Harvard Case - Turning Copper into Gold: Bharti Airtel's Fixed-Line Service in India
"Turning Copper into Gold: Bharti Airtel's Fixed-Line Service in India" Harvard business case study is written by Varadharajan Sridhar, Amit Malik. It deals with the challenges in the field of Service Management. The case study is 26 page(s) long and it was first published on : Nov 15, 2007
At Fern Fort University, we recommend that Bharti Airtel implement a multi-pronged strategy to transform its fixed-line service into a profitable and customer-centric offering. This strategy focuses on leveraging technology, enhancing customer experience, and optimizing operations to capture a larger share of the Indian fixed-line market.
2. Background
Bharti Airtel, a leading telecommunications company in India, faced a challenge with its fixed-line service. Despite a strong brand and established infrastructure, the service struggled to compete with the rapidly growing mobile market. Customer satisfaction was low, and the business was not generating a significant return on investment. The case study highlights the key challenges:
- Declining market share: The mobile phone boom had significantly eroded the fixed-line market, leading to declining revenue and customer base.
- Low customer satisfaction: Existing customers were dissatisfied with the service quality, slow internet speeds, and lack of innovative offerings.
- Inefficient operations: The fixed-line business was plagued by inefficiencies, leading to high operating costs and slow response times.
The main protagonists of the case study are Sunil Mittal, the Chairman and Managing Director of Bharti Airtel, and his team tasked with reviving the fixed-line business.
3. Analysis of the Case Study
This case study can be analyzed using the Porter's Five Forces framework:
- Threat of new entrants: The threat of new entrants is low due to the high capital investment required to build a fixed-line infrastructure.
- Bargaining power of buyers: The bargaining power of buyers is high due to the availability of multiple service providers and the increasing demand for value-added services.
- Bargaining power of suppliers: The bargaining power of suppliers is moderate, with limited suppliers of key components like network equipment.
- Threat of substitutes: The threat of substitutes is high due to the availability of mobile broadband and other internet connectivity options.
- Competitive rivalry: The competitive rivalry is intense, with multiple established players vying for market share.
SWOT Analysis can also be used to understand Bharti Airtel's position:
Strengths:
- Strong brand recognition and established customer base
- Extensive network infrastructure
- Experienced workforce
- Strong financial position
Weaknesses:
- Declining market share
- Low customer satisfaction
- Inefficient operations
- Lack of innovative offerings
Opportunities:
- Growing demand for high-speed internet
- Increasing adoption of digital services
- Potential for bundling services with mobile offerings
- Government initiatives to promote digital infrastructure
Threats:
- Competition from mobile broadband providers
- Technological advancements leading to new substitutes
- Economic slowdown impacting consumer spending
4. Recommendations
To transform its fixed-line service, Bharti Airtel should implement the following recommendations:
1. Enhance Customer Experience:
- Service Innovation: Introduce innovative service packages tailored to specific customer needs, including high-speed internet, bundled services with mobile offerings, and value-added features like entertainment streaming and online gaming.
- Customer Relationship Management (CRM): Implement a robust CRM system to track customer interactions, understand their needs, and provide personalized service.
- Service Quality: Invest in network upgrades to improve internet speed and reliability. Implement service level agreements (SLAs) to guarantee service quality and ensure timely resolution of customer issues.
- Customer Feedback Management: Actively solicit customer feedback through surveys, social media monitoring, and online reviews. Use this feedback to identify areas for improvement and address customer concerns.
2. Optimize Operations:
- Process Improvement: Implement lean management techniques to streamline operations, reduce waste, and improve efficiency.
- Technology and Analytics: Leverage data analytics to monitor service performance, identify bottlenecks, and optimize resource allocation.
- Supply Chain Management: Streamline supply chain processes to ensure timely procurement of equipment and materials.
- Employee Empowerment: Empower frontline employees to resolve customer issues and provide exceptional service. Implement employee incentives to motivate and reward high performance.
3. Leverage Technology:
- Fiber Optic Network: Invest in a fiber optic network to provide high-speed internet access to a wider customer base.
- Internet of Things (IoT): Explore opportunities to integrate IoT solutions into fixed-line services, such as smart home automation and remote monitoring.
