Celtel Proposal

INTRODUCTION

The paper written in response to the Celtel Challenge which invites participants to evaluate Celtels performance over a period of time (that is their achievements in relation to the expectations) .the comparison of the companies vision and objectives to the expectations of the consumers in the market they serve. A further look at the trend on the market in and what they expect of the companies and their products. This is clearly seen through the media's reflection of the company and the importance of the company’s Public relation in dealing with the various issues that affect the organization this enables the organization to have a clear understanding as to the importance of brand and image strength on their market campaigns.

The main focus on the paper is on strategic management of the company and how it affects the organizations activities as well as the company’s competitive advantage. Strategic management involves strategies used and their appropriateness to the market used. The approach to understanding this is through looking at the companies approach in comparisons to the market leader’s different approach to market penetration.

The paper further looks at the value chain analysis of the company, the interrelationship between the functional units and how the functional units contribute to the creation of value for the consumers. The value chain analysis helps identify the various under which improvements can be made to enable the increase of the customer value. Once the value chain is clearly understood then cost leadership can be enhanced to produce at more efficient ways and the interconnectivity between the functional units increase informational competence thus competitive edge is increased.

Finally the business level strategies used by the company yare broken down and an analysis effectively they are implemented the effectiveness of the strategy in the market and in the giving the organization a competitive advantage over its competitors. The effectiveness of the strategies chosen in relation to the changing market trends. Does the strategy implemented give room for the organization to change in relation to the changing customer requirements, trends and competitive strategies? If not why are you still hanging on to it?

The clear understanding of the strategy used in relation to the environment trends and eventually the organizations goals is what the paper helps to create an understanding and clarification on.










CELTEL’S HYPORTHETICAL ORGANIZATIONAL STRUCTURE.

Corporate Social Responsibility
Sales and Marketing department
Engineering and I.T. Department

Top Level Management
Human Resource Department
Finance and Accounts Department
Market and sales department

Over the past few months Celtel has made an amazing recovery on their marketing campaigns making them more noticeable in more ways than one through the promotion of the local as well as international talent. Through the various promotions made they have actually made steps toward having their impact felt in the local market thus encouraging a relatively higher level of interest on their activities around the country. This is a remarkable effort and recovery from thier previously less assertive ways of organizational awareness and image strengthening. The company is now able to make an impact through the publics increased awareness of the company to educate them on the product on their portfolio with regard to the services and the price behind them. Further improvements can be made through better understanding of the Kenyan market. The marketing department should have all the relevant information available within and out of the organization in order to make better decisions on their approach to advertising.

The breakdown of the organization into their various functional levels helps in the analysis of where the company went wrong and how to correct it .The marketing department in Celtel’s case seems to be de-linked from the top level management and the engineering department; In that they are not able to work on the top levels vision of the kind of services the company should be offering and relating this information to the public. This is clearly shown by the CEO’s announcement on the introduction of 3G services and the Blackberry the CEO’s vision was communicated at a relatively earlier period than the competitors, yet the competition were able to make an earlier public promotion than the company in both cases. This shows a lag in communication between the top level management and the marketing department further communication breakdown between the engineering, IT and marketing which makes them slow in the formulation and implementation of a marketing strategy in form of a public educational forum. The marketing should be able to know, understand and communicate the capabilities of thier technology.

Poor communication: .The companies various promotions are relatively incomplete in one way or another. The potential customers have no idea as to the rates or the various segmentation packages available. In my search for information as to the peoples understanding of the packages it seems that even Celtel customers have no idea what packages are offered! They shift according to the available information with the regard of a new product not knowing whether they are better services being offered by the organization. The reason safaricom seems to prosper is because the consumers have information on the service packages available which has empowered them to make choices as to which package suits their lifestyle. The consumers are unwilling from a point where they know and are able to control their expenditure. The movement from the known to the unknown scares the potential customers away. Therefore the marketing and sales should understand that the provision of information to empower consumer choice is important.

