the completion
of EMB 690 course.
It is our great pleasure to work on Grameenphone the leading telecommunications operator
of Bangladesh and gain an in-depth knowledge on the company. We have gone through
internet, articles and website of Grameenphone and tried with the best of our capacity to
make this report as much informative as possible as per your instruction.
We are grateful to you for your guidance and kind cooperation at every step of our endeavor
on this report. We shall remain deeply grateful if you kindly take some pain to go through the
report and evaluate our performance.
We hope you find this report satisfactory.

Yours’ sincerely,

Md. Hasan Shahriar

Md. Ariful Islam
Sazia Afrin
Farjana Khan
Saiduzzaman Chowdhury

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 ACKNOWLEDGEMENTS

We would like to take this opportunity to thank and acknowledge all the people who have

helped us directly and indirectly in the making of this term paper by being a part of our

research study.

We would like to thank our group mates for being the best classmates and the honor to study

with some of the most brilliant minds we’ve ever came across.

Finally, we would like to thank our Supervisor Prof. Dr. Mahmud A. Shareef for pointing us in

the right direction and always being there to share a helping hand whenever we were stuck

with the term paper.

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TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................................... 5
COMPANY BACKGROUND ....................................................................................................................... 6
VISION, MISSION AND VALUES ............................................................................................................... 7
SWOT ANALYSIS OF GRAMEENPHONE ................................................................................................... 8
PORTER'S FIVE FORCES IN RESPECT OF GRAMEENPHONE LTD: ........................................................... 11
GENERIC COMPETITIVE STRATEGIES OF GRAMEENPHONE: ................................................................. 15
TAILORING STRATEGY OF GRAMEENPHONE TO SPECIFIC INDUSTRY: .................................................. 17
RECOMMENDATION ............................................................................................................................. 22
CONCLUSION ......................................................................................................................................... 23
REFERENCE ............................................................................................................................................ 24

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INTRODUCTION

Grameenphone the leading multinational company in telecommunication service sectors

occupying around 50% of the market share and having more than 23 million subscriber bases.

The strongest side of Grameenphone IS its customer's service and its relationship with their

subscriber. Almost each part of the country connected, and it turned out to be a big hit. The

big profit maximizing company also captured most of the leading market share and generating

revenues from its several divisions. The biggest strength of Grameenphone is its widest

network coverage. Grameenphone has a dual purpose – to receive an economic return on its

investments and to contribute for the economic development of Bangladesh where

telecommunication can play a vital role. it had a great desire to reach one phone in each

village to contribute significant better life throughout the villages. Their dream became true

and they have started operating in the rural areas. The company has been a pioneer in

introducing new products and services to the market. Grameenphone's basic strategy is to

coverage both the 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, Grameenphone builds continuous coverage and may vary from area to

area depending on market conditions, the basic strategy of cell - to - cell coverage is applied

throughout Grameenphone network. Grameenphone has done re-branding by introducing

Telenor Logo in 2006, but keeping the name "Grameenphone" intact. The general people of

Bangladesh viewed Grameenphone as a nationalistic company, as its previous logo, theme all

used to matches the country's nationalistic profile. As they did so, they got positive and

negative response from its different group of stakeholders.

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COMPANY BACKGROUND

Grameenphone was the first Telenor venture in the Asian telecom market. Today,

Grameenphone is the largest mobile provider in Bangladesh, serving more than 28 million

subscribers which is an increase of 53 per cent in the subscriber base in 2007. It has boosted

its network capacity and extended coverage to new and often remote areas, connecting

millions of previously unconnected people. Grameenphone holds 46.2 per cent of Telenor.

Grameenphone serves both rural and urban customers across Bangladesh, where mobile

telephony is a major driver of socioeconomic development. The company envisions to provide

the power of digital communication, enabling everyone to improve their lives, build societies

and secure a better future for all. The company also has always been a pioneer in introducing

new products and services in the local telecom market.

Grameenphone Ltd. built its network on a nationwide basis. As of December 2017, the

company’s network covered more than 99% of Bangladesh’s population with 2G services and

more than 92% population with high speed 3G network. The company was awarded with

license of 4G/LTE cellular mobile phone services on 19 February 2018. Grameenphone Ltd.

has so far invested more than BDT 313 billion to build the network infrastructure. It is one of

the largest taxpayers in the country, having contributed more than BDT 585 billion in direct

and indirect taxes to the Government Exchequer since inception.

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VISION, MISSION AND VALUES

Vision | Empower Societies

We provide the power of digital communication, enabling everyone to improve their lives,

build societies and secure a better future for all.

Mission | We are here to help our customers

We exist to help our customers get the full benefit of being connected. Our success is

measured by how passionately they promote us.

Values

Be Inspiring We are creative. We bring energy and imagination to our work.

Everything we produce should look fresh and modern.

