Case Study on Grameen Phone, Bangladesh.

School of Management, HUST.

华中科技大学管理学院
 Members’ List of Group 9

• MOHAMMAD RAIHANUL HASAN I201722149

• MD ABDUL KAIUM I201722068
• HAYDER MOHAMMED I201722147
• LORENA MENDOZA I201721048
• ALEJANDRA VAVERDE I201721060
• SABA HAFEEZ I201721168

School of Management, HUST.

华中科技大学管理学院
 INTRODUCTION

Grameenphone Ltd. widely known as GP is currently the leading and

largest telecommunications service provider in Bangladesh and is a
part of Telenor Group which has presence in 13 markets across Europe
and Asia with more than 60 million subscribers (as of June 2016). It is a
joint venture enterprise between Telenor (55.8%), the largest
telecommunications service provider in Norway with mobile phone
operations in 12 other countries, and Grameen Telecom Corporation
(34.2%), a non-profit organization of Bangladesh. The other 10%
shares belong to general retail and institutional investors.
 MILESTONES
By connecting 56.300 million subscribers, 15.7 million Internet
subscribers and more than 43 thousand shareholders as of July 2016,
giving people access to the internet and digital services,
Grameenphone is enabling people to drive business, improve their lives
and contribute to building a better future for society. Grameen Phone
has nationwide 345,263 point of sales as a result it can easily serve the
customer service to their optimal customers. Grameenphone offers
innovative services in line with socio-economic conditions of
Bangladesh. In 2006, Grameenphone introduced Healthline, a 24 h
medical call centre manned by licensed physicians, Mobicash, for
electronic purchase of train and lottery tickets and BillPay, which allows
utility bill payments to be made by mobile
 PEST ANALYSIS
1.Political
Tax Policies: As a SEC listed company GP’s corporate tax rate is35%.
Another competitor’s tax rate is 45%. So they get extra benefit from the
market.
Political Stability: in our country all of the business has strong political
stability so GP is always in political stability.
2.Economical
Economic Growth: GP contribute their share in SEC. there economic
growth is rather than the other competitor.
Unemployment policy: It is a large company and it has about 30000
employees around the country.
Taxation:
As a SEC listed company GP’s corporate tax rate is 35%. Another
competitor’s tax rate is 45%. So they get extra benefit from the market.
3.Social
Income distribution: they are contributing their income throw dividend
to their share holders. Existing they are connect withseveral social
responsibilities.
Lifestyle changes: Mobile user can change their lifecycle stricture.
Anyone can get everything through using mobile and internet.
4.Technological
Govt. research spending: They are contributing with the Govt.
research spending every time.
Industry focus on technological effort: Their technological effort is
higher than other competitors.
Internet: EDGE system is first open by GP. They are the marketleader
of mobile connection modem also.
 PORTER’S FIVE FORCES ANALYSIS

1.Threat of New Entrants:

