Download
1 / 60
E N D
INTRODUCTION • Connection has long served as a potent sign of power. In the era before cell phones, popular culture served up presidents, and crime bosses who were never far from a prominently placed row of phones, demonstrating their importance at the hub of a vast nexus. Similarly, superheroes always owned special communications devices: for example, Bat phone of Batman. To be able to talk to anyone, at any time, without the mediator of the human messenger and without the messenger’s attendant delays, is a thoroughly modern success of human engineering.
INTRODUCTION • In 1983, Motorola introduced DynaTAC, now considered the first truly mobile telephone, and by the end of that year, the first commercial cellular phone systems were being used in Chicago and in the Baltimore/Washington, D.C. area. Nokia launched its own mobile phone, the cumbersome Cityman, in 1987. These first-generation cell phones were hardly elegant—many people called them “luggables” rather than “portables,” and as one reporter noted in The Guardian, “mobiles of that era are often compared to bricks, but this is unfair. Bricks are quite attractive and relatively light.” But they made up in symbolic importance what they lacked in style; only the most powerful and wealthiest people owned them. Indeed, in the 1980s, the only other people besides the elite and medical professionals who had mobile technologies at all (such as pagers) were presumed to be using them for evil reasons. Who else but a roaming drug dealer or prostitute would need to be accessible at all times?
INTRODUCTION • This changed in the 1990s, when cell phones became cheaper, smaller, and more readily available. The technology spread rapidly, as did the various names given to it: in Japan it is keitai, in China it’s sho ji, Germans call their cell phones handy, in France it is le portable or le G, and in Arabic, el mobile, telephone makhmul, or telephone gowal. In countries where cell phone use is still limited to the elite, its power as a symbol of wealth and prestige remains high. But in the rest of the world, it has become a technology for the masses. It is also true for a small and poor country like Bangladesh. Thanks to the man Prof. Dr. Yunees, who with his ability to see things from a different perspective, gave people of Bangladesh the accessibility to cell technology.
INTRODUCTION • After a slow start, because of the prices charged both by the cell phone manufacturers and cell service providers, the growth rate of the cell phone market in the early ‘00 in Bangladesh has been very high. Infect, it is higher than the countries that are manufacturing it or developed countries. • In the following pages, we as a group have tried to find out the attitudes and perception towards the Siemens cell phones by the young generation and whether the company can sustain in the near future as the competition is growing
COMPANY PROFILE 1.1 HISTORICAL BACKGROUND Founded in : October 1847, at Berlin in Germany. Founder : Werner Von Siemens & Johnson Georg Halsk Named as: Telegraphen –Bausanstalt von Siemens and Halske.
HISTORICAL BACKGROUND • Telegraphen- Bauanstalt von Siemens & Halske”-the Siemens & Halske Telegraph Construction Company-was found in the mid 19th century, a time characterized by revolution and transformation in politics, industry and society. Technological progress altered people’s lives at a breathtaking pace and in ways previously unimagined. Through his inventions and innovative technologies available on a broad scale, Warner von siemens played a key role in furthering this process of change. The company he founded developed from a simple workshop into a major enterprise, which by the time World War-1 broke out, had advanced to become one of the world’s leading electrical companies.
HISTORICAL BACKGROUND • In 2003, Siemens turns 156 years old. Throughout the world there are few industrial companies of a similar size that can take back on such a long and successful history. Since it’s beginning as a small workshop in Berlin, the company has grown into global enterprise, with operations in 190 countries in Europe, the USA, Asia, Africa and Australia.
COMPANY PROFILE 1.2 SIEMENS IN BANGLADESH Siemens has been operating around the globe in 190 countries with a work force of 443000 employees. The Company’s headquarter is in Germany, named Siemens AG. Siemens Bangladesh Limited is fully (100%) owned by Siemens AG. Siemens Bangladesh Limited started operating its business in Bangladesh as a part of its global operation from 15th February 1974, with three core areas of business. Since then the company had been diversifying and expanding its business areas, and continuing its success in the field of information and communication, automation and drive, generation and distribution, medical systems, lighting systems and home appliances.
