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Staging, Arena, Vehicle, Economic Logic and Differentiator presentation on StarHub

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  • StarHub LtdSAVED PresentationBUS317D Strategic Management

  • OverviewBackground of CompanyChallenges / Problems FacedDirectional StrategyGrowth Strategies OptionDefensive StrategyPortfolio StrategyS.A.V.E.DStrategy StatementConclusion

  • Background ofEstablished in 1998, StarHub owned a new generation, integrated broadband information-communications network that is principally fibre-based which gave them the ability to provide a range of telecommunication services, including mobile, fixed-line and internet (formally known as Cyberway) to both residential and corporate markets. Back then, only Singapore Cable Vision (SCV) provided cable television and cable modem services, because of the extensive broadband network construction that was completed in 2000. It was back then a new technology, and SCV has plans to introduce cable telephony to compete with the players then. After final considerations by StarHubs shareholders in 2001, StarHub eventually bought SCV for a hefty sum of S$74 million from Singapore Press Holdings (SPH) and this gave StarHub the ability to include cable services in their portfolio.

  • TodayOwns island-wide Hybrid Fibre-Coxial network that delivers multi-channel pay TV services

    Mobile network : provides 4G, 3G and 2G servicesBroadband services for both residential and businesses.Fixed voice services for the home and office

  • Tight competition: Rivals Singtel and M1 who offer similar services to same targeted customersShared wireless coverage: M1, Singtel and Starhub are available all across SingaporeThe need to increase market shareNeed to retain/hire workers that enjoy working for you and enjoy being a customer ofThe need to develop new areas of opportunity to increase competitivenessTo build consumers confidence !

    Challenges / Problems Faced

  • Directional Strategy

  • Concerned with the firms orientation towards growth3 OptionsGrowth StrategiesStability StrategyRetrenchment StrategyDirectional Strategy

  • Directional Strategy

    Sheet1

    Decision 1Decision 2Decision 3

    Internal or ExternalConcentrationSame industry value chainVertical

    Horizontal

    ConcentricRelated Industry Value Chain

    ConglomerateUnrelated industry value chain

    Sheet2

    Sheet3

  • Defensive StrategyDefensive Strategy Focus primarily on customer retention and optimize position in market share

    Offensive StrategyExpand market to become global player to achieve thegreater profit

  • Defensive StrategyStarHub Reward PointsStarHub Reward Points are issued to all active StarHub consumers upon successful payment of their StarHub charges & payments.

    StarHub can expands its customer loyalty programme in collaboration with Caltex (Thanks! Rewards Program)

    Caltex Thanks! CardEarn 1 Thanks! Point per Litre pump

    Earn 10 Thanks! Points per StarHub monthly billEarn 10 StarHub Reward Points per Litre Pump

  • Portfolio Strategy

    ServicesMobilePay TVBroadbandFixed NetworkTotalMarket Shares28%78%17%5%Growth Rate2.8%-7.9%-1.2%2.3%Segment Value ($m)1,123.93122.56362.941,800.00Contribution56.00%17.01%10.98%16.01%Market Revenue$314.70$95.60$61.70$90.00$562.00

  • Portfolio StrategySTARS (NIL)High Market Share & High Market GrowthWell-established, and these are fantastic opportunities

  • CASH COWS (Pay Tv)High Market Share & Low Market GrowthWell-established. However, the market isnt growing and your opportunities are limited

    Portfolio Strategy

    ServicesPay TVMarket Shares78%Growth Rate-7.90%Segment Value ($m)122.56Contribution17.01%Market Revenue$95.60

  • Portfolio StrategyDOGS (Broadband)Low Market Share & Low Market GrowthMarket presence is weak. Its going to be difficult to make a profit.

    ServicesBroadbandMarket Shares17%Growth Rate-1.20%Segment Value ($m)362.94Contribution10.98%Market Revenue$61.70

  • Portfolio StrategyQUESTION MARKS (Mobile & Fixed Network)Low Market Share & High Market GrowthOpportunities that no one knows what to do with. Require serious thought as to whether increased investment.