Celtel's using the global strategy to penetrate the local market. Although the global strategy enables them to take advantage of the economies of scale it is not working well in the market given the three East African countries have different responses to advertisements. The Kenyans relate very little to the Tanzanian advertisements especially them being in Kiswahili and are complete different to Kenyans perception to what an advert should have: The previous exposure to the Kencell and Celtel advertisements shows that consumers were attracted to either the company’s products based on their understanding as to what the company portrayed.. The lack of a common ground on the standard of advert makes Tanzanian adverts relatively unattractive therefore little understanding of the product and the message passed across.E.g Fanta’s ‘Bamboocha’ advertisement in Kenya is different from that of Tanzania and no one seem to understand their version or like it at all. Based on this ground; the same advertisement can have different responses in different areas and therefore should be tailored to the market. Therefore in this case cost reduction affects the company in negative way. market research over the pat few years has shown that consumers are moving toward tailored product due to various reasons the need to be patriotic being one of them.

There has been a significant increase in the purchasing power of the Kenyans therefore as price does not play such an important factor on the spending decisions as it is deemed to be. The number of high level spenders ahs increased by a significant number and therefore in there is more to their spending decisions than price, More of the big spenders are now focused at the type of services the providers are offering and the importance of the service to their activities. The market is therefore breaking down into the various preferences in accordance to the services and therefore a clear understanding to what the different consumers is on the look out for gives the organization competitive advantage.

Finally the sales people should be given some training on how to make and meet sales targets professionally without looking desperate or expressing their desperation and frustrations. This give room for them to be taken advantage of or room to use unscrupulous way to meet the targets. The clear portrayal of the company’s image should be articulated to them.

Conclusion
The sales and marketing department should focus on provision of information that will enable the organization to create customer value. Thus the flow of information within and out of the organizations. The availability of the relevant information enables the department and eventually the management make the appropriate decision with relation to the market needs. The availability of this information enables the organization to come up with innovative products that enables them to stay ahead of the competition

A good and marketing department enables the company to maintain a good public image and therefore reduces the impact of any negative publicity. The strengthening of the marketing will enable the company to be in line with the customer trends which enable them to come up with products that bridges the gap between the services that they offer with customer expectation.

BRAND REDESIGN.

Celtel Kenya entered the Kenyan market through the acquisition of Kencell they redefined their brand and strategy to targeting everyone in the market unlike Kencell which focused on the high end of the market; Thus elimination of market specialization that Kencell had established .The redefinement of their strategy led to further defragmentation of the market by removing the paradigm that Celtel was for the ‘who is who’ in society. The redesigning of the Celtel image might help in redefining the market and position Celtel in the market. The market position will help Celtel focus on different areas and be able to access which of the market segments is bringing in more cash in order to come up with better services that will particularly define the consumers of the segment.

Engineering and Information Technology.

The engineering and IT department in this case is considered as the research and development team as well as the quality assessment team. This is because they are the ones that ensure that they provide adequate services to the customer reducing any technical hitches and coming up with better forms of provision of services.
They act as a research and development team because they look at the improvements in technology then educate the management on the changes and the importance of the investment on the technology .They also help in development of application that are improve and give better services to the consumers and thus help in the differentiation of the product giving the company competitive advantage.

Celtel have the best systems in term of service and speed but due to the seemingly communication breakdown between the marketing and engineering department they are unable to communicate effectively the capabilities of the services that are being offered. The information if relayed to the engineering department as well as IT Department they would have been able to come up with applications that will increase the company’s competitive edge.e.g. The main problem with the movement of individual from one network to another is communicating the change of number to their phonebook. Thus if an application which at the request of the consumer is able to alert the phonebook to the change of numbers then that would be one less obstacle to the company. Causing a probable increase on market share acquisition.

Over the past couple of months the number of site that host downloadable applications have been on the increase due to the increased capabilities of the phones. The number of virus unscripted downloadable are relatively high which have been affecting the phones in various way causing trouble and losses. The availability of an antivirus that can be provides for the mobile phones that protects them from virus attacks. The initial cost can be borne by the consumer at subsidized rate as long as they are downloadable update o the Celtel site. This will reduce the attack and save the cost of repairing for the phone and cost of acquiring new software to install.

With the development of Google earth and further developments on the global positioning system the provision of the service might help in more ways than one from the provision of maps on Kenya to the eventual location of a stolen or lost phone.