Everything we produce should be easy to understand and use. We should

Make It Easy
always remember that we try to make customers’ lives easier.
We acknowledge and respect local cultures. We want to be a part of local
Be Respectful communities wherever we operate. We want to help customers with
their specific needs in a way that suits the way of their life best.
Everything we do should work perfectly. If it doesn’t, we’re there to put
Keep Promises things right. We’re about delivery, not over-promising. We’re about
actions, not words.

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 SWOT ANALYSIS OF GRAMEENPHONE

Strength
Opportunity
Good Ownership Structure
Continuously growing demand
Network Availability for telecom service
Market Leader Economic Growth of
Brand Recognition Bangladesh
Strong financial back up 1.New international access
Skilled manpower 2.Increasing internet usage
High Ethical Standard Increasing external
communication with foreign
Distribution Channel
countries
Digital Footprint
Declining Prices for Handsets
.

Weakness
Threats
Relatively higher call rate than
competitors Strong aggressive competitors
1.Relatively higher internet 1.Switching tendency of
charge customers
2.Complex pricing structure More Rigid Government
Regulations
3.Problem Contained Offers

Figure 1.1: SWOT analysis of HSBC Bank Limited.

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Strength

 Good Ownership Structure

 Network Availability

 Market Leader

 Brand Recognition

 Strong financial back up

 Skilled manpower

 High Ethical Standard

 Distribution Channel

 Digital Footprint

Weakness

 Relatively higher call rate than competitors

 Relatively higher internet charge

 Complex pricing structure

 Problem Contained Offers

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Opportunity

 Continuously growing demand for telecom service

 Economic Growth of Bangladesh

 New international access

 Increasing internet usage

 Increasing external communication with foreign countries

Threats

 Strong aggressive competitors

 Switching tendency of customers

 More Rigid Government Regulations

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PORTER'S FIVE FORCES IN RESPECT OF GRAMEENPHONE LTD:

Porter 5 force framework is a tool for analysis competition of a business and therefore the
attractiveness of an industry in terms of its profitability. In recent time Grameenphone Ltd. is
the largest mobile telecommunication operator in Bangladesh. We here discuss weather this
company is feasible or not based on porter’s 5 force model in respect to Bangladesh.

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Potential to Entry:

This factor considers how easy it is to enter the industry for a new firm. If it is easy to enter
than prices and profit will be low.

In respect to Bangladesh it is not easy for new entrants to enter in telecommunication

business.so Grameenphone profit will be high. It is feasible for Grameenphone.

 Barriers to Entry: There are some potential factors which can be act as barrier.
 Brand Loyalty: Grameenphone brand loyalty might be a problem for new entrants.
As the call rate, offer and services of all the telecommunication are not much
different. Grameenphone customers are very loyal. So, brand loyalty might be a
major problem for new entrants.

 Absolute Cost Advantage: Refers the lower cost advantage for Grameenphone.
Grameenphone has more experience which results superior services and process.
More control over managing inputs required for production and access to cheaper
for Grameenphone as represent lower risk than new entrants.

 Economies of Scale: Grameenphone get advantage in economics of scale but new

entrants’ company cannot get this. Because Grameenphone has a high volume of
raw materials collection and has a large customer support.

 Customer Switching Cost: Generally low cost occurs when customer switch on
Grameenphone to another. There might be a contract with Grameenphone and
any big company than company and their employees get discount by deposited
security money. But if suddenly company wants to switch the company than their
might switching cost as they do not get discount.

 Government Regulation: There are many government regulations in Bangladesh

for opening a new telecommunication business like license permission and so on.
So, it is quite tough for new entrants.

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Level of Rivalry in an Industry:

This factor refers the current level of competition with competitor in a specific segment.

Higher competition in the existing company leads to lower profit.

Although in this industry’s competitors are few, as they are not well established as

Grameenphone. So Grameenphone profit will be high. It is feasible.

There are some factors upon which the level of competition of the industry depend.

 Industry Competitive Structure: Grameenphone is a monopoly business.

Grameenphone has right now more than 58 million subscribers and 54% market share

in Bangladesh.

 Industry Growth: Telecommunication industry growth is rising gradually. So, it is good

for Grameenphone.

 Fixed Cost: Fixed cost is relatively higher in this industry. So, rivalry is lower and

difficult for new entrants to entry.

Power of Buyers:

If there are only a few buyers, then they can bargain down prices.

In Grameenphone, their potential buyers are all category of people who are living in

Bangladesh like upper class, middle class people, some lower income people, corporate job

holder, government job holder people, businessman, housewife, students and so on. It seems

that there’s quite high member of buyer who are using Grameenphone. Buyers cannot control

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the call rate or policies. So, it seems that buyers are not more powerful and business is feasible

for Grameenphone.

Power of Suppliers:

If there are only a limited number of suppliers of important items, so supply costs rise.