Existing companies have created significant brand positioning and
economies of scale in network coverage- which also act as entry
barrier. Government rules and regulations- like imposition of huge tax
on SIM card, strong tariff control by the authority, can also create
difficulties to entrants; in addition the price battle between the
competitors brought the tariffs to its lowest in this region. But the major
barrier to entry in Bangladesh mobile telecom market is to obtain a
radio spectrum license from BTRC. So potential direct entry to the
industry is relatively restricted at the moment, due to control over
licenses.
2.Industry Substitutes:
Mobile telecommunications is a high-tech industry and the substitutes
that would replace the products or services of today are strongly related
to the factor of innovation. In case of Bangladesh mobile telecom
industry, substitutes exist in the form of government fixed-land lines and
some upcoming PSTN operators. Some additional substitutes include
VoIP service providers (VSP), Skype, Google Talk, wireless Internet
providers such as WiMax based companies etc. However, there is no
strong competitive substitute for mobile telecom industry as the existing
alternatives are either nearly obsolete or in embryonic stage and thus
poses very little threat to the industry. So the threat from substitutes is
weak in Bangladesh.
3.Bargaining power of Buyers:
There are six mobile telecom operators in Bangladesh and they offer
almost homogenous services which have low switching costs between
operators and thus has provided buyers with extremely high bargaining
power. The bargaining power of buyers in this industry is very high, with
the exception of remote-area customers who have no alternative
network available in their vicinity.
4.Bargaining power of Suppliers:
The companies have the opportunity to acquire necessary equipments
from different international chains across the globe. Ericsson and Nokia
Siemens in the mobile telecom machinery industry is that type of
suppliers who enjoy strong power in the industry. On the other hand
there are many potential suppliers and vendors in telecom industry e.g.
Cisco, Siemens Enterprise Communications, Alcatel-Lucent, Huawei
and Motorola, Nortel, Oracle, Nokia, Samsung, Juniper, Converse, HP,
Sun etc play their bargaining role. Recently, Huawei Technology played
an important role in modernizing GP‘s network infrastructure on the
new 3G platform. Therefore, the bargaining power of suppliers in the
industry is moderate .
5.Rivalry among competitors:
There is an intense battle in price ground between the six mobile
operators. Grameenphone is leading the industry and standing in an
advantageous position than others. Each company is trying to increase
the market share by lowering call rate, superior network coverage and
better Value Added Services. The competition has driven the industry's
average revenue per share to a very low level. Considering the
intensity of the competition - the rivalry among existing competitors is
very high.
MARKETING MIX
PRODUCTS
PRICES
3G INTERNET
PACKAGES
PLACE
 PROMOTIONS
Grameenphone convey its product and convince the client to purchase
and use GP is taking a huge number of promotional activities to
compete with other mobile companies.
1.Advertisement
Grameenphone in objectively try to convince people by advertisement.
Through TV we have seen different advertisements of Grameenphone.
Different radio stations are operating in Bangladesh. These stations
use to earn profit by advertisement in the middle of their shows. So,
Grameenphone Provides the advertisement through the radio. They are
use Social-networking site like facebook, yahoo, twitter etc for their
advertisement. They also uses this source and gives their
advertisement by the newspaper. In Bangladesh, GP use billboard to
advertise their new product.
2. Personal Selling
In Bangladesh GP authorized dealers/reseller sells the product by use
personal selling method. For attracting corporate clients a group of
executive engage in personal selling. For GP it is very effective to the
target market. So, GP uses personal selling.
3.Sales promotion
Sales promotion refers to many kinds of incentives and techniques
directed towards consumers and traders with the intention to produce
immediate or short-term sales effects. GP takes sales promotion to
increase their selling and profit like:- Start-up offer, Reduction of price
for few days, sponsorship, arranging competition, complementary gift
package, free facilities
4.Public Relation:
GP arranges some objectives to go near to the target market like-
Press relation about product launching, Public affair, Press briefing with
another firm, Special tour for product publicity, Corporate relations.
 STRENGTHS
1. Good Ownership Structure:
Grameenphone is a joint venture enterprise between Telenor (55.8%),
the largest telecommunications service provider in Norway with mobile
phone operations in 12 other countries, and Grameen Telecom
Corporation (34.2% ), a non-profit sister concern of the internationally
acclaimed micro-credit pioneer Grameen Bank. The other 10% shares
belong to general retail and institutional investors.

2.Easy Access to the Widest Rural Network:

