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Aldi_02_09_15

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John Barlow

on 7 September 2015

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Transcript of Aldi_02_09_15

ALDI MOBILE BUSINESS CASE
INTRODUCTION
This is a summarised business case for launching Aldi Mobile in the UK and IRL; it aims to give an overview of the:
UK telecom market
other Aldi Mobile countries
acknowledge the challenges and give a recommendation for market entry.
How would we do it?
The proposed route to market would be via a partnership
with a third party aggregator to manage the relationship between Aldi and the chosen telecom provider
the management of the required infrastructure including the micro-site, call centres and on line marketing.
INTERNATIONAL REVIEW
Germany
launched Aldi Talk in December 2005 and have established themselves as a significant player in the Pay As You Go (PAYG) space with an offer that's centred around the customer 'topping up' in store.
In May 2015 they began a trial enabling customers to top up through a micro site hosted by Med ion with great success with over 10,000 customers using this service in the first week
with weekly transactions of over 27,500 in the last 4 weeks a clear trend is present (4 weeks up to 26.07 .15)
Australia
launched Aldi mobile in March 2013 with an offer focused on the customer 'topping up' on line with over 90% of transactions being accounting for through this channel since launch.
Whilst this is partly due to the store portfolio vs. the German business, indications suggest that the UK customer is more inclined to take this approach with
'virtual operators' such as Virgin Mobile, Giffgaff, Lyca Mobile and
Lebara Mobile all featuring in the PAYG top 1O list by customer numbers (source: LD Telegraph 26.05.15).
This would be a positive operationally reducing the impact on stores and enabling the contribution to go straight to the bottom line at minimal cost.
The table below gives insight into key metrics from Germany and Australia (as of the end of 2014).
METRIC
GERMANY (ALDI TALK)
AUSTRALIA (ALDI MOBILE)
SALES
€249,034,935
$54,273,193
NUMBER OF CUSTOMERS
10,513,145
322,575
CONTRIBUTION
€25, 177,432
$2,988,159
NP
10.15
/
o
o
5.51
/
o
o
MONTHLY REVENUE PER CUSTOMER
€3.94
$15.58
PAYG MARKET SHARE
24.32
/
o
o
3.90
/
o
o
Australias initial growth during 2013 exceeded expectations causing them to restructure their $35 unlimited plan which in turn caused YoY sales to decline from September 2014 to May 2015. Sales have slowly improved since their restructure with YoY growth expected to return in June 2015.
INTERNATIONAL TARIFF STRUCTURE
AUSTRALIA
GERMANY
€3.99
N0 FREE CALLS / TEXTS
150 MB DATA
SMALL
€6.99
500 MINS OR TEXTS
500 MB DATA
MEDIUM
€9.99
1500 MINS OR TEXTS
1.5 GB DATA
LARGE
FREE CALLS / TEXTS
(ALDI 2 ALDI)
€14.99
NO FREE CALS / TEXTS
5 GB DATA
INTERNET ONLY
UK MARKETING REVIEW
- On average UK inhabitants have 1.24 sim cards
active at one time
UK MARKET REVIEW
- Germany 1.30 and Australia 1.22
- The 2014 ratio of Pay As You Go (PAYG) to contract
tariffs is 41.50%/58.50%
- On average UK inhabitants have 1.24 sim cards
active at one time
UK MARKET REVIEW
- Germany 1.30 and Australia 1.22
- The 2014 ratio of Pay As You Go (PAYG) to contract
tariffs is 41.50%/58.50%
- £15.60 worth of credit per month
Currently there are four network operators that own spectrum infrastructure in the UK
- they include 02, EE, Vodafone and Three
- In recent years the market has seen a shift away from
texts towards mobile messaging (Whatsapp,
Facebook Messenger and Ping) and with that the focus
on data has increased; from 2013-2014 text usage
decreased by 25%.
- With reports emerging of BT and Sky entering the MVNO space a new strategy
of 'multi play' is evident where an MVNO is capable of bundling key elements as
part of a residential package; calls (fixed and mobile), data (fixed and mobile)
and TV.
- The planned consolidation of the UK market with the impending purchase
by BT of EE and Three's takeover of 02 has thrown into question the market
dynamics.
- This proposition has been cited as a 'sticky' mechanism that could reduce customer
churn as households linked to TV packages are seen as less transitional hence the
shifting is expected to reduce.
UK MARKETING REVIEW
UK MARKETING REVIEW
NETWORK OPERATORS MARKET SHARE
(No OF CUSTOMERS AS OF 31.03.15)
25%
35%
30%
10%
O2
EE
VODAFONE
THREE
MOBILE VIRTUAL
NETWORK OPERATOR (MVNO)
NETWORK HOST
No OF CUSTOMERS
(AS OF 31,03,15)
TESCO MOBILE
O2
4,500,000
ASDA MOBILE
EE
800,000
MOBILE BY SAINSBURY'S
VODAFONE
500,000
VIRGIN MOBILE
EE
4,500,000
LYCA MOBILE
EE
2,000,000
2,000,000
LEBARA MOBILE
VODAFONE
GIFFGAFF MOBILE
O2
1,400,000
TOTAL
15,700,000
YEAR 1 FORECAST =
£36m c.£2.1m
ups accounting for 90%
CHALLENGES
RESOURCE
DIGITAL GOVERNANCE
IT RESOURCE
OPERATIONAL IMPACT
CHALLENGES
MARKETING BUDGET
E-COMMERCE TIMINGS
DYNAMIC MARKET PLACE
OPERATIONAL IMPACT
RECOMMENDATION
Full transcript