Grameenphone has a strong supply chain management. The main potential suppliers are

Chinese telecom equipment manufacturer who provides voice and data services. Supplier is

limited and they cannot force to price rising. Grameenphone fixed the price and suppliers can

only supplier the products. So, it is also feasible for Grameenphone.

Substitute:

More available substitute tends to drive down prices and profits. Grameenphone substitute
are TNT phone, email, PABX and so on. There is not much substitute business so for
Grameenphone it is feasible.

Complementors:

When complementors are important and their number is increasing than demand and profit
in the industry are boosted.

Bangladesh is becoming digitalized country in day by day and Bangladeshi people are
attracting towards on technology like internet, smartphone than before. This digitalization
tendency is boosting up of this business of telecom company service pro Grameenphone.

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GENERIC COMPETITIVE STRATEGIES OF GRAMEENPHONE:

GP is providing their services to a broad cross section of buyers with their differentiated

services. So, GP is following Broad Differentiation strategy.

Objectives:

Incorporating differentiating features that causes buyers to prefer firm’s product or services

over brands of rivals. GP has differentiated its services using better technology and high

skilled employees

Benefits that GP is getting from differentiation:

Differentiated services make GP more appealing than rivals and attracting more customers

to their brand. It helps to increase sale and market share. For providing premium

differentiated product GP is following premium pricing strategy which helps GP to increase

profitability. Consistent quality and prompt customer services gave GP the advantage to

have a loyal customer base. They also introduced star program by offering various facilities

to customers who are staying with GP for a long period of time.

To achieve differentiation a company needs to take various types of approaches. We will be

discussing approaches GP used to achieve their goal:

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Approach 1: Incorporate features/attributes to enhance buyer satisfaction:

GP is providing services like the facilities to pay electricity bill through their sim. They are

providing emergency medical service through real time conversation with doctors, GP is

providing free insurance service for their users. Besides GP is also helping customers in getting

different services like Uber, Pathao, bkash and other app-based services.

Approach 2: Compete based on superior capabilities to serve:

Instead of competing over price, GP compete based on superior capabilities. GP has the best

distribution, high skilled employees and capabilities to serve better than rivals with their

better-quality services.

Approach 3: Incorporating features that lower buyers’ overall cost:

GP is providing customized packages through which customer’s overall cost goes down. In the

same time GP is providing discount in different places through their star program which

decrease the overall cost of using GP sim.

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TAILORING STRATEGY OF GRAMEENPHONE TO SPECIFIC INDUSTRY:

To gain long term sustainable competitive advantage, a company needs to analysis the

industry they are operating, because different industry represents different opportunities and

treats. A company needs to design their business model based on the proper industry analysis

to get the opportunities which are available in the industry and to overcome the threats that

they may have to face.

Mature Industry:

Grameen phone is operating in mature industry. A mature industry is an industry where

almost all potential buyers are the users of the service of the industry. Telecommunication

industry in Bangladesh has reached to all most all potential customers of the country. They

become enable to reach even the remotest and poorest segments of population. The number

of mobile SIMs in our country is more than the number of expected users that because of

using more than one sim by an individual. This put a huge competition to GP to maintain their

market share and increase present sale. So, we can say GP is operating in mature industry.

Now we will analysis the characteristics of mature industry and will see whether GP is

operating in this industry based on the characteristics.

 Rapid growth to slower growth: One character of mature industry is moving to rapid

growth to slower growth, GP is now facing slower growth than before which

represents GP is operating in a mature industry.

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  Head to head competition for market share: One of the vital characteristics of mature

industry is slowing growth in buyer demand for the product which generate more

head to head competition for market share. Because of having another 3 big

competitors with all most similar types of products and services GP is facing slower

growth in demand for their products. If we see the trend we can see, although still it

is the market leader its comparative market share is declining over years.

 Competition emphasis on cost and service: Another important characteristic of

mature industry is competition often comes from greater emphasis on cost and

service. If we observe GP’s pricing strategy GP used to flow premium pricing strategy,

but due to intense price competition from competitor like Airtel and Robi, GP is now

focusing cost reduction through offering their customized packages in my GP app. If

we analyze the current industry trend the main area of competition is in pricing

because all companies are providing all most similar service.

Analyzing above characteristics of GP it can say that they are operating in maturing industry.

Now we will be discussing the strategies GP is flowing to compete with competitors in mature

industry.

Strategy 1 - Defending market share to maximize market share: GP is now defending

market share through increasing product variety and product line. For example, GP is now

extending their services with collaboration with app-based business Uber, Pathau, daraz.com

etc.GP is also start providing financial services like payment of electricity bill of Desco. With

collaboration with bkash, Ukash, Rocket etc. GP is extending their area of services and

reducing pressure on competing on voice call and internet services. At the same time GP is

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reducing price to target more price sensitive segments. Implementing those strategies GP is

protecting market share and maximizing profit.