Conclusion
The IT department should create a user website under which Celtel subscribers are able to access specialized services from the computer from improved use of smart phones to forums that develop the members to the various areas of interest to them

Finance and accounting
The accounts and finance department are no doubt efficient as they are able to come up with figures that enable the company to be a cost leader in the sector by provision of the lowest prices in the market and still manage to make some significant profit and invest in capital projects.
Due to this it assumed that they are well versed in the divesture strategies in case of excess liquidity and therefore able to provide additional sources of income to the organization. Due to the companies operations in the various countries I assume they are able to come mitigate against the various risks associated with operating in several countries. Because the departments activities are based more or less on the competence of the employees in the department and the choices they make.

The department’s efficiency in their forecasts and budgets would be further enhanced if relevant information on the market trends and technology changes allowing teem to come up with better financing options for the company’s expansion and better analysis of the variances between the forecasts and budget.
At some point in time Celtel had introduced phone insurance and asset acquisition options to their range of products. I thought with the proper breakdown of the insurance premiums or monthly payment schedules in conjunction with the relevant service providers Celtel would have been able to form beneficial alliances with the insurance companies and the dealer to promote Celtel’s branded products to a level whereby for the high end phone’s insurance was a necessity. On the asset financing Celtel’s branded phones could be advertised to the general public especially rural areas educate them on the payment system and encourage them to take the offer. This would be inclusive of Celtel’s cheapest line to enable them to look at the affordability and make decisions based on price.

Their understanding of economic growth their projections as to the effect on the economy and the impact on the firm’s profits may enable the firm to come up with relevant strategies to counter the problem. the increased understanding of the economy in relation to the rest of the world will help the organization be able to counter certain risks that are associated with the market.E.G from July to September 2007 there has been a credit crunch and the cost of debt has been on a new high across the European Asian and American economies whether this is likely to affect organization in case they have to source for funds that will be dependent on the companies needs and the extent to which the economy is affected.

The population index as shown by ECK entails that Kenyan adult population is composed of two main brackets 18-40 who account for 60% and 40 and above who account for forty the finance and account should be able to use this statistics to come up with price discrimination and yet enable the company to make good profits.

Human resource department

The HRM provides a connection point between the top level management and the departments through organizations of activities and job descriptions that would require different departmental members to interact and share information on the progress of their activities thus making the overall product a symphony of all departmental ideas and objectives .The synchronization of the various departmental goal helps in the better and faster achievement of the objectives both the long and short term. The synchronization which is facilitated by redesign of the employee schedules to make them understand the organizations as viewed by the management merging this interaction with the consumer expectation to help come up with analytical employee’s that are able to interpret the market trends and synergise them into the organizational goals.

Conclusion

The breaking down of the organization into the functional units helps the human resource identify the redundant areas of expertise and come up with innovative ways of revitalizing the employees in those particular areas to enable the company to make efficient use of the human resource. The value chain also enables the department to identify employees with high potential and thus come up with programs that will increase their productivity.

Corporate Social Responsibility.

With the disparities on the inequalities between the rich and poor concerns have been raised on whether it is moral for companies to make such huge amounts of profits from a population whereby 43% are poor. This was clearly shown by an interview on safaricom's CEO published by the nation dated 13th October 2007 whereby one of the major questions was the morality of such huge profit on such a population. Due to this growing awareness on the issues affecting the society the strength of the CSR department is likely to have an impact on the amount of consumers that companies are able to retain or attract. The companies CSR should be felt on all sectors that are likely to impact on the society in one way or another making the company well ahead of the competitors in every way and in the event that government comes up with regulations on the industries activities the company will be well ahead of the competitors in such developments.

A case in point on the Sunday Nation published 21st October 2007 the was an article published on the hazards posed by electrical equipment but with a CSR department it can be on the look out for solution so that in case it eventually causes panic to the public at some future date the company is able to appease the market through education or offering the relevant solution before the competitors.

The environmental protection is also playing a relatively larger role in the political and economic decision.e.g on the 26th October 2007 the French President Nicolas Sarkosi declared a temporary freeze on expansion of road and air transport due to air pollution and promoted the use of trains instead. The French hailed this decision and in one way or another diffuse to the rest of the European countries eventually to Africa. Earlier recognition of possible impacts of world leaders’ decisions helps reduce the uncertainty in certain areas therefore reducing the future cost of compliance when cost will be inflated.

