Blue Ocean Strategy in the Networked Society – Asian Operator #2

 In the precedent post, I created the Strategy Canvas for the Red Ocean of the Asian operator. In this post we will see how applying Blue Ocean Strategy within the Networked Society will affect the operator’s business, strategy and marketplace.

The ERRC grid looks like this:



Asian operator ERRC grid

•  Pay As You Go: The consumers want to control their spending and because I am proposing to introduce bundles of buckets. This should be eliminated.
• Different Tariff plans: The high number of different tariff plans should be eliminated and replaced by simpler bundled tariff plans. This will lead to reduced operations in the BSS and hence increased cost savings.

Reduce

• National Roaming charges are still high while in other market consumers only pay a single access charge. The regulator should remove these national roaming charges in order to stimulate voice traffic.
• Some of the services are not really adding value to customers; most of them are standard telecom supplementary or sms-based services.

Raise

• Services portfolio: Increase and diversify the portfolio based on consumers needs, behaviors and spending patterns.
• Network performance: This will improve customer satisfaction, reduce churn with a high quality network.
• Coverage: reach a large number of (sub-) urban and rural populations to increase customer reach, customer satisfaction and sales. This will require additional investments in the radio network. This investment should be easily justified by new customers’ acquisition.
• Consumers Intelligence: understanding the consumer’s needs is key for future growth opportunities. Ericsson ConsumerLab can provide valuable input for strategic decisions, through its extensive research on consumer behavior. According to the recent Personal Information Economy report from Ericsson ConsumerLab, more than 44% of the study respondents would let companies use their information to personalize offers, and 41% would let companies use personal info to improve or develop new products. Hence the increase of Consumers Intelligence.

Create

• Bundled plans: This will provide the ‘segmented’ consumers a targeted offering and at the same time provide the means to sell new data services (3G & 4G network are deployed in every region of the country) and fight the so-called over-the-top internet services providers. At the same time, it provides a suitable solution to the cost control drive of the subscribers in this market.
• Innovation: this is an important opportunity for competitive differentiation in this marketplace. To develop value propositions beyond simple voice and data plans, for the growing enterprise marketplace (companies from different industries are connected in the Networked Society), for the non-served rural population and the growing sub/urban addressable market. Cloud computing is an integral part of the Networked Society. Cloud offerings will improve traffic volumes but also drive higher ARPU by moving up the value chain and selling integrated offerings of connectivity, infrastructure and software-as-a-service. These offerings will create longer-term loyalty with customers and increase customers’ stickiness and create a new marketplace.
• Innovative business models: Explore new revenue streams by testing innovative business models to address customers’ needs. In the Networked Society, telcos have the opportunity to become core ICT providers by creating network-centric business through data centers or service-oriented developments. In the Networked Society, different customers from different industries are connected. This totally new marketplace needs to be addressed, served and supported. Tremendous opportunities for growth ahead indeed that will require innovative business models to cater to this increasing demand.
• Cost control: Mobile traffic demand will continue unabated and the need for continued investments in the radio access network, the backhaul, the core and the OSS/BSS will increase. Operating the legacy platforms and services in parallel with the new network introduces significant costs in the network, OSS, BSS and overall service operations. Cost reduction can be achieved with network outsourcing. Ericsson is the world leader in Managed Services. Ericsson operates large multi-vendor networks and related business processes—such as provisioning, network engineering, applications management, field maintenance, network optimization and spare parts management.

And here is the Blue Ocean Strategy Canvas: