SWOT Analysis of Grameenphone

The SWOT Analysis of Grameenphone Bangladesh is also called the internal and external strategic analysis. It has been developed to show the strengths & weakness of, and opportunities & threats for Grameenphone Telecommunication.

Grameenphone [GP] is the leading telecommunications company in Bangladesh. As of January 2016, it gained more than 56 million subscribers in Bangladesh. As a result, Grameenphone became the largest mobile phone operator in Bangladesh. It is a joint venture company (Telenor and Grameen Telecom Corporation). GP received the license for mobile phone operation in Bangladesh from the Ministry of Posts and Telecommunications on November 28, 1996. It started operations on March 26, 1997. The Telenor owns a 55.8% ownership of Grameenphone and Grameen Telecom holds 34.2% ownership of the company. Test 10% is publicly held.

Grameenphone was the first company to introduce GSM & 3G technology in Bangladesh, and built the first cellular network to cover 99% of the country.

 

SWOT Analysis of Grameenphone

Strengths

Market Leader: It is the market leader in the telecommunication industry in Bangladesh.

Collaboration with Apple and Samsung: It sells smart phones of different recognized brands including apple (iphones) and Samsung (Galaxy). These phones are offered with different packages. Users can buy these smart phones paying the price at installment. This strategy gives Grameenphone extra advantages to reach and sell their connections to the upper society of the country.

Introduction of latest Technologies: It has always been the first mover to introduce latest technologies among all the private telecommunication companies of Bangladesh.

Network Availability: Grameenphone has the largest network coverage. It has a large number of BTS station all over Bangladesh. That is why the company can provide better connectivity with excellent clear networking system in most of the areas of Bangladesh. Among all, GP introduced 3G networking service second after the Teletalk (the government owned Telecom Company).

Brand Value: Grameenphone is well known all over the country because of its strong network which developed the strongest brand image in the country. This brand recognition symbolizes the strongest business activities.

Revenue: Because of effective strategic planning, quality service, and networking coverage Grameenphone has been able to earn a strong revenue growth which gave them financial soundness.

Skilled Human Resources: Most of the stuff of Grameenphone are highly skilled and efficient in many ways in their job responsibilities. The reason behind this responsible manner is the Human Resource Department of Grameenphone which follows ethical strategy to recruit and manage employees.

Effective Support Organization: GP has taken this idea from the employees of Bangladesh Railway and Grameen Bank who are experienced and capable of providing precious and effective guidelines for the operations.

Easiest Access to the Widest Rural Network: Grameenphone has been dedicated to set up a strong network through the widest rural area across the country to provide the utmost service to the people of the country.

High Ethical Standards: To ensure quality of services, Grameenphone has been very strict to follow its ethical standards.

 

WEAKNESS

Cultural Gap: In management body of Grameenphone, employees from different countries and cultures exist. The Chief Executive Officer and Chief Technical Officer are Indian and many employees come from different countries around the world. Because this reason, there may sometimes be lack of understanding due to cultural gap. Also, they might not realize understand the future goals of the company.

Different Mind: Sometimes, idea variety creates problem. In Grameenphone, it is highly encouraged to innovate and apply new strategy for providing better service. Sometimes, it could create problem because employees are used to with previous strategy.

Complicated Pricing Structure: Grameenphone has lots of service packages. The pricing of these packages and their billing policies are different. These are difficult to promote and hard for the users to understand.

Technical Problems with Offered Packages: Almost all of the new offers from Grameenphone are having some technical problems and users are experiencing those problems. Either they are not working at all or part of the services of those offers is disabled. The Grameenphone is not aware of those problems. They are delaying to give a solution to these problems. As a result, it is increasing customer dissatisfactions.

Opportunity

Economic Growth of Bangladesh: The economic growth of the country will increase the expansion of telecommunication industry from 2016 to 2018; there is a huge chance in the telecommunication sector.

Increased Intentional Activities in Bangladesh: As Bangladesh has been experience FDI and many foreigners are working here, the international activities have increased in the country. They need to be connected not only within the country, but also outside of the country. So, the market is also expanding globally.

Declining Prices for Handsets: In the past, people of low income had low access to the mobile phone services due to the high price of handsets. When the Chinese mobile industry enters the market, the flood of cheap handsets with latest technology started. Now anybody can buy and maintain handsets as the telecom service price is also at the decrease.

New International Gateway: As BTTB ‘s new gateway of international connection made it easy for the telecom companies to provide services of ISD call and international roaming.

Flexibility of Mobile Phone: Mobile phones became more dynamic today. These modern handsets are being used as an alternative to many devices such as music, video, camera, laptop etc. Communication through mobile phone became popular. The land phone connection is pretty costly also. Smartphones are also easier to carry because of the portability, people are getting more dependent on mobile phones than land phones. So, there is a strong probability achieving more sales of connections.

Political Instability: Though political stability brings negative impact to most of the businesses, but in the case of telecommunication industry it is an opposite case for short period of time.

Threats

Maturity Stage of Industry Life Cycle: The telecommunication industry is in the maturity phase. The basic characteristics of this phase are that the profit stops to grow as because the existing companies already grabbed all the market shares, and there is nothing left. So, the net income stops growing further.

Intense Competition: In the mature level of industry life cycle, the competition is intense. In our country, the competition in the telecommunication industry is intense as well.

More Rigid Government Regulations: Government is becoming more strict of companies are taking away currency from the country. So, foreign companies are being threatened because they may have barrier to back their investment and profit to their country. The government also made the rules stricter for the foreign employee to work here.

Upgraded Technology Used by Competitors: New mobile phone operators are establishing their channel with latest technology. The competitors are gaining more strength. Whereas Grameenphone is using the station that is five almost dilapidated. So, it is a disadvantage for Grameenphone.

Devaluation of Taka: As the investment comes from the overseas and profit goes to the home country, there is a risk of currency depreciation which may reduce the profit.

Price War: Finally, the price war is the biggest threat for the company for its profit. As the competition is intense, the competitors are offering new packages frequently which are decreasing the prices of the services as well. There is a direct negative effect to the profit margin of Grameenphone. Recently, it has been the primary concern for any mobile operator in the market. To remain competitive, they must reduce the price of their offered products.


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faizul

Sheikh Faizul Haque, the founder of GotAbout, graduated from North South University, Bangladesh. His major was Finance and Accounting. Faizul has been writing in business blogs since 2013, also has a strong interest in Behavioral Finance, Risk Management, and Portfolio Management.