StarHub LtdSAVED Presentation

BUS317DStrategic Management

Overview1. Background of Company

2. Challenges / Problems Faced

3. Directional Strategy• Growth Strategies Option

4. Defensive Strategy

5. Portfolio Strategy• S.A.V.E.D

6. Strategy Statement

7. Conclusion

Background of

Established in 1998, StarHub owned a new generation, integratedbroadband 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 StarHub’s 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.

Today

• Owns island-wide Hybrid Fibre-Coxial networkthat delivers multi-channel pay TV services

Mobile network : provides 4G, 3G and 2G services

Broadband 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 customers

• Shared wireless coverage: M1, Singtel and Starhub are available all across Singapore

• The need to increase market share• Need to retain/hire workers that enjoy working for you and

enjoy being a customer of• The need to develop new areas of opportunity to increase

competitiveness• To build consumer’s confidence !

Challenges / Problems Faced

Directional Strategy

MissionAnd

objectives

Portfolio strategy

Parentingstrategy

Directionalstrategy

• Concerned with the firm’s orientation towards growth

• 3 Options– Growth Strategies– Stability Strategy– Retrenchment Strategy

Directional Strategy

Decision 1 Decision 2 Decision 3VerticalHorizontal

ConcentricRelated Industry Value Chain

ConglomerateUnrelated industry value chain

Same industry value chain

Inte

rnal

or E

xter

nal

Concentration

Directional Strategy

Defensive Strategy• Defensive Strategy

Focus primarily on

customer retention and

optimize position in market share

• Offensive Strategy Expand market to become

global player to achieve the

greater profit

Defensive Strategy• StarHub Reward Points

StarHub 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! Card Earn 1 Thanks! Point per Litre pump

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

Portfolio Strategy

Services Mobile Pay TV Broadband Fixed Network TotalMarket Shares 28% 78% 17% 5%Growth Rate 2.8% -7.9% -1.2% 2.3%Segment Value ($m) 1,123.93 122.56 362.94 1,800.00Contribution 56.00% 17.01% 10.98% 16.01%Market Revenue $314.70 $95.60 $61.70 $90.00 $562.00

Portfolio Strategy

• STARS (NIL)

• High Market Share & High Market Growth

• Well-established, and these are fantastic opportunities

• CASH COWS (Pay Tv)– High Market Share & Low Market Growth– Well-established. However, the market isn’t

growing and your opportunities are limited

Portfolio Strategy

Services Pay TV

Market Shares 78%

Growth Rate -7.90%

Segment Value ($m) 122.56

Contribution 17.01%

Market Revenue $95.60

Portfolio Strategy

• DOGS (Broadband)– Low Market Share & Low Market Growth– Market presence is weak. It’s going to be

difficult to make a profit.

Services Broadband

Market Shares 17%

Growth Rate -1.20%

Segment Value ($m) 362.94

Contribution 10.98%

Market Revenue $61.70

Portfolio Strategy

• QUESTION MARKS (Mobile & Fixed Network)– Low Market Share & High Market Growth– Opportunities that no one knows what to do with. – Require serious thought as to whether increased

investment.

Services Mobile Fixed Network

Market Shares 28% 5%

Growth Rate 2.80% 2.30%

Segment Value ($m) 1,123.93 1,800.00

Contribution 56.00% 16.01%

Market Revenue $314.70 $90.00

Staging• Retain and increase PAYTV market share; Increase market share of Broadband,

Mobile & Fixed network

• Stage 1: Invest to improve products and services

• Stage 2: Invest in advertising and brand-building

• Stage 3: Invest in Customer Retention Programs

Arenas• Offering a full range of information, communications and entertainment services for

both consumer and corporate info-communication markets in Singapore

Vehicle• Organic, Internal development of info-communication products and services

Portfolio Strategy - SAVED

Economic Logic• Premium pricing and Preferred PAYTV service provider status

• Competitive pricing for other info-communication products / services (Broadband, Mobile & Fixed Network)

Differentiator• Reliable 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)

StarHub’s Strategy Statement

Summary & ConclusionBackground of StarHub

Challenges / Problems StarHub faced

3 Strategies

1. Directional - Growth Strategies Option

2. Defensive

3. Portfolio (S.A.V.E.D) Starting point of analysis, not the end point

Focus on the process by asking the right questions

Summary & Conclusion Portfolio Strategy (BCG Matrix)

• STARS (NIL)

• CASH COWS (Pay Tv)

• DOGS (Broadband)

• QUESTION MARKS (Mobile & Fixed Network)

StarHub’s Strategy Statement• Objective : Begins with a definition / goal of the end that strategy is designed to

achieved and is measurable

• Scope : Where company will operate and who is the target audience

• Advantage : What StarHub do differently from its competitors to achieve their

objective