Strategic Alliance
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Sirinan Saeueng 4880366 Sirot Sawangsawai 4880394 Bhuk Kranantawat 4880487 Waraporn Chianwatanasuk 4880605 Tanai Te - PowerPoint PPT Presentation


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Strategic Alliance CP Orange Success or Failure. Sirinan Saeueng 4880366 Sirot Sawangsawai 4880394 Bhuk Kranantawat 4880487 Waraporn Chianwatanasuk 4880605 Tanai Techasmit 4980625. Have You Considered Orange?. Company Overview. Threat of New Entrance. Bargaining Power

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Strategic Alliance

CP Orange

Success or Failure

Sirinan Saeueng 4880366

SirotSawangsawai 4880394

BhukKranantawat4880487

WarapornChianwatanasuk 4880605

TanaiTechasmit4980625




Threat of

New Entrance

Bargaining Power

Of Suppliers

  • Moderate

  • PCT

  • Fixed line

  • Moderate

  • High Investment

  • Growing market

  • Only 2 players

  • Moderate

  • Fragmented & small

  • Only 2 buyers: DTAC & AIS

Threat of Substitute

Industry Profitability

Moderate

Bargaining Power

of Customers

Intensity of Industry Rivalry

  • Low

  • Only 2 choices: DTAC & AIS

  • In learning stage: high switching cost

  • High

  • AIS : FMA

  • DTAC : Strong promotion

Industry Analysis


Strength

Weakness

Competitive Analysis


  • Reputation of CP helps capture local market

  • Market knowledge and base from CP telecommunication service such as PCT.

  • Qualified and skilled employee and training and developing program.

  • Strong financial support.

  • Brand recognition

  • Loss of first mover advantage

  • Conflict of decision making process from culture differences

Weakness

Strength

Opportunity

Threat

  • Increase the market share as Thai market is in the growth stage.

  • Move to other types of related business such as interest and so on

  • Economical instability

  • Political instability

  • Uncertainty of the government policy

  • New comers as the market was expanding very quickly

SWOT Analysis


Motive

Orange: Pursue growth strategy by using market penetration  Asia was potential

- Thailand as fastest growing with infrastructures: no market knowledge

CP: See potential market growth by diversification from PCT and fixed line to wireless

- Looking for: capital investment, service knowledge & experience in wireless and technology development

There is a strategic fit between both parties: MARKET EXPANSION

Orange: capital investment & service excellence, CP :customer base & knowledge of market

Partner Overview


  • CP Orange broke the old ways of marketing strategies like cutting price to...

  • Delivered personalized and extra services to its customers such as

  • - SMS in Thai language

  • Pre-paid and post-paid service

  • Service to customers from other networks

  • Allowed customers to choose their own telephone numbers

  • Work with Alcatel to bring in GPRS technology to Thailand

  • Work with Rockwell customer contact center for customers feedback collection and service improvement

Vision

“To create a pioneering, wire free future where people can communicate wherever, whenever, and however they wish.”

Mission

“To become Thailand’s premier communication company: first for service, first for quality, first for innovation, and first choice for customers.”

CP Orange Purpose


Market-based alliance cutting price to... geographical-based joint venture

  • CP Orange Organizational Structure:

  • Orange SA  49%

  • TA  41%

  • CP  10%

  • CP Orange Organizational Management:

  • Orange SA  Mr. Hans Snook, the founder of Orange as the chairman

  • TA  Mr. SupachaiChearavanont, the president of TA as CEO

  • Daily management decision making: CEO

  • Special management decision making: Both CEO and Chairman

  • CP Orange Organizational Development:

  • 2000: Signing of the joint venture agreement

  • 2002: Launch of the joint venture and service

  • 2003: 1.6 million users, 8% of market share

  • 2004: 1.9 million users, CP bought 39% share from Orange

Type & Structure


  • Alliance Significance: cutting price to...

  • Diversification of business and capture of mobile phone market from CP

  • Large capital investment and gain of market from Orange

  • With the alliance, change of mobile phone market in terms of prices and services

  • Key Success Factors:

  • Exchange of knowledge, information, resources and benefits

  • Strategic fit

  • Governing mechanism

  • Opportunity for improvement for both companies

  • The Result of the Alliance:

  • Alliance failed due to the unfitted strategy

  • - Orange SA changed to focus on cost saving management and investment reduction

  • - CP still focused on expanding the investment in Thai market to respond to the fast growing telecommunication market

Significance & Success Factors


  • Problem Identification: cutting price to...

  • Financial funding from Orange SA was declining

  • Telecom Asia wanted to move & to expand faster (a conflicting strategic fit)

  • Orange SA stopped funding and pulled out of the joint venture

  • Problem Cause:

  • In 2002, European telecommunication market was in the downturn

  • The growth projection was overestimated

  • Orange SA was in debt

  • Funding to foreign market decreased over time

  • The Conflicting Strategic Fit:

  • While European market was facing problems, Thai market was booming

  • Under competitive pressure, Telecom Asia was obliged to expand

  • The lack of decision making power impeded this process

  • Pull the Plug:

  • Orange SA stopped all funding for expansion in Thai market

  • CP began to buy shares from Orange to gain more decision making power

  • The purchase raised CP’s shares to 83% from 44%

Problem Identification


What Do You Think About Orange? cutting price to...