SAFARICOM HYPOTHETICAL ORGANIZATIONAL STRUCTURE

Finance and Accounts
Top Level Management
Marketing and Sales Department
Human Resource Department
Engineering and I.T Department
Corporate social
Responsibility

Business Model

Their business model is multi domestic which means they customize their products to suit the needs of the public in any area. The various forms of market segmentation make the consumer able to choose the kind of tariff system that is suitable to the kind of life they live. The different approach to the different segments is also reflected in their advertisement they have twig distinct forms of advertising which concentrate on the two relatively forms of lifestyle. The advertisements are they by promoted at the different stress level given that they two main divides have different outlooks on the time period a promotion should go on for. The different perceptions and preferences therefore aim to counter balance the awareness and therefore on a regular basis there is a greater awareness of safaricom's services.

The multi dimensional allows adequate flow of information between the departments and therefore better forms of tackling the competition are achieved at a relatively faster rate to the focus of the organization toward a common goal. Cost leadership does not necessarily take effect in this business model but with a clear understanding and more experience in the market they are able to subsequently compete with the rivals at the cost level.

Marketing and Sales

The department realised that Celtel had launched a massive campaign through their sales team they realised that eventually annoy their consumers and therefore reducing the public opinion and therefore gradually reduced the number of sales staff instead put them in the various safaricom centre. this eventually gave the look that they were providing a better and more professional service while in the real sense they just cut down the cost of employing sales team by making what they were doing a viable business. With his move they further changed the perception and status quo.

Safaricom seem to be able to be able to pass their massage in a language that consumers understand better and therefore having them edged on the consumer’s heads for some time. This is because they understand their products and understand the trends within the various market segments and therefore are able to counter any discontentment thus retaining the consumers and cater to their needs to a level that they are satisfied. This they do by getting the information from the relevant sources siphoning the information, redefining their services in ways that will appeal and add value to the final consumer. Finally convey the changes to the market in forms that will attract their interest and nature it over a period of time.

Strategy and Implementation ; safaricom seem to have a knack for getting the competitors vision evaluating the market need mobilizing their resources to implement a competitor vision at considerably earlier time margins. This form of competition has led to a boost in their image as they are seen as an innovator in the industry thus giving them an excuse to charge high rates. Recently on a publicized deal with access Kenya they were able to adequately shift the blame to their service providers and thus claiming with the effect of the new contract they would be able to charge lower rates. This may or may not be true but they used that as marketing and a PR strategy to keep the goodwill of the Kenyans. They were also to promote the blackberry and eventually after sometime the 3G services before any of their competitor yet the idea did not originate from the organization. The hype they create before they roll out the services makes them look well researched and equipped to do it. They also research on the migration from on service provider to another without necessarily losing your number and they made a statement to that causing problems and had been tried and failed in South Africa the CCK further reinforced their statements.

Their adequate understanding of the trends in the market is shown by their understanding of the trend of their various consumers. The investors businesses and professionals are now on the move toward Rwanda and Safaricom was able to not the levels of Kenyan interest in the country and therefore formed strategic alliances in the country to cater for the need of their subscribers in the region.

Public Relations
There is no doubt that Safaricom is using its leadership in the market to bully their competitors. Truth is told they have such a good PR system that they are able to defend themselves against litigation and negative public image. one of the most recent was the Telkom versus Safaricom where Safaricom had blocked their subscribers from interacting with Telkom via short messaging and in addition to that they had taken Telkoms 460 voter status line. When this came to the limelight safaricom retorted it blocked interaction with Telkom because the law prohibit dealing with unregistered firm. Basically they took advantage of the confusion raised by Celtel’s CEO on Telkom and the CCK’s law to engage in uncompetitive practices and still eventually on the correct side of the law as well as maintain their public image. They also managed to put Telkom’s CEO on the spot diverting attention from their practices to making Telkom defensive on their activities.

Their public relations has also been able to get to various people through the various activities that they sponsor from golf tournaments to marathons thus in one way or another are able to reach a wider range of people as well as enhance their public image. During the various sporting activities safaricom is able to keep their image at a relatively high rate as compared to competitors

Engineering and IT.