Strategy 2 - Emphasis on value chain: GP is now restructuring its value chain activities.

Previously the only focus was on voice call and internet service. Now GP is focusing variety of

services along with this two-conventional product of telecommunication industry.

Strategy 3 - Enhancing product features: Instead of just relying on price competition

GP is focusing on enhancing its product features to win in the competition with its

competitors. For example, GP is developing customized voice call, internet, sms packages

where customer can buy what any amount with any validity date they want.

Strategy 4 - Lower price due to competition: Initially GP used to charge premium price

with their premium best quality. Due to intense competition in the market and for the sake

of protecting their market share they are facing pressure to decrease price. To meet the

market demand GP is introducing lower price packages.

Strategy 5 - Product development: To win in the race of competition GP is now

developing a wide variety of services. For example, they are developing tonic health and life

insurance packages which is completely new in this industry.

By implementing those strategy GP is protecting its market leader status and maximizing its

profit better than its competitors.

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Industry Leader:

When any company is controlling the market then then that specific company or a few

numbers of company are known as industry leader. GP currently has 54% share of the total

market. Which certainly puts GP in industry leader position.

Now we will analysis the characteristics of industry leader and will see whether GP co relates

with it -

Competitive position of industry leader: The competitive position of industry leader

normally stronger than average to powerful. Having 54% of the share it is certainly in a

stronger position than any other telco organization in Bangladesh.

Industry leaders are well known for: Leaders are well known and characterized by

either low-cost or differentiation or both. GP is following differentiation strategy. The have

the largest and strongest network in Bangladesh. Also, they have a massive number of

qualified engineers. All of this adds up to prove the best telco experience for the consumer.

This differentiation put them in industry leader position.

Main Strategic Concern for leaders: The main strategic concern for leaders is to

strengthen defend its leadership to become dominant leader as opposed to just a leader. And

GP is constantly doing that. They are constantly bringing in the new technology.

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Strategies to be followed by industry leaders and co relation with GPs strategy is given below

Stay-on-the-offensive strategy: Become always a first mover, create a change and

new era. GP is doing just that with introduction of 4G also they will be the 1 st operator in

Bangladesh to introduce VoLTE.

Fortify and defend strategy: Make it harder for challengers to gain around. GP is doing

exactly that by making their infrastructure future proof. They have the largest spectrum , they

introduced cloud infra and deployed DC DR at different earthquake region.

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RECOMMENDATION

Though Grameenphone has the large portion of marketing share with a loyal consumer base

still they have some are of improvements. Those are discussing below:

a) Focus on Market Intelligence: Competitor may come any time and take market

share. To sustain in the price competitive market GP needs to focus on efficient

market intelligence to analyze the market on time and watch competitors’ activity

along with cater changing consumer demand.

b) Investing Resource in Developing Network: GP needs to improve their network. Now

a day their consumers are facing problem while making call. Networks remain busy

in peak hours. More over call drop rate has increased. So, these things need to be

fixed.

c) Focus on Customer Relationship: Customers often complain that the behavior of call

center employee is not satisfactory. Sometimes they are incapable of giving the

solution. So, GP should provide proper training to call center employee to enhance

the customer relationship.

d) Increase the Number of Customer Care Centre: Previously GP has customer care

center to the prime location of every city. But now the number has decreased.

Currently they ratio is 37% less than the base ratio. (Comparing 2005 vs 2018). So,

the numbers need to increase.

e) Retaining Talent: It has been observed that many top managements of GP is

switching their job. GP should take necessary steps to retain the top talent of the

organization.

They need to look in to the HR issue to reduce employee turnover ratio.

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CONCLUSION

GP followed most of the international business strategies properly in Bangladesh which

resulted a high degree of success and profitability. At first, they chose the right entry mode

and found a perfect partner. Though GP is facing a tough competition, because of its strategy

and implication of market understanding, still enjoying a market share of more than forty

percent and keeping a high profit margin. If they would fix the problem they are facing

currently like high employee turnover rate, poor network performance then they would

capture more market share which will increase their but also help them doing sustainable

business in Bangladesh.

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REFERENCE

The date collected in the report has taken mostly from the secondary sources. Among them

most usable source for data collection has given below:

https://www.grameenphone.com/sites/default/files/investor_relations/annual_report/Cor

porate%20Responsibility%20at%20Grameenphone_1.pdf

https://www.grameenphone.com/sites/default/files/IR/Sustainability_Report_Final_22-03-

15_compressed.pdf

https://www.grameenphone.com/sites/default/files/investor_relations/annual_report/GP_

Annual_Report_2016_Optimized.pdf

http://www.btrc.gov.bd/content/mobile-phone-subscribers-bangladesh-july-2018

https://en.wikipedia.org/wiki/Grameenphone

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