Course Title: Marketing Management

Course code: MKT 411

Assignment Topic
“Porter model, SWOT and PEST Analysis of
Grameenphone Limited”

Submitted to
Farhana Noor
Lecturer,
Department of Business Administration
Faculty of Business & Economics.

Submitted by
Name ID
Md. Tanvir Hasnat Shuvo 071-11-1697
Alauddin Ahmed Jahan 072-11-1822
Md. Obaidul Arif Khan 071-11-1761
Md. Zobair Ali 072-11-1814
Md. Rashdur Rahman 072-11-1823

Program: BBA Section: A

Submission Date: March 9, 2011

1 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

 An Overview of Mobile industry and
Grameenphone
Telecommunication industry in Bangladesh is in emerging stage,
experiencing robust growth. The monopoly in the field was demolished and
perfect competitive market emerged. Since then the entire cell phone
companies are trying to attract their subscribers through various lucrative
offers. As with advance technological advancement, the mobile
telecommunication industry proved to be competitive. Now Bangladesh has
stepped into the world of first communication and communication has been
made easy through the introduction of cellular (mobile) telephones.
Notwithstanding the initial cost of the mobile phones, the media has
outstandingly increased its popularity as we can see that presently there are
more than 19 million mobile phone users as against 1 million fixes-line (Land
Phone) subscribers.
The existing Cellular phone companies in Bangladesh are CityCell (Pacific
Bangladesh Telecom Limited), Grameenphone Ltd., AkTel Ltd., Banglalink
and TeleTalk & AirtelTelecom ltd. Among these company Grameenphone,
AkTel Banglalink, Airtel and TeleTalk adopted GSM technology and Citycell
the market pioneer started with CDMA technology.

2 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

 Customer Satisfaction Factors of GP
GrameenPhone is a highly growing mobile company. In mobile
telecommunication industry, there are direct and indirect factors that
influence customer satisfaction. I tried to focus on the most important factors
that influence customer satisfaction at GrameenPhone.

Airtime
Airtime is the core offering of GrameenPhone. So, quality of communication,
network availability etc. are the most important customer satisfaction
factors. Quality of airtime depends on the ratio of subscribers and
transmission base stations. If the numbers of subscribers are increased
without developing the network, quality of airtime goes down.

After Sales Services

After sales service is one of the very important factors in the mobile
telecommunication industry. GP has extensive after sales customer care
tools. I would like to focus on these tools one by one:

Hotline
The centralized Call Management Center in Dhaka is manned by trained
professionals and is opening round-the-clock, responding to subscribers’
queries from all over the country where GrameenPhone has its coverage.
GrameenPhone Ltd has recently introduced a single dedicated hotline
number 121 for all of its subscribers to provide instant service. At present
there are more than 450 dedicated and energetic employees are working to
provide instant over phone service to the subscribers. Call Management
Center is well equipped with state of the art software’s and other important
tools through which most of the problems of the subscribers can be solved
instantly. Call Management Center remains open 365 days a year and 24
hours a day.

Interactive Voice Response (IVR)

This is a newly introduced service by GrameenPhone. This is a automated
hotline service. GP subscribers need to dial 121 to reach this service. After
that s/he can get information regarding bill, usage, credit policy, bank name
that receives GP’s bill, and so on by choosing different options. Subscriber
needs to pay TK 2 per minute for using the IVR.

GrameenPhone Centre (GPC)

GrameenPhone Center (GPC) is the most recent innovation of GrameenPhone
with the aim to provide all kinds of mobile phone related services to its
subscribers. For the first time in Bangladesh subscribers will get both SIM
and handset related services from the GrameenPhone Centers. So far
GrameenPhone introduced 39 well decorated GPC in the country. All these

3 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

GPC are not only providing after sales services but also working as the main
sales channel of the company. Within each GPC there is a separate section
allocated for selling and repairing handsets at an affordable cost.
GrameenPhone Centers are open from 08:00 AM to 08:00 PM everyday (365
day).

GrameenPhone Service Desk (GPSD)

Previously people at the rural areas had to come in the major cities to get
customer service, which is a real hassle and time consuming process for
them. To solve this problem GrameenPhone introduced Service Desk with a
vision to provide service at the rural and remote areas. At present
GrameenPhone have total 607 Service Desk around the country through
which it provide service at grass root level. All these GPSD remain open from
09:00 AM to 05:00 PM in five days a week.

Customer Communication
The centralized Customer Communication located in Dhaka, handles written
requests of subscribers, both verbally and in writing 7 (seven) days a week
from 8 AM to 8 PM. Customer Communication deals with all sorts of written
complain received through fax, letter by post and e-mail. It also builds
relationship with the valued subscribers on a regular basis. The major
responsibility of the unit is to maintain relationship with the high users and
ensure that the present subscribers are not going to switch to other
operator.

Travelers To Customer
“Travelers to Customer” is another recent addition of service in Customer
Service Department which is also the first time of its kind in the country. The
major responsibility of this unit is to provide service at the customer’s
doorstep with the slogan of “Let’s not expect the customers to travel to
get the service rather let service travel to the customers”. Currently
it’s providing service in the major cities of the country and to the high
volume users of GrameenPhone.

Corporate Customer Center

The Corporate Customer Center aims to provide quality customer service to
the country’s preferential business customers. A professionally trained team
is dedicated to provide After Sales Services and Solutions customized to the
need of the business customers and initiate pro-active visits as a part of
routine contact to look into the needs with an aim to build long-term
professional relationships. Their professional customer care team is available
to help seven days a week, 365 days of the year - whether for general
queries, or to assist with any problems subscribers may possibly face. Their
dedicated relationship managers are assigned to provide personalized
service right from the beginning of the relationship.

4 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

Five forces Model of Porter-
1. Entry of competitors
2. Threat of substitute
3. Bargaining power buyers
4. Bargaining power of supplies
5. Rivalry among the existing player
6. Government

Entry of competitors
♦ Economic of Scale: it is very easy for GP to increase economic scale.
With 23 million subscribers, more than 40 percent market share, and
billions of dollars invested in Bangladesh, GrameenPhone is meeting
the scale and scope of the challenge—and unleashing widespread
social benefits in the process.
♦ Capital: GrameenPhone has a huge amount of capital mainly invested
by the shareholders. Capital size is $280 million. Moreover, global
institutions like IMF, World Bank etc. have sanctioned loan for GP. This
is a huge success for GP. GrameenPhone total capitalization was
US$120,000,000, including around US$50 million from IFC/CDC, and
the Asian Development Bank (ADB).
♦ Access Technology: GrameenPhone Ltd., Bangladesh’s largest
mobile phone operator recently opted for Oracle technologies to
streamline its business operations. The telecom major will be deploying
Oracle technology to standardize its IT infrastructure and reduce cost
of ownership, thereby enhancing customer service in Bangladesh.
♦ Customer switching costs: GP may design price-structure and
product-offerings in such a way that switching cost to any substitute
product becomes higher and buyers will stick to them.
♦ Customer loyal: Grameen Phone is losing its loyal customer to other
operators due to cheaper and attractive promotional packages from
other operators, though 98% of the population is covered by the
network of GP. For their loyal customers GP can launch promotional
packages, like loyal customer package, GP partner.

Threat of Substitutes:
♦ Quality: Grameenphone give the high standard quality through their
customers. They modified their packages for consumers’ wants and
demand. They provide various facilities, which don’t given by any other
competitors.
♦ Buyers’ willingness to substitute: The loyal GP customers don’t
move any other operator, because they have the highest number of
customers’ and a strong network protocol.

5 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

 ♦ The relative price and performance of Substitutes:

Operator SIM Price Performance

Grameenphone 149 High
Banglalink 300 Moderate
Robi 100 Low
Citycell 400 Very Low
Airtel 150 Moderate
Teletalk 150 Low

♦ Cost of switching Substitute:

When customers’ want to switch GP from another network, then they must
bought a new connection for use.

