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ROGERS Telecommunications

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by

MJ Bisson

on 3 December 2013

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Transcript of ROGERS Telecommunications

Problem Statement
Given that the telecommunications industry in Canada has intensified, what strategic direction should Rogers take in order to continue growth?
Porter's 5 Forces
Recommendation ?
Alternative 1
Global Plan
(Corporate Level Strategy)
Tangible Resources
Thank You :)
Technological Segment
Environment Segments
Technology advancements
Popularity of smartphones require high-speed mobile data networks
Investments in upcoming wireless technology (LTE A and VOIP)
Continuously invest in R&D
Political / Legal Segment
Involvement of the Canadian Government
Telecommunications Industry
UNATTRACTIVE
Threat of New Entrants
LOW

Why?
High cost of capital to set-up wireless network
Large investment to cover Canadian territory
Restrictions due to the Federal Legislation
Expensive switching costs
Bargaining Power of Suppliers
HIGH

Suppliers = Handset Manufacturers

Why?
Popularity (Ex. Iphone or Galaxy)
High demand of handset products


Bargaining Power
of Buyers
LOW

Why?
Locked into a contract
Hold power if they threaten to leave Rogers for another company
Bundling with other services
Threat of Substitute Products
LOW
Why?
Alternatives consist of
Landlines (Significantly decreasing)
Tablets
Super-WIFI

No perfect substitute for Smartphones
Competitive Rivalry
MODERATE

Why?
Unofficial environment of collusion
Wireless plans are the most expensive in the world
Canadian companies lag behind the rest of the world
450 company owned
3,600 independent dealer/retail locations
Rogers Centre
Rogers arena

Physical Resources
Earns revenue from 3 main business segments
1) Wireless
2) Cable
3) Media

2005 Net Income (45Million)
2009 Net Income (1,478 Million)

Financial Resources
Rogers’ networks are one of the most advanced in the world
One of Rogers’ most significant technological resources is their wireless networks
Rogers’ operates on GSM as well as HSPA

Technological Resources
Intangible Resources
Reputational

Brand name
Worth 2.3 billion
2nd most valuable telecommunications brand in Canada
8th most valuable Canadian brand

Innovation Resources
Innovators
First movers
Edward Rogers

MARKETING
R&D
Rogers' Capabilities
Ranked within the top 10 largest advertisers in Canada
CITYTV networks
OMNI TV stations
54 radio stations
Magazines and professional publications
Large investment into R&D
Invested 1.9 billion in capital expenditure in 2009 in order to assure that they are coming up with the latest ideas in their respective industry.
Wireless Network

Wireless network operates on a global system for mobile communication (GSM)

Only telecommunications company in Canada that uses this technology

Cell phones from international travelers automatically roamed to the Rogers’ wireless network

Distinct network advantage over its competitors
Wireline Network
Operates TV, internet and landline telephone services as a singular wireline network

Huge cost advantage

Bell uses multiple wirelines for the services it provides

Innovation
Rogers Core
Competencies
1. Technology
Wireless Network
Wireline Network


2. Innovation
Innovation began with its founder, Edward “Ted” S. Rogers

Resource to the company prior to his death

Innovation and a drive to be a first-mover to develop creative technology still holds true today


VRIN Framework

Wireless Customer Service Ratings

Rogers Value Chain Analysis
DISTRIBUTION
MARKETING
OPERATIONS
VALUE CHAIN ANALYSIS
Rogers' Strategies
Business Level Strategies
Cost Leadership

Corporate Level Strategies
Moderate to high level of diversification
Related-Linked Diversification

Strengths
Weaknesses
1.
Present in all sectors
(Ex. Wireless, TV, Internet, Landlines)

2.
1st to establish GSM network

3.
Single wireline across Canada

4.
Customer service centres are located throughout Canada

1.
Focused on the Ontario and Atlantic locations only

2.
Dissatisfaction in customer service

3.
Low landline presence
(5% Market Share)

4.
No global presence

Alternatives
Alternative 1
Global Plan (Corporate-Level Strategy)
To merge with carriers in major cities and countries (Vodafone, China Mobile, Singtel, AT&T, Verizon)
Cons
Pros
Pros & Cons of Strategy
Cost effective
Fairly easy to implement
First mover advantage
Gain market share
Gain competitive advantage
Clients locked-in with another provider
Reluctance & skepticism of doing business
The need to gain clients early before competitors offer the same product

Alternative 2
Increase Coverage (Business-Level Strategy)
To build more cell-phone towers to increase the products service quality
Cons
Pros
Pros & Cons of Strategy
Clients would gain stronger cell phone service
Attractive option for new customers
Gain market share
Compete with Bell and Telus' network range
Costly alternative
Long process of implementation
Difficult to compete with bell and Telus’ network range

Alternative 3
Include VOIP in Bundle (Business-Level Strategy)
Incorporating VOIP into Rogers existing bundles
Cons
Pros
Pros & Cons of Strategy
Would entice customers
Would eliminate tacky landline telephones
Cost effective for customers
Cheap to implement due to the technology that is already implemented
Reluctance & skepticism of clients
Companies may not want to switch (Rather old fashioned way)
Timely for companies to implement (Assure that everyone is comfortable with the new system)

Justifications
Why?
Advantages associated with alternative
Rogers = 1st Mover advantage
Low-cost
AT&T has done it already

2016

2017

2019
2018
2015

2014

Year 1 - Acquire AT&T & Verizon
Year 2 - Acquire Vodaphone
Years 3 to 5 - Acquire Singtel & China Mobile
Implementation Schedule
Implementation Plan
Step 1

Set-up meetings with various telecommunications companies
Communicate the benefits from this collaboration
Resources already in place

Step 2
Develop and implement advertising campaign
About Rogers
Founded by Edwards "Ted" Rogers in 1960
Known for its wide variety of services
First introduced Rogers as a Radio company
Opportunities
Threats
Wireless
1. No competitive international roaming plan
2. Large market to capture in Eastern Asia

Wireline
3. VOIP technology



Wireless
1. CRTC wanting to bring 4th player
2. Bell & Telus' strategic alliance

Wireline
3. Emergence of new technology
4. Shifts in Consumer preference
Rogers Current Coverage
Bell & Telus Coverage
Vodafone
China Mobile
Singtel
AT&T
Strategic Alliance
Wireless National Competitors
Wireless Regional Competitors
Wireline National Competitors
Wireline Regional Competitors
Thank You :)
Industry Success Factors
1. R&D
2. Good Access to Financial Capital
Full transcript