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StarHub LtdSAVED Presentation
BUS317DStrategic Management
Overview1. Background of Company
2. Challenges / Problems Faced
3. Directional Strategy• Growth Strategies Option
4. Defensive Strategy
5. Portfolio Strategy• S.A.V.E.D
6. Strategy Statement
7. Conclusion
Background of
Established in 1998, StarHub owned a new generation, integratedbroadband information-communications network that is principally fibre-based which gave them the ability to provide a range of telecommunication services, including mobile, fixed-line and internet (formally known as Cyberway) to both residential and corporate markets.
Back then, only Singapore Cable Vision (SCV) provided cable television and cable modem services, because of the extensive broadband network construction that was completed in 2000. It was back then a new technology, and SCV has plans to introduce cable telephony to compete with the players then. After final considerations by StarHub’s shareholders in 2001, StarHub eventually bought SCV for a hefty sum of S$74 million from Singapore Press Holdings (SPH) and this gave StarHub the ability to include cable services in their portfolio.
Today
• Owns island-wide Hybrid Fibre-Coxial networkthat delivers multi-channel pay TV services
Mobile network : provides 4G, 3G and 2G services
Broadband services for both residential and businesses.
Fixed voice services for the home and office
• Tight competition: Rivals Singtel and M1 who offer similar services to same targeted customers
• Shared wireless coverage: M1, Singtel and Starhub are available all across Singapore
• The need to increase market share• Need to retain/hire workers that enjoy working for you and
enjoy being a customer of• The need to develop new areas of opportunity to increase
competitiveness• To build consumer’s confidence !
Challenges / Problems Faced
Directional Strategy
MissionAnd
objectives
Portfolio strategy
Parentingstrategy
Directionalstrategy
• Concerned with the firm’s orientation towards growth
• 3 Options– Growth Strategies– Stability Strategy– Retrenchment Strategy
Directional Strategy
Decision 1 Decision 2 Decision 3VerticalHorizontal
ConcentricRelated Industry Value Chain
ConglomerateUnrelated industry value chain
Same industry value chain
Inte
rnal
or E
xter
nal
Concentration
Directional Strategy
Defensive Strategy• Defensive Strategy
Focus primarily on
customer retention and
optimize position in market share
• Offensive Strategy Expand market to become
global player to achieve the
greater profit
Defensive Strategy• StarHub Reward Points
StarHub Reward Points are issued to all active StarHub consumers upon successful payment of their StarHub charges & payments.
• StarHub can expands its customer loyalty programme in collaboration with Caltex (Thanks! Rewards Program)
Caltex Thanks! Card Earn 1 Thanks! Point per Litre pump
Earn 10 Thanks! Points per StarHub monthly bill Earn 10 StarHub Reward Points per Litre Pump
Portfolio Strategy
Services Mobile Pay TV Broadband Fixed Network TotalMarket Shares 28% 78% 17% 5%Growth Rate 2.8% -7.9% -1.2% 2.3%Segment Value ($m) 1,123.93 122.56 362.94 1,800.00Contribution 56.00% 17.01% 10.98% 16.01%Market Revenue $314.70 $95.60 $61.70 $90.00 $562.00
Portfolio Strategy
• STARS (NIL)
• High Market Share & High Market Growth
• Well-established, and these are fantastic opportunities
• CASH COWS (Pay Tv)– High Market Share & Low Market Growth– Well-established. However, the market isn’t
growing and your opportunities are limited
Portfolio Strategy
Services Pay TV
Market Shares 78%
Growth Rate -7.90%
Segment Value ($m) 122.56
Contribution 17.01%
Market Revenue $95.60
Portfolio Strategy
• DOGS (Broadband)– Low Market Share & Low Market Growth– Market presence is weak. It’s going to be
difficult to make a profit.
Services Broadband
Market Shares 17%
Growth Rate -1.20%
Segment Value ($m) 362.94
Contribution 10.98%
Market Revenue $61.70
Portfolio Strategy
• QUESTION MARKS (Mobile & Fixed Network)– Low Market Share & High Market Growth– Opportunities that no one knows what to do with. – Require serious thought as to whether increased
investment.
Services Mobile Fixed Network
Market Shares 28% 5%
Growth Rate 2.80% 2.30%
Segment Value ($m) 1,123.93 1,800.00
Contribution 56.00% 16.01%
Market Revenue $314.70 $90.00
Staging• Retain and increase PAYTV market share; Increase market share of Broadband,
Mobile & Fixed network
• Stage 1: Invest to improve products and services
• Stage 2: Invest in advertising and brand-building
• Stage 3: Invest in Customer Retention Programs
Arenas• Offering a full range of information, communications and entertainment services for
both consumer and corporate info-communication markets in Singapore
Vehicle• Organic, Internal development of info-communication products and services
Portfolio Strategy - SAVED
Economic Logic• Premium pricing and Preferred PAYTV service provider status
• Competitive pricing for other info-communication products / services (Broadband, Mobile & Fixed Network)
Differentiator• Reliable products & services; Attractive & Competitive prices; Excellent customer
care services; Attractive rewards system
Portfolio Strategy - SAVED
To grow and become the top and best local info-communication service provider in the next 5 years by providing expanded professional services together with excellent work ethics to cater both consumers and corporate customers’ needs. (35 Words)
StarHub’s Strategy Statement
Summary & ConclusionBackground of StarHub
Challenges / Problems StarHub faced
3 Strategies
1. Directional - Growth Strategies Option
2. Defensive
3. Portfolio (S.A.V.E.D) Starting point of analysis, not the end point
Focus on the process by asking the right questions
Summary & Conclusion Portfolio Strategy (BCG Matrix)
• STARS (NIL)
• CASH COWS (Pay Tv)
• DOGS (Broadband)
• QUESTION MARKS (Mobile & Fixed Network)
StarHub’s Strategy Statement• Objective : Begins with a definition / goal of the end that strategy is designed to
achieved and is measurable
• Scope : Where company will operate and who is the target audience
• Advantage : What StarHub do differently from its competitors to achieve their
objective
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