    ServicesMobileFixed NetworkMarket Shares28%5%Growth Rate2.80%2.30%Segment Value ($m)1,123.931,800.00Contribution56.00%16.01%Market Revenue$314.70 $90.00

  • StagingRetain and increase PAYTV market share; Increase market share of Broadband, Mobile & Fixed networkStage 1: Invest to improve products and servicesStage 2: Invest in advertising and brand-buildingStage 3: Invest in Customer Retention Programs

    ArenasOffering a full range of information, communications and entertainment services for both consumer and corporate info-communication markets in Singapore

    VehicleOrganic, Internal development of info-communication products and services

    Portfolio Strategy - SAVED

  • Economic LogicPremium pricing and Preferred PAYTV service provider statusCompetitive pricing for other info-communication products / services (Broadband, Mobile & Fixed Network)

    DifferentiatorReliable products & services; Attractive & Competitive prices; Excellent customer care services; Attractive rewards system

    Portfolio Strategy - SAVED

  • To grow and become the top and best local info-communication service provider in the next 5 years by providing expanded professional services together with excellent work ethics to cater both consumers and corporate customers needs. (35 Words)StarHubs Strategy Statement

  • Summary & ConclusionBackground of StarHubChallenges / Problems StarHub faced3 StrategiesDirectional - Growth Strategies OptionDefensivePortfolio (S.A.V.E.D)Starting point of analysis, not the end pointFocus on the process by asking the right questions

  • Summary & ConclusionPortfolio Strategy (BCG Matrix)STARS (NIL)CASH COWS (Pay Tv)DOGS (Broadband)QUESTION MARKS (Mobile & Fixed Network)StarHubs Strategy StatementObjective : Begins with a definition / goal of the end that strategy is designed to achieved and is measurableScope : Where company will operate and who is the target audienceAdvantage : What StarHub do differently from its competitors to achieve their objective

  • *Corporate StrategyChoice of direction for company as a whole

    Concerned with 2 key questionsWhat business Starhub should be in? (Broadband, TV, Mobile, Land lines)How the firm should manage its group of businesses?

    *Starhub has customers island wide and is an already well-established corporation which should focus on its growth strategies.99.9999999% of people in Singapore know what Starhub is.But they do know Singtel and M1 as well.*Refer to the problems faced.

    Concentration Vertical Integrating forwards or backwards on the same industry value chainReasonsReduce power of suppliers/buyersMaintain a channel to buyerAccess to raw materialsBuy routers suppliers, TVs, etc. (Ability to have power over Singtel/M1 since they also provide the same services)

    Concentration HorizontalMore products within the industry to same market or same product in different (usually geographic) marketsOn-site servicing for technical issues is an example.

    Concentric GrowthGrowth via related industriesMobile solution management, Cloud hosting for corporates, etc.

    Conglomerate DiversificationGrowth in unrelated industriesUnattractive current industryLack of product skills to transfer to other related industries-Not recommended to consider at this moment.

    *One of the suitable strategy for StarHub was defensive strategic market plan to optimize position. (Offensive strategy is to expand market to become global player to achieve greater profits)

    A maximize profits strategy was to sacrifice volume, share, and sales revenues, as well as reductions in marketing expenses and focus primarily on customer retention.A reduced-focus market strategy is to narrowly allocate its resources to better defend a desired share position and focus on their existing customer in order optimize profits.StarHub should focus on how to make their existing customers loyal and satisfied by giving appreciation for those customers who are actually loyal to StarHub.

    (http://kasusmanajemen.wordpress.com/2010/12/29/hyundaicard%E2%80%99s-marketing-strategy/)*StarHub Reward Points

    All active consumer customers of StarHub Post-paid Mobile, StarHub TV, MaxOnline, Digital Voice and StarHub IDD services are eligible for the programme.All eligible customers will automatically receive points upon successful payment of their StarHub charges. For every $1 paid, you will receive 1 StarHub Rewards Monthly Point. Points are issued based on payment received

    (http://www.starhub.com/support/general/rewards/rewardsfaqs/rewardspoints.html)

    StarHub can expands its customer loyalty programme in collaboration with Caltex (Thanks! Rewards Programme) Caltex Thanks! Card

    Earn 1 Thanks! point per Litre pump

    40 Thanks! point = $1 off Petrol, Diesel or StarMart bill220 Thanks! point = free car wash at Caltex

    Earn 10 Thanks! Point per StarHub monthly billEarn 10 StarHub Reward Points per Litre Pump

    (http://www.caltex.com/sg/products-and-services/thanks-rewards-programme/)(http://www.starhub.com/content/corporate/newsroom/2013/02/starhub-expands-its-customer-loyalty-programme-in-collaboration-.html)

    *References

    Singapore Business Review. (2013, August 26). Starhub loses to Singtel on pay-TV race. Retrieved October 26, 2013, from http://sbr.com.sg/telecom-internet/news/starhub-loses-6-its-pay-tv-customers-singtel

    Singapore NBN. (2013). Me, my kids and Singapore NBN... Singapore: Nomura Equity Research.

    StarHub. (2012). Annual Report 2012. Singapore: StarHub.

    StarHub. (2013). StarHub. Retrieved October 26, 2013, from