- Cloud Computing: Leverage cloud computing to offer flexible and scalable services, including cloud storage, online backup, and remote access.
4. Marketing Strategy:
- Branding: Reposition the fixed-line service as a premium offering with a focus on high-speed internet, bundled services, and value-added features.
- Marketing Mix: Implement a targeted marketing strategy using a mix of traditional and digital channels to reach potential customers.
- Customer Loyalty Programs: Introduce loyalty programs to reward existing customers and encourage retention.
5. Organizational Change:
- Organizational Structure and Design: Reorganize the fixed-line business to create a more customer-centric structure with dedicated teams for service delivery, customer support, and product development.
- Organizational Culture: Foster a customer-centric culture that emphasizes service quality, innovation, and employee empowerment.
- Change Management: Implement a comprehensive change management program to ensure smooth implementation of the new strategy and address employee concerns.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with Bharti Airtel's core competencies in telecommunications and its mission to provide innovative and customer-centric services.
- External customers and internal clients: The recommendations aim to improve customer satisfaction and enhance the experience for internal clients, such as customer service representatives and technical staff.
- Competitors: The recommendations address the competitive landscape by focusing on service innovation, technology adoption, and customer experience.
- Attractiveness: The recommendations are expected to lead to increased revenue, improved profitability, and enhanced market share.
6. Conclusion
By implementing these recommendations, Bharti Airtel can transform its fixed-line service from a declining business to a profitable and customer-centric offering. This strategy will require a significant investment in technology, customer experience, and organizational change, but the potential rewards are significant. By leveraging its brand strength, existing infrastructure, and experienced workforce, Bharti Airtel can capture a larger share of the Indian fixed-line market and solidify its position as a leading telecommunications provider.
7. Discussion
Alternatives not selected:
- Divesting the fixed-line business: This option would have been a quick solution but would have resulted in lost revenue and market share.
- Maintaining the status quo: This option would have led to continued decline in customer satisfaction and market share.
Risks and key assumptions:
- Competition: The market is highly competitive, and new entrants or technological advancements could disrupt the market.
- Customer adoption: Customers may be hesitant to adopt new services or technologies.
- Economic conditions: An economic downturn could impact customer spending and demand for services.
Options Grid:
| Option | Benefits | Risks | Cost | Timeline |
|---|---|---|---|---|
| Enhance Customer Experience | Increased customer satisfaction, improved brand image, higher retention rates | Increased investment in customer service and technology | High | Medium-term |
| Optimize Operations | Reduced costs, improved efficiency, faster response times | Resistance to change, potential job losses | Moderate | Short-term |
| Leverage Technology | Improved service quality, new product offerings, competitive advantage | High investment costs, risk of technological obsolescence | High | Long-term |
| Marketing Strategy | Increased brand awareness, higher customer acquisition rates | Competition for marketing resources, potential for ineffective campaigns | Moderate | Short-term |
| Organizational Change | Improved organizational agility, enhanced customer focus | Resistance to change, potential for organizational disruption | Moderate | Medium-term |
8. Next Steps
- Phase 1 (Short-term): Implement immediate improvements to customer service and operational efficiency.
- Phase 2 (Medium-term): Invest in network upgrades and launch new service packages.
- Phase 3 (Long-term): Implement a comprehensive marketing strategy and continue to invest in technology and innovation.
By taking these steps, Bharti Airtel can turn its copper into gold, transforming its fixed-line service into a profitable and customer-centric offering.
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Case Description
Basic telecommunication services in India, provided by the government as a natural monopoly service, have over the years seen drastic changes in terms of competition, service offerings and technology used. This case highlights the technology, marketing and financial strategies adopted by Bharti Airtel, a leading private telecom service provider in India. While Bharti succeeded in carving a niche for itself in its fixed line service offering, the case brings out Bharti's need for agility as it confronts the competition of the cash-rich government operators and the strong emergence of mobile services and related technologies. The case can also be used to study India's evolving telecom regulations and the effects of migrating from a monopoly to a perfectly competitive basic telecom service in an emerging market. Government Monopoly, Business Strategy, Telecom Services, Fixed Line Services, Telecom regulations, Market penetration
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