ITU-D Regional Workshop on Strategic Management - Part 1 Cairo, Egypt 19 -22 December 2005

1. ITU-D Regional Workshop on Strategic Management-Part 1 Cairo, Egypt 19 -22 December 2005 Strategy Analysis Regional Workshop, Cairo- Egypt

2. CONTENT • Strategic Management Cycle • Strategy Analysis: What, Why, When and How? • Analysis Tool • Porter’s Model • The SWOT Analysis method • Analysing Trends • Lessons to Learn Regional Workshop, Cairo- Egypt

3. Strategy Implementation • Allocation of Resources • Establish Chain of Command • Assign Responsibilities • Manage the Process • Monitor, Eval., Adjustment Strategic Management Strategy Formulation • Strategy Analysis • Setting Objectives • Strategy/ Strategic Plan Regional Workshop, Cairo- Egypt

4. Strategy Analysis: What, When, Why & How? • What is Strategy Analysis? • In the broadest term: Do your homework to be able to craft a strategy. • Explore all (?) variables that influence the strategy • When? • All the time! Strategy is not a single exercise that’s done once • Why? • To develop a viable strategy that copes with the changing environment of the business and enables success • How? • Study internal and external factors • Use suitable methodologies and tools • Flexibility for unexpected changes • Think outside the box • Use own and external think tanks • Most likely scenarios • Careful of Trends Regional Workshop, Cairo- Egypt

5. Methods and Tools Proter’s Model Potential Entrants (Threat of) Suppliers (Bargaining Power of) Buyers (Bargaining Power of) Competitors (Rivalry) Substitutes(Threat of) Regional Workshop, Cairo- Egypt

6. Methods and Tools (2) Porter’s Model Porter’s Five Forces model: • Outside-in business strategy tool • Used to make analysis of the attractiveness (value) of industry structure • 5 fundamental competitive forces: • Entry of competitors: How easy or difficult is it for new entrants to start competing, which barriers do exist • Threat of substitutes: How easy can a product or service be substituted, especially made cheaper • Bargaining power of buyers: How strong is the position of buyers • Bargaining power of suppliers: How strong is the position of sellers. Do many potential suppliers exist or only few potential suppliers, monopoly? • Rivalry among the existing players: Does a strong competition between the existing players exist? Is one player very dominant or are all equal in strength and size. Regional Workshop, Cairo- Egypt

7. Methods and Tools (2) Porter’s Model Porter’s Five Forces model: • Some times a 6th force I added: the government • Careful: not to underestimate the importance of the (existing) strengths of the organization (Inside-out strategy) • It provides useful input for performing a SWOT analysis. Regional Workshop, Cairo- Egypt

8. Methods and Tools (2) SWOT Analysis • The SWOT analysis is a good tool for analyzing Strengths, Weaknesses, Opportunities and Threats of a company • Strengths and weaknesses are: • Internal factors that create value or destroy value • They can include assets, skills, or resources that a company has at its disposal, compared to its competitors • They can be measured using internal assessments or external benchmarking. • Opportunities and threats are: • External factors that create value or destroy value • A company cannot control them • They emerge from either the competitive dynamics of the industry/market or from demographic, economic, political, technical, social, legal or cultural factors Regional Workshop, Cairo- Egypt

9. Methods and Tools (3) SWOT Analysis Regional Workshop, Cairo- Egypt

10. Example: Incumbent Telecom Operator SWOT Analysis Regional Workshop, Cairo- Egypt

11. Example: Incumbent Telecom Operator SWOT Analysis Regional Workshop, Cairo- Egypt

12. Example: Threat of loosing customers Regional Workshop, Cairo- Egypt

13. Analysing Trends Trends in Telecoms Market: • Convergence of services: Voice+video+data+internet+ • Wireless data: WiFi, Hot Spots, WiMAX, • Wide Band to the home, DSL, Cable TV • Mobile is booming: growth potential, new technologies (3G mobile), voice+video+data+internet+ • New network solutions: IP based-ivpn, NGN, last mile (fiber-to-the home) • Corporate customers dictating the market: e-business, e-government, e-health, e-education, e-sport, e e e Regional Workshop, Cairo- Egypt

14. Analysing Trends (2) Trends in Telecoms Market: • Content industry booming, powerful players: video, music,.. • Powerful terminal equipment manufacturers pushing the limit (mobile makers, PC makers, ..) • Giant software companies pushing: e.g online games • Electronic gadgets: Mobile does everything and more! • Digital age: “digital” kids a significant player Regional Workshop, Cairo- Egypt

15. Analysing Trends (3) Trends in Telecoms Market: • Everyone wants (needs) wide band • Tomorrows wideband is different from today’s • Your mobile reflects your social status! • What if the pace of change over the next decade is the same as of the past one? What if more? Regional Workshop, Cairo- Egypt

16. Analysing Trends (4) Factors of Change: • Complex ownership structures • M&A: no need to “kill” your competitor, by him, or sell yourself • Drastic fall of high capacity cost/price: cost structure change • Tariffs against distance • Globalisation • Customer is first: customer-driven vs product driven Regional Workshop, Cairo- Egypt

17. Lessons to Learn • Best strategies my fail miserably: GMPCS • Success my come from unexpected product/ activity- seize the moment: e.g iPod • Sense the change- rebalance priorities • You cannot defeat technology: call back, resale, VoIP, IM, Satellite TV, etc – better ride the wave • Exit Strategy Regional Workshop, Cairo- Egypt

18. Thank You Regional Workshop, Cairo- Egypt