Safaricom’s engineering department seems to have better communication line with the relevant department as they seem to be able to implement technology changes faster with financial and technical backing from all areas of the company. The inflow of information enables the marketing department to implement services that the public is likely to appreciate. The flow of information also help the department come up with services that are in line with the trend in the market thereby making the services a part of the market is hyped on. E.g. they have started a primitive form of a chat room whereby the cost of communication between the members of the cheaper. The group forum also consists of members chosen by the members with a customized name therefore again the consumers are given the power of choice! The clear understanding of changing communication needs of the consumers and advancements in the technology keep the department on toes as on how to keep up innovate and improve the current.

Finance and Accounting
Their finance and accounting are likely to be in relatively good shape and are well managed as they are able to avail funds needed for investment on capital projects once the cost benefit analysis and feasibility study has been done. They are able to balance the organizations current requirements with its future objectives and thus are able to provide the funds at well timed intervals enabling the company to be faster at entering market segments that would require large sums of money therefore in various companies the hierarchy may affect the speed of funds being released.

Human Resource Department.

Due to the presence of a strong brand and image they are not likely to have problems in attracting the best minds in the country. The development of the employees is relatively good as observed from their previous editions from their company editorials. The staffs were content with their posts and had been working for the company for relatively long periods of time and were planning to continue doing so. Therefore the recruitment and retention of high level staff is relatively easy due to the high level of satisfaction they have with their jobs. This may be due to the HRM’s ability to identify talent and know where to place them in order for the organization to achieve maximum output from them and enhance the employees’ motivation and dedication to the organization.

The satisfaction and dedication of the employees to the organization create synergies between them [due to the common objective] making them shrewd in their activities but at the same time helpful toward each other to enable the success of the organization.


Overall Strategies to Create Advantages.

Over the past decades the Japanese and Chinese organizations have been able to develop from non existence to dominance in the world markets while the European and American companies have been unable to keep up with the Japanese penetration strategies. The innovation and development of these organizations has led to the development of a focus on their techniques to come up with two new forms of strategic sciences judo strategies and sumo strategies.

Judo strategy entails the use of the competitor weight to make it a disadvantage to them while summon on the other hand is the use of your weight to crush competitors. In this particular case the focus will be more on the judo since it require the use of wit and strategy to create an imbalance on the competitor before launching an attack. A study conducted by David Yoffie and Mary Kwak shows that japenese firms employ various strategies when penetrating the market unlike the popular belief that they are provides of cheap and low quality products.
The basic processes followed by the Japanese firms are
Searching for loose bricks
Changing the rules of the game
Not always rising to the bait
Outmanoeuvring your master.

Searching For Loose Bricks.

On one of the meeting conducted by the various American and European companies the executives were discussing the effect of the Japanese firms and could no agree on the market penetration techniques that the Japanese firms were using to penetrate their market .during the arguments it emerged that the Japanese firms were using three strategies depending on the loose bricks in the market therefore their penetration techniques were based on the understanding of the market ,thus using a method that would least likely to attract the competitions wrath. The misleading of the completion enabled them to improve thier technology t o adequately penetrate the markets. The techniques of penetration were:
Provision of low priced product.
Penetration from the higher end of the market
Focusing on a neglected market segment
Provision of low priced products: the Japanese are able to produce at relatively lower cost than their competitors and therefore were able too attract the price sensitive consumers thus enabling them to sell higher number of products to levels that they are able to flood the consumers with their products. This has led to the rest of the European countries to move production bases to the Asian countries.e.g Nike produces its products in china despite the fact that all their shoes are sold in the U.S.Celtel has in on way adopted this form of strategy by trying to use their economies of scale to be a cost leader and try to flood the market with their services but missed the basic point behind the strategy; which is as much as its based on cost leadership the products are presented to the target market in way to which they are attracted to. The Nike shoes are produced for the American market in accordance to American standards. the Chinese and Japanese also tailor their products for the individual markets that is why every executive could not agree how the Asian organizations had been able to infiltrate their markets because I each market they found different loose bricks and tailored their products to suit the space.

Changing the rules of the game.