Crossing Borders: Mtc’s Journey Harvard Case Solution & Analysis

Crossing Borders: Mtc’s Journey Case Solution

INTRODUCTION:

The case study revolves around Dr. Saad Al Barrak who is the CEO of the large Kuwaiti telecom company MTC. The strategic and growth operations and the changes that he sought to make for making that telecom company one of the leading companies in the world. Currently, MTC has developed its name and has become the symbol of growth oriented company in the world in the field of telecom. The company has also acquired many companies and developed its operations throughout the world but mainly in the Middle East and Africa as well. The CEO has founded Celtel,the largest telecom company in the sub-Saharan division of Africa. The CEO had many growth plans and wanted to label all of his companies under one brand and patent name in order to materialize its brand image and known development in the world. This is the story of CEO’s visit to the different regions of Africa in order to execute major plans and pilot work for the goals that has been set by the CEO’s team. The surprise that has made the team think over the matter of the Saudi Arabian government and the strategies to reevaluate the success opportunities and the possible results of the investments that could be made by MTC is discussed in the case.

PROBLEM ANALYSIS:

MTC’s team has to decide that whether the plan that has been on papers about one unique identity throughout the world would bring additional benefits to the growth of the company, Africa being one of the growing telecom sectors would worth the more investment goals, ‘one network’ proposal would bring the competitive edge to the company or not? The growth or investment required to expand the business under one patent or brand name i.e. “Zain” as proposed by Saad.

Other than that, the proposal that has been submitted by the UAE’s government that would also require ahuge amount of capital investment in order to make the project successful, decision making with respect to several proposals and strategic goals lined up by the CEO and the leading executives of MTC Telecom Company. The solution to the stated problems.

DISCUSSION:

Since being the leading telecom industry in the Middle East, MTC is exploring the opportunities to become market leaders worldwide. The company has bought Celtel in Africa, that is considered to be one of the poorer countries of the world having fewer growth opportunities, but the decision taken by Saad in favor of Celtel was not a bad one because they have developed their roots in Africa and became the leading telecom company in Africa which was considered by economists as one of the pessimists and less rated economy in terms of investment and growth, the investment already made had turned out to be fruitful for the company and MTC has got its way to developing its roots in Africa.

Furthermore, Mr. Saad wanted to materialize his goals and objectives related to his company to become one of the top 10 renowned mobile operators around the world by 2011. For that purpose, they have to establish long-term goals of expansion opportunities in the regions that have a tendency to grow and to complement the plans of the CEO of the company. The executives are well aware of the fact that there is immense competition in the gulf countries and in such conditions the opportunities of growth are more in the other countries where milestones are achieved by the company. The trip to the African regions has definitely turned out to be the fruitful venture for the company in order to capture the significant market share in the telecom industry.

SWOT analysis:

Strengths:

Being the largest telecom company, it has concrete base of the capital that is required to get invested for the growth purposes, the team of the company has got the leadership skills i.e. the composition of the team is made up of large number of highly skilled professionals who are running the matters of the company so well, moreover the process of the company to do exceptional work in the pre-paid market has been their biggest strength.

Weaknesses:

The telecom market is very saturated, talking about the gulf market in the telecom sector. Inter-market growth in UAE is not an easy task in the telecom industry. The company is the formation of acquisitions, the inter-cultural atmosphere of the company varies a lot that brings inefficiencies in day-to-day operations of the company that is why Saad wants to bring all the subsidiaries under one flag name i.e. Zain an internationally recognized and acclaimed brand to establish the unique image.

Opportunities:

The company could get huge development opportunities in the African regions, as the new initiative of “one network” that was proposed by the CEO of the company could make a huge difference. The successful implementation of one network in the major African countries has proved its versatility and importance for the company’s success.

Another opportunity as described in the case of the company is to accept the proposal from Saudi government i.e. to put forward their tender as was required by the government. Numerous opportunities are available to the companies. In order to take the maximum benefit, the company should do strategic analysis in all directions.

Threats:

There would be a threat in making an additional investment in Africa because as the company has already established its name in Africa and other companies kept an eye on MTC’s performance. As soon as the new initiatives would take their way the market leaders would intensify the competition by recognizing the market potential and making the situation tough for them. Moreover the everlasting image of African regions are not so good for doing businesses i.e. the general outlook of the African economy.

As the CFO of the company wants to lead the telecommunication industry in the whole world by following the following recommendations, he could achieve that purpose and can take the first step to moving towards the destination.

RECOMMENDATIONS:

The company has numerous investment opportunities to make their name bigger and fame greater, as the strong investment base, the company has to utilize it's monetary as well as technical assets and expertise to get the most of the advantage within a short period of time.

First of all the company has two proposals, either to go to Africa and gain amonopoly in the telecom industry by working on the strengthened areas that have potential to grow in the sector. Being the third largest telecommunication industry in Arica and after that successful gamble of Celtel the company professionals are in reasonable condition to quantify the effects that would be faced by the company once they re-entered the African market in order to establish their stake and capture the significant portion of telecom sector all the loopholes and drawbacks are also there to take an appropriate decision

The second option that the company could avail is accepting the Saudi proposal of being the third largest mobile phone operators in the country. The proposal has been termed as advantageous one because of the massive competitors that were competing to get the contract, MTC would have to bear extravagant bid price in order to make its share prominent. The proposal was attractive in a sense that the presence of pilgrimage throughout the year would support the investment in thetelecom industry. This is the process of becoming third largest mobile operators in an already competitive Gulf market

MTC should opt the first option as described above i.e. to invest the sufficient amount of capital to those African countries where the company has already established its significant share and where there are many growth opportunities are on their way if the strategic thinking patterns are good, and the executives would make the appropriate move when required there would be huge chances to materialize the dream of Saad in a very short period of time.

MTC should consider doing the following tasks in order to invest their precious capital in African economy:

  • The launch of the executive prepaid mobile network in Tanzania having the numerous feature of MTC with the brand name of Zain that has been selected by CEO in order to relaunch themselves as one unit throughout the world. Adding the creative features and making the connection desirable by quoting less overall rates throughout the world. Once the strategy gets successful, the connection name and network could be used for further profitable projects of the company. Since Tanzanian population widely use the prepaid connection the impressive addition from the company would turn the tables in their favor.
  • Extensive marketing and aggressive advertisement campaign would be required once the project has been started by the company, brand endorsement with the new name of ‘Zain’ and attention seeking slogan is necessary to make the people acquainted with the brand.
  • The company should start making investment to create a common identity under the patent name “Zain.” Once the company has