Bargaining Power of Suppliers:

♦ Concentration of suppliers: Grameenphone have sufficient

wholesaler around the country, so they have a strong supply chain
management. Customers can easily buy the product different Sim
selling shop and customer care centers.
♦ Branding: GP is the highest mobile usage brand of Bangladesh. It has
a strong supply and chin management.
♦ Profitability of suppliers: Suppliers can’t force to price rising. GP
fixed the price and suppliers can only supply the products.
♦ Role of quality and service: GP always provide their services as
maintain highest quality standard as their role.

Bargaining power of buyers:

♦ Concentration of buyers: Grameenphone have sufficient wholesaler
around the country, so they have a strong supply chain management.
Customers can easily buy the product different Sim selling shop and
customer care centers.
♦ Differencation: Products are high standard. Business people can use
Blackberry and Business Solution package.
♦ Profitability of buyers: Buyers can easily get the packages which they
want.
♦ Role of quality and service: Buyers always seek the quality full
products. From the buyer’s need, GP can easily fulfill the quality
service.
♦ Switching costs: It is easy to switch the suppliers. Because it
depends on buyers behavior.

6 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

Intensity of rivalry:
♦ The structure of competition: Absolutely GP is a market leading
company of our country. GP provides highest value rather than other
operators. GP has the highest number of customers’ and they have a
strong network and market system rather than other competitors.
♦ The structure of industry costs: GP takes some stapes or
strategies, when the competitors give any advertisement. When
needed, they can easily cut the price.
♦ Switching cost: Buyers need not to switch. If anyone wants to switch
then, buyers have to carry a high value.
♦ Exit barriers: Now a day, Teletalk, Citycell and Robi can any time out
of market. Because their market system too much poor rather than GP.
They can’t compete with GP.

SWOT Analysis
STRENGTHS:
Being the largest player in the market, GP has a considerable amount of hold
in the market. The strengths of GrameenPhone are as follows:
 Established Brand: The branding activities have led GrameenPhone to
build a strong brand. The mother brand is placed on the same platform
another renowned brands like British American Tobacco, Citicorp etc in
Bangladesh.
 Low start up cost: A low start up cost required to reach out to the
public.
 Individualism: Although GrameenPhone has close affiliation with its
multinational parent company, GrameenPhone has an independent
brand identity in the market.
 Experience in telecom market: Most of the Point of Sale (POS) i.e. the
GP outlets has experience on selling telecom product. GP has the
largest distribution channel in Bangladesh, which enables to offer their
product in every corner of Bangladesh.
 Well located Point of Sales (POS): All the POS’s are situated in good
location, which ensures easy access for all the consumers of the
product.
 Economies of scale: GP has now reached a stage where it enjoys
economies of scale to the fullest extent. If any new punk, i.e. any new
entrant tries to dig its way in by low tariff, then GP can easily counter
that problem by following suit but without any losses as they are low
cost producers already. Attractive profiling of POS which attracts the
customers.

7 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

  Wide Acceptability: The branding activities and the service of
GrameenPhone have earned 69% of the market share.
 Market Awareness: GP has wide distribution network and good
knowledge of this and therefore serves the market demand
accordingly.
 Widest Coverage: GP has covered all over the country. Extensive
Market presence (availability): To make telecommunication accessible
to the mass market, GP has set up its POS in the most convenient
areas of the districts under the GP network.
 Customers Trust: Wide connectivity, easy communication and
affordable price have earned customer confidence and made people
depended on GP on a day to day basis.

WEAKNESS:
Every company has its weak points and GP is no exception to that rule. The
weaknesses of GP are:
 No Copyright: The GP brands are not protected by copyrights, which
has led to the misuse of the branding attributes and bears the risk of
such misusage in future as well.
 Market follower: GP is not market leader as they follow others. GP is
good at following suit rather than innovation. The proof of this can be
seen now, as its rivals reduce tariffs and increase the increased validity
of the prepaid service, GP immediately followed suit. In fact it came up
with a whole new package called DJUICE, consisting of reduced call
rates. This attitude of GP is a very big weakness as new subscribers are
immediately attracted to the price cut of GP’s rivals and by the time GP
follows suit, it would have lost the potential subscribers to its rivals.
 Lack of innovation: GP still now does not have the latest mobile
Internet technology, which by the way is quite old and did not start
MMS, i.e. multimedia messaging. This is a major setback for GP as new
funky stuff always attracts young and enthusiastic subscribers and
thereby increasing the revenue for GP.
 Lack of working capital for Outlet and Individual agents: This is a major
setback for GP as most of the retailers cannot provide optimum service
and thereby hurting GP’s image to some extent.
 Lack of well-trained personnel: Because of this, the sales personnel
lack the convincing power to convince people to use GP’s connection.
 Sub brands are not well established.

8 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

  Billing System: The abrupt barring of connection due to a complicated
billing system confuses the customers. Such hassles lead to an
unfavorable impression for the company.
 Network Limitation: Call drop, congestion, and poor connectivity with
BTTB result in bad image of the company.
OPPORTUNITIES:
o Opportunities for GP are endless. They have the money and experience
to diversify.
o The main opportunities for GrameenPhone would be:
o Brand Value of GP: GP products are well known for its services and
quality. Because of this goodwill many potential subscribers might be
attracted to GP.
o To have continuous presence of GP all over Bangladesh.
o Helpful attitude from GP personnel. People want pampering.
o Marketing support provided by GP. The sales and distribution channel
is supported by GP, which gives the channel a wider opportunity.
o New licenses complementing GSM telephony.
o Strategic alliances with airtime vendors (service providers) would bring
opportunities for further development.
o More international roaming partners.
o Good pre paid service would bring more revenue.
o Ownership of distribution partners.
o Stock return facility. Many retailers are attracted to sell GP products as
GP has a policy to take back unsold stock.
o Stock receiving facility on credit. Retailers also appreciate this facility
to getting stock on credit and pay later.
o Hand set and Kit lifting from the same point. GP sells all cellular related
products at the same place. So it is convenient for the consumer to get
everything under one roof.
o Better utilization of IT resources which would give GP the opportunity
for faster growth
o Sophisticated and flexible billing system.
o Introducing rental phones.
o Increased sale of village phone through Grameen Banks infrastructure.
o Automation of routines and procedures.
o Availability of concern contact point of GP. No matter what the time is,
there is always someone at GP to answer all the subscribers’ queries.

THREATS:

9 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

 No matter how big or small, companies will always have threats that
question their very existence. However some threats remains within
the company itself rather than from its rivals or the anticipated
newcomers. These threats could arise from the strategies adopted by
the company, in this case GP, which prohibit GP to function smoothly.
 The threats for GrameenPhone would be:
 Public demand for discount on price. Everyday consumers are
demanding lower tariffs and better quality. This might pose a threat to
GP.
 GP is anticipating a possible threat from the new entrant BTTB. The
state owned fixed-line monopoly BTTB has entered the market with
extremely low tariffs. It is thought that the competitive environment
that prevails today might be destabilized as BTTB starts operating at
full potential. Currently BTTB poses very little threat to GP as they have
just started their operation.
 Fluctuations in the foreign exchange market as another area of
concern while possible changes in fiscal policies like the tax regime
may also have a negative growth of the mobile phone sector. The
import duty on Handsets has been re-fixed at BDT 3000 for a handset
costing over BDT 10000 and BDT 4000 for a handset costing over BDT
10000. This would replace the existing BDT 2500 flat rate of import
duty on handsets.
 According to recent study, even the existing cost of doing cellular
telecom business in Bangladesh is relatively much higher than that of
the neighboring countries because of the higher cost of leasing
infrastructure, regulatory hindrances, high import duty on handsets,
and high cost of interconnection. For example, the infrastructure
leasing cost from BTTB perE-1 PCM in Bangladesh is about 10 times
higher compared to that in other countries of the south Asian Region.
 Split sale. Day by day consumers are spread out to many other
competitors in the market.
 Higher commission provided by the competitor cellular phone
providers. This discourages the various sales agent selling GP products
 Lack of interconnection with fixed network
 Inadequate information flow regarding future planning of GP. If the
consumer knows the future packages or the coverage expansion of GP
in the future, then many subscribers can make decision in buying GP
before they even think about other cellular companies.
 Change in regulations having negative effect on its business