SIEMENS IN BANGLADESH • Siemens has been involved in railway projects in the country since 1962. In 1968, it became the first direct foreign investor to start a joint venture with the government of Bangladesh to manufacture telephone switches and sets. From the beginning Siemens medical systems and solutions have been the country’s technology of choice in this sector. It was also succeeded in power generation and supply. In 1947 it was involved in constructing the “Ashugonj Power Plant” and since then it maintained a good business relationship with Bangladesh power sector. In recent years, it began marketing solar plants, which provide renewable energy to remote villages. it has been also playing a very prominent role in providing mobile handsets.
SIEMENS IN BANGLADESH • Siemens Bangladesh Limited has a huge prospect in developing country like Bangladeshi. In the last two decades Siemens Bangladesh Limited was especially successful in terms of revenue. Now its goal is to expand its businesses and achieve an impressive growth within the next few years.
COMPANY PROFILE 1.3 SIEMES BANGLADESH LIMITED (SBL) • Vision: “To provide the best solution and equipment for the customers.” • Mission: “To grow and increase value by implementing advanced technologies, new products and services to provide excellent solutions to satisfy customer’s requirements.” • Goal: “To achieve market leadership, profitability, good corporate citizenship and a sustainable growth.”
Objectives: • “The main objective of the company is to increase the market share in related diversified products and solutions in Bangladesh and to assure the potential customers of the quality and durability of the products. Although the products are a bit highly priced but it is the best bargain that money can buy. ”
PORTFOLIO OF SIEMENS BANGLADESH LIMITED • Siemens’ business portfolio comprises the following business areas: • Power generation (PG) • Transportation And distribution Systems (TD) • Medical Systems (MED) • Consumer Products • Home appliances • OSRAM (Lighting products) • Telecom and information technology (T & IT).
PORTFOLIO OF SIEMENS BANGLADESH LIMITED Siemens Bangladesh Limited has related diversification and their product ranges are divided into different product lines. This decentralized structure gives the greatest degree of entrepreneurial responsibility and the ability to nurture the closest ties to their customers. At the same time, it enables Siemens to provide comprehensive, customer-focused, solutions and services for the local market.
THE MARKET SHARE OF THE MAJOR PLAYERS • As the cell phone companies were reluctant to provide their sales figures and market share data, we have to acquire the sales data’s from the retail stores of Eastern Plaza. Based on the data gathered and through some assumptions the market share of the major manufacturers look like the following:
THE MARKET SHARE OF THE MAJOR PLAYERS • Although from figure, we can see that Nokia dominates the market but in reality Siemens is the market leader. Nokia did not have any corporate office in Bangladesh and moreover, the cells of Nokia entered into Bangladesh through gray market activities and through Grameen contract. For the gray market sets, there were no import taxes and they were sold at lesser price.
THE MARKET SHARE OF THE MAJOR PLAYERS But, the most important thing is that the market share of any of the firms does not secure their position in the industry. At any time, anyone can take over the market because there is no dominant firm in the industry. Moreover, Chinese manufacturers has enter the market . Bangladesh has allowed the Chinese manufacturers to set up China town in the Gazipur area. So, they might develop a competitive advantage and take away the market share from the existing players.
THE MARKET SHARE OF THE MAJOR PLAYERS • But, the most important thing is that the market share of any of the firms does not secure their position in the industry. At any time, anyone can take over the market because there is no dominant firm in the industry. Moreover, Chinese manufacturers will enter the market very soon. Bangladesh has allowed the Chinese manufacturers to set up China town in the Gazipur area. So, they might develop a competitive advantage and take away the market share from the existing players.
PEST ANALYSIS POLITICAL ENVIRONMENT • Political environment is quite unstable that might affect Industry operation somewhat. • Frequent change in government policy regarding tax, import and the like might have an adverse effect to the industry.
POLITICAL ENVIRONMENT • Bangladesh has a trend of devaluation of currency over the past years. This indicates that the government is encouraging exports and discouraging imports. As the mobile companies in Bangladesh are importing their sets, the price of the sets for this reason is high. • There are complexities related to law and regulations. Couple of years back when army was in charge of eliminating crime, it was reported that they broke cell phones of students as they thought it was not required by them. This type of situation might have negative impact on parents and they might prevent their children to have a cell phone. • Government decision to enter mobile telecommunication industry might positively affect the industry.
ECONOMIC ENVIRONMENT • Bangladesh has a very insignificant GDP and GNP. • Per capita income for the people of Bangladesh is also low. But what is impressive is that it is improving over time. • The current inflation rate (more than 6%) is higher than what it was in the past years. • Sudden rapid increase in energy price may have significant impact too.
ECONOMIC ENVIRONMENT • High tax imposition by the government will reduce the buying power of the consumers. • The successive governments were unable to collect taxes that are affecting the infrastructure development. Moreover, the policies taken by the previous and current governments are more helpful for employers than employees that are the labor. So, it affects the bargaining power of the majority of the people in Bangladesh.
ECONOMIC ENVIRONMENT • Worldwide negative economic impact after September 11, 2001affecting Bangladesh too. • Recent Iraq war is another reason for potential future sluggish situation of the economy.
SOCIAL ENVIRONMENT • The social value is in challenge as Bangladesh was identified as the number one corrupt nation in the world in a recent survey. So, it effect the general business condition and inflow of FDI. • In Bangladesh, society is clearly clustered in to different categories along different dimensions, for example, higher and lower class population in the society.
SOCIAL ENVIRONMENT • Cultural values are very strong but at the same time, always open to changes and new things. • Concern for quality is less important than concern for price. • Credit facilities are less likely to work in Bangladesh. But Grameen bank has proved small amount of loans or credits to rural poor people positive. So, in general as majority of the people lives in rural areas and are poor the small loan or credits can be successful. But for industrial credits, the default rate is high.
SOCIAL ENVIRONMENT • Families are mostly extended type of and prefer to live with others. • Most of the people are homesick too. • The perception towards young people having long hair is always negative by the elderly people of. For example, at night when they are seen in the roads people try to avoid them to save their cell phones and purses for being carried away.
SOCIAL ENVIRONMENT • Need for affection is valued everywhere. • People think more in-group rather than individually. • Hi-tech products and services are mostly accepted as luxury rather than necessity. But as mobile has been proven to be one of the necessity products its implications has different means
TECHNOLOGICAL ENVIRONMENT • Technologically, Bangladesh is still far behind than the standard. But, the aggressive policy by the government towards IT industry and scopes that are created by the universities can help Bangladesh to become one of the major suppliers of IT workers. • Little focus on the development and training of technical skills. • Moreover, as there are many private universities who are not maintaining their standards the educational level overall is going down and hence, technological expertise is no improving. But, as Microsoft has just established their corporate office and wants closely in the development of IT professional and software experts, the technological environment might improve in the near future.
CULTURE Culture Sub Culture Social Class SOCIAL Reference Group Family Roles & Status PERSONAL Age & Life Cycle Stage Occupation Economic Circumstances PSYCHOLOGICAL Motivation Learning Perception Beliefs & Attitudes THE BUYER FACTORS INFLUENCING CONSUMER BEHAVIOR Figure: Factors affecting consumer behavior
CULTURE Culture in different region within Bangladesh is shaped by unique characteristics. People talk mostly in Bengali but the accent is somewhat different. Moreover, English is becoming a second language for Bangladeshi people. The Religion is predominantly Islam but there are Hindus, Buddhist and Christians living all over the country. There are many tribes in hill tracts of Bangladesh. They have their unique language and starting to get educated.
CULTURE • The culture is very open towards change. • There are mainly two social classes – Higher and Lower. But sometimes we also consider Middle class too. • The respect towards elderly people is very high.
POLITICAL PHILOSOPHY (Democratic) RELIGION (Predominantly Islam) SOCIAL STRUCTURE (Collectivist) CULTURAL NORMS & VALUE SYSTEMS ECONOMIC PHILOSOPHY (Free market but protectionism exists) LANGUAGE (Bengali but English is used as secondary language) EDUCATION (Quality of education is low in rural areas; Quality differs in other cities in relation to Dhaka; literacy rate low) CULTURE Figure XXX: Summary of our culture
Social • The family and friends plays a big role in individual decision-making. • The literacy rate is very low. • Crime rate is very high and in corruption Bangladesh is the leader. • Most of the families are extended type and prefers sharing things.
PERSONAL • Most of the people are in 20 – 40 age-bracket. • Agricultural based occupation still dominates. • Industrial contribution towards GDP is increasing • Attitudes towards watching movies and seeing television by the teenagers are seen negatively.
PSYCHOLOGICAL • Learning curve is a bit slow, since most part of the population is illiterate. • In the rural areas blind faith towards materials does exist because of the illiteracy.
SIEMEN’S AVERAGE ANNUAL INCOME, EXPENSE, PROFIT, GROWTH FOR LAST FIVE YEARS 2003 TO 2007 INCOME AVG PROFIT AVG YEARS AVG EXPENSE GROWTH 6 2003 1 450000 200000 28 35.7143 11 250000 2004 1 12 10.7143 13 8 475000 400000 75000 2005 700000 18 1 110000 12 15.7143 590000 19 25 800000 200000 2006 1000000 26 22 28.5714 1 2007 1 33 240000 27 34.2857 1240000 32 1000000 5 20 18.87675 TOTAL 3865000 2990000 875000 20 20 TOTFAL CAPITAL INVESTED BY SIEMENSIS TK 7,00,000/= IN YEAR 2002 TAKEN AS BASE YEAR
VARIABLES COVERED FOR SIEMENS • Income • Expenses • Profit • Growth
VARIABLES COVERED FOR SIEMENS Table: SIEMEN’S Growth Rate, Income, Expense Profit from(2003-2007)
INDUSTRY LIFE CYCLE • Before discussing in which the industry is in we have to see some variables that affect the industry life cycle. Let’s see the following figure to get an idea in which stage the cell phone industry lies. (The data’s for the following table has been collected from the mobile vendors of Eastern Plaza)
INDUSTRY LIFE CYCLE • Table: Bangladesh cell phone industries growth rate and new product launch
INDUSTRY LIFE CYCLE • As we can see that the growth rate has been much higher in 2002 and 2003 than 2001, my analysis shows that the industry is in the growth stage. Moreover, as people are frequently changing their sets to get them used to with the new technologies and opportunities that the manufacturers are bringing to them, the industry can be found in the growth stage. The new products are helping the industry to remain in the growth stage. So, we can conclude that there are enough customers for each and every manufacturer to increase their sales and the industry is in growth stage.
INDUSTRY LIFE CYCLE BD CELL PHONE INDUSTRY Shakeout Maturity Introductory Growth Decline
SWOT ANALYSIS • STRENGTHS • WEAKNESS • OPPORTUNITIES • THREATS
STRENGTHS • Wide product range. • Strong local presence. • Favorable Brand Image. • Comprehensive Knowledge of the local market and client. • Good quality and top quality of products with solutions. • Made in Germany and standard is maintained by them. • Using advanced high tech technology. • Because of long-term experience, customers reliability and loyalty. • Efficient after sales service.
WEAKNESSES • Lack of brand awareness. • Highest tax on home appliances ness. • Lack of consistency in promotional activities • Less competitive price; competitor sourcing product at cheaper price • High turnover rate of top officials. • Less organized distribution. • Less compliance to market demand. • Parts are not always available. • Limited Showroom.
OPPORTUNITIES The major three sources of barriers to new entry are to gain: Brand loyalty, absolute cost advantage, economy of scale and government regulation. Among those, Siemens Bangladesh Limited has the brand loyalty because it has gained its experience in this field for more than 150 years worldwide, as well as its presence in Bangladesh since 1956. Besides, it created brand loyalty through continues advertising of the brand, company names, patent protection products, product innovation, and emphasized on high product quality and good after sales service. Siemens enjoyed regulatory protection, as Bangladesh Government is one of their prime customers of their power plants projects for along period. Thus, Siemens can eliminate the risk of entry by potential competitors with brand loyalty.
OPPORTUNITIES • Ever rising telecomm industry. • Emerging markets for Apartment consumers and high raise building. • Urbanization and electrification of the country. • BTTB entering the wireless service industry. • Consumer preference on authorizes and purchasing at one stop. • High demand in communication and low penetration in the sector; investment forecast is around 1 billion US $ by public and private sector for the next 5 years. • Tax on mobile phones might be removed. Infact, it has been from TK.3000 to TK. 1500.