Through the help of Grameen Bank, this was easier to Grameenphone
to reach the rural area of Bangladesh.
3.Network Availability:
Grameenphone has the widest network coverage and a large number
of BTS station (Tower) all over Bangladesh. That’s why the company
can provide better connectivity in most of the area of the country.
4.Brand Name of Grameen Image:
Grameen Bank is well known all over the country because of its
appreciable activities in financial sector for poor people in Bangladesh.
So, when the name Grameen has been added with this telephone
company, the organization gets a huge exposure due to this Grameen
image.
5.Financial Soundness:
Because of effective strategic planning, Grameenphone is able to earn
a healthy amount of revenue, which gives them financial soundness.
 WEAKNESSES
1.Complicated Pricing Structure:
Grameenphone has lots of products. The pricing of these products and
their billing policies are different which also difficult for a user to
understand.
2.Cultural Gap:
In Grameenphone management, employees from different countries
are existed. Suppose, CEO is a Noregian, Chief Technical Officer is
Indian and many more employees come from different countries. That’s
why sometimes there may be lack of understanding due to cultural gap.
3.Lack of Harmony among SBUs:
Intercommunication among various departments is little bit weak. The
reason behind this, there is no exchange program for employees to
work among various Strategic Business Units (SBUs).
4.Problem Contained Offers:
Recently almost all of the new offers of Grameenphone are having
some technical problems. Either they are not working at all or part of
the services of those offers is disabled. Moreover, Grameenphone is
also delaying to solve these problems which are only raising the
dissatisfaction level of its subscribers.

5.Many Men Many Minds:

Sometimes different ideas may create problem. In Grameenphone, this
is highly encouraged to apply new strategy for better performance.
Sometimes, it may create problem because employees are used to with
previous strategy.
 OPPORTUNITIES
1.New and Better Interconnect Agreement:
Grameenphone is going to have agreement with T&T to have better
communication from land phone. The organization has agreements
with other operators like Robi, Teletalk, Banglalink to have better
internal connectivity.
2. Increasing Demand for Telecom Services:
The market of telecommunication is expanding. So, this is easy for
Grameenphone to achieve the major portion of expanded market
because of its leading position.
3.New International Gateway:
As BTTB has established new gateway to connect internationally, this
is easy for mobile phone operators to provide services of ISD call
and international roaming.
4.Flexibility of Mobile Phone:
Communication through mobile phone is popular; because, land phone
connection between intercity is relatively costly. Mobile phone is also
easier to carry and because of its lower cost and easy portability,
people are getting more dependent on mobile phone than land phone.
So, there is a chance to achieve more subscribers and more market
share.
5. Declining Prices for Handsets:
Few years ago the people from low income group could not afford
mobile phone services due to the high price of handsets. Now the price
of handsets has decreased and the low income people want to get
connected through mobile phone.
 THREATS
1. More Rigid Government Regulations:
Government is becoming restricted for taking away currency from the
country. So, foreign companies are threatened because they may have
risk to back their investment to the country. The government also put
restriction for work permit of foreign employees.
2.Political Instability:
Political instability is another threat. With the change of Government,
policies are also changed. So, this is difficult for any multinational
organization to cope with new policies.
3. No Cooperation from Government Agency:
BTTB does not want to provide better services to other operators,
because, it wishes to remain competitive.
4.Upgraded Technology Used by Competitors:
New mobile phone operators like Banglalink, Robi-Airtel are
establishing their channels with latest technology, whereas Grameen
Phone is using the stations which are five years old. So, this is one of
the disadvantages for Grameenphone.

5.Devaluation of Taka:
As the investment occurs in foreign currency, that’s why the
devaluation of Taka decreases profit from financial point of view.
 COMMENTS & SUGGESTION

First:
Introduce simple price structure
Second:
Improve 3G internet services by reducing technological obstacles.
Third:
Reduce voice call rate and data charges.
Fourth:
Improve internal communication between advertising and operations
department to avoid overpromising.
Fifth:
Should take necessary steps to reduce call drop problem and increase
BTS capacity to minimize subscribers load.
.
 REFERENCES

1.Annual Report of Grameenphone Ltd., 2016

2.Phillip Kotler, Marketing Management,14th edition.
3.Rana Alamgir and Nitin Anand. A Study of Bangladesh Telecom Market. Mälardalen
University, Västerås, Sweden
4. https://www.grameenphone.com/
5. https://en.wikipedia.org/wiki/Grameenphone
6. BTRC. (2016). Mobile telecommunication market structure. Retrieved February 2016,
from http://www.btrc.gov.bd/content/mobile-phone-subscribers-bangladesh-january-2016.
7.Telenor (2017). https://www.telenor.com/search/GrameenPhone/