According to the evolution ofstrategy the strategic management has diversified in to different levels whichcan run their organization.
Even though the spread of strategic management istaken place but Lorange is strongly states that there are mainly three types ofstrategies. They are Corporate Strategy, Business Strategy and FunctionalStrategy. (P.Logange 1980) If the organization divides the strategies intogroups then only the business will develop and will survive in the market for along time.
Corporate StrategyConsideringthe current performance, the Key Success Factors and the SWOT analysis the directionalstrategy alternatives would be as follows. Growth strategy to expand theactivities of Dialog Telekom further would be the first alternative. Since thecurrent product lines have real growth potential concentration of resources onthose would be ideal. In concentration Dialog Telekom can follow the verticalgrowth strategy to take the benefit of the value chain convergence opportunitythat is existing in Sri Lankan context. Stabilitystrategy to continue with current activities without any changes to thedirection would be the second alternative. Here Dialog Telekom can utilizepause/proceed with caution strategy to have only incremental improvements whilethe weaknesses stated are overcome. It can use this time to stabilize theorganization due to the changes took place due to multiple strategies itadopted earlier such as acquisitions and investing on innovative developments,which will help to get back the loosing internal employee motivation.
Thefirst alternative will move Dialog Telekom further away from the competitionand create a monopoly temporarily for converged industries oftelecommunication, content & media and retail. However unfocused high-speedgrowth to capture the market without stabilizing the existing acquisitions candisassemble everything. The second alternative will give Dialog Telekom and itsemployees much needed breathing space.
The recommendation would be to implementthe second alternative initially to stabilize the organization without anyother drastic change in the direction. And after some time they can adopt theirlong-term beneficial value chain convergence option depicted in firstalternative.BusinessStrategyThebusiness strategy alternatives available for Dialog Telekom to improve thecompetitive position in the industries it operates would be as follows. Thefirst alternative for the competitive strategy would be to improve on thecurrent strategy of differentiation. It can improve this by having unique valueadded services for each of its current strategic business units DBN, CBNSAT andDialog Telekom itself. This can improve the customer loyalty and thereby cancharge a reasonable premium rate than competitors.
Thesecond alternative which Dialog Telekom can try to implement is cost leadershipto overcome the threat of lower rates provided by competition, Mobitel. Sincethe VAS are less in Mobitel the switching from Dialog to Mobitel is not much inurban people who use these VASes. But people who are using purely as avoice/SMS only are shifting as most of them are cost conscious and there is nomuch of a different in coverage. Hence if Mobitel improves on its VASes itwould become a serious threat, at which stage it would be only the rates whichdecides the attraction of that segment of the market.Typicallythe differentiation strategy is more likely to generate higher profits thanlow-cost strategy. However differentiation strategy implementation may involvehigher investment than low cost strategy.
Competitive scope is an importantfactor when considering competitive strategies. The recommended alternativedepends on the competitive scope in this situation. Considering bothalternatives and there pros and cons of each, most ideal should be to haveculmination of both differing from the segment of the market. Dialog Telekomshould have a focused differentiation strategy in the market where people arevaluing the VASes and cost focus in the market where usage is purely forvoice/SMS.SimultaneouslyDialog Telekom should look at strategic alliances as a corporative strategy to gaincompetitive advantage by working with other organizations. Currently they havestated this with some banks and some supermarket chains as mentioned above.However this can be vastly improved to include alliances with InsuranceCompanies, Stock Brokers, and Popular Food Chains etc.
Functional StrategyMostof these functional strategies are developed considering Dialog Telekomoperations, hence they cannot be applied directly to Dialog Telekom’s otherstrategic business units like DBN and CBNSAT. Functional strategies based onthe strategic choice of corporate and business strategies should be as follows.TheMarketing strategy currently followed by Dialog Telekom should be slightlymodified to accommodate the business strategy of cost focus. There should benew packages to attract new customers as keeping existing customers who requirebasic voice & SMS. This product/package development for the existing marketcan be supported by improving the current “pull” marketing strategyfor advertising and promotion.