10 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

 Tremendous sales pressure from GP. The sales and distribution system
of GP is under severe pressure all the time to increase the sales figure.
We all know that pressure doesn’t always achieve the desired level of
sales, but it might disrupt it.
 Political favoritism to other operators.

11 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

PEST Analysis:
 Political
o Tax Policies: 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.
o Consumer Protection: Consumers’ are protecting in this network.
Any one can’t easily collect about the individual’s information,
o Safety Regulation: VIP’s numbers are always disclosed and
maintain a serial.
o Political Stability: in our country all of the business has strong
political stability so GP is always in political stability.

 Economic
o Economic Growth: GP contribute their share in SEC. there
economic growth is rather than the other competitor.
o Unemployment policy: It is a large company and it has about
30000 employees around the country.
o Stage of business cycle: Now GP has stay in 3rd position in
maturity life cycle.
o Consumer confidence: Customer confidences of GP users are too
much high in every user sector. Business solutions for Business
persons, Djuice for young generation and other regular packages for
normal users.
o 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.

 Social
o Income distribution: they are contributing their income throw
dividend to their share holders. Existing they are connect with
several social responsibilities.
o Lifestyle changes: Mobile user can change their lifecycle stricture.
Anyone can get everything through using mobile and internet.
o Education: GP contribute their existing income for the rural
education. They have a theme that, “Alo asba e”

 Technological
o Govt. research spending: They are contributing with the Govt.
research spending every time.
o Industry focus on technological effort: Their technological
effort is higher than other competitors.
o Internet: EDGE system is first open by GP. They are the market
leader of mobile connection modem also.

12 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

 o Mobile Technology: They always offering value added mobile
technology service.

13 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”

 CORPORATE SOCIAL RESPONSIBILITIES
GrameenPhone started its journey 10 years back with a believer of “Good
development is good business”. Since its inception, GrameenPhone has
been driven to be inspiring and leading by example, when it comes to
being involved in the community. GrameenPhone believe that,
sustainable development can only be achieved through long term
economic growth. Therefore, as a leading corporate house in Bangladesh
GP intend to deliver the best to their customers, business partners,
stakeholders, employees and society at large by being a partner in
development.

GrameenPhone defines Corporate Social Responsibility as a

complimentary combination of ethical and responsible corporate behavior
as well as a commitment towards generating greater good in society as a
whole by addressing the development needs of the country.

To interact effectively and responsibly with the society and to contribute

to the socio-economic development of Bangladesh, GrameenPhone has
adopted a holistic approach to Corporate Social Responsibility, i.e.
Strategic & Tactical. Through this approach GP aims to, on the one
hand involve itself with the larger section of the society and to address
diverse segments of the stakeholder demography, and on the other
remain focused in its social investment to generate greater impact for the
society.

GrameenPhone focuses its Corporate Social Responsibility involvement in

three main areas - Health, Education and Empowerment. They aim to
combine all their CSR initiatives under these three core areas to enhance
the economic and social growth of Bangladesh.

Conclusion
As the research finding show the poor service awareness status of
Grameenphone subscribers, hence obviously GP has to increase
awareness of subscribers. Increased service awareness status will raise
the service value of GP, increase subscribers usages rate result increase
revenue for GP. If continuous development of new product and service
can’t simultaneously aware subscribers then it will neither worth much to
subscribers nor add value to the company. Hence, it is clearly observed
that there is a GAP between services provided and services awareness.
Now GP has to consider this GAP minimization and maintain alignment
with service offering and service awareness. Otherwise, in the long run
new services innovation will not give its ultimate success.

14 “Porter model, SWOT and PEST Analysis of Grameenphone Limited”