DialogTelekom should not do any changes to their current financial strategy as theyare going to have pause/proceed stability corporate strategy. Hence they couldfurther improve their financial stability as there are no major growthstrategies to be implemented.DialogTelekom being a technological leader, R/Technology strategy is criticalfor its performance. They should further improve R capabilities by havingstrategic alliances with their major technology vendors. This is because mostof these vendors are the pioneers in developing latest technologicaldevelopments.
This will be mutually beneficial to both the parties. TheOperational strategy of Dialog Telekom should be streamlined to have a common,more efficient and effective operations flow with all business units. Thisrequirement has arisen from the recent expansions and acquisitions. Also changemanagement would be required in creating a common culture among Dialog Telekom,DBN and CBNSAT. TheHuman Resource Management strategy is another key functional strategy forDialog Telekom.
It should review its programs and procedures to suit the newstabilizing corporate strategy. It should improve on its current team basedworking environment to self-managing work teams which is more suited for anorganization where rapid growth is anticipated in future. Thecurrent Information Systems strategy should also be changed to handleenterprise ICT development in much more strategic level. The InformationSystems developed should be aligned with corporate and business levelobjectives. And also there should be an integrated approach among businessunits as much as possible. Apartfrom this Dialog Telekom should outsource certain operations such as legal,IS/IT infrastructure support, Advertising, 1st level Call Centre operation etcapart from the already outsourced operations like cleaning and transportation.
This is mainly because there is no major distinctive and/or core competenciesof Dialog Telekom in the above areas. DialogTelekom is known for its quality innovations due to their high emphasis onResearch & Development. However these precious research and theirdevelopment work needs to be protected by patents, copyrights and otherlegislative means. Hence if applicable, Dialog Telekom should aggressivelyfollow these protective legislations.DialogTelekom has clearly defined vision, mission, corporate values and goals as givenbelow.
Vision: · To be the undisputed leader in theprovision of multi-sensory connectivity resulting always, in the empowermentand enrichment of Sri Lankan Lives and EnterprisesMission: · To lead in the provision of technologyenabled connectivity touching multiple human sensors and faculties, throughcommitted adherence to customer driven, responsive and flexible business processes,and through the delivery of quality service and leading edge technologyunparalleled by any other, spurred by an empowered set of dedicated individualswho are driven by an irrepressible desire to work as one towards a common goalin the truest sense of team spiritCorporate Values:1. Totalcommitment to our customers 2. Dynamic& human centered leadership 3. Commitmentto task & team work 4. Uncompromisingintegrity 5. Professionalismand accountability 6.
Foremostconcern for respect & careOrganization Goals Thedeliverance of industry best return on investment to the shareholders of thecompany, and financial market recognition as the highest valued mobilecommunication operator in Sri Lanka. The deliverance of the best product in themarket place through leadership in customer service, product quality, provisionand adaptation to emerging technologies and convergence with the internet.Achievement of leadership in terms of (economically) effective subscriber base,brand recognition, consumer first choice and ownership of heart and mind shareof Sri Lankan consumers Theachievement of leadership in term of management practices, internal strengths,competitive resilience and quality of empowered resources, through adaptationof best practices and the active pursuit in new business in which corporatestrengths could be exploited in the interest of growing the value of thecompanyCorecompetenciesCore competencies can also be referred to as the strategiccapability of a business. Johnson, G., Scholes, K. and Whittington, R. describea core competency as the – Resources, activities and processes.
Some will beunique and provide competitive advantage (2008, p.9) The Core Competencies of Dialog Axiata:The characteristics of the core competencies include a specified source of thecompetitive advantage, an application in wide markets, and most importantly thedifficulty in imitation (Barney, 1995). Dialog Axiata has its valuable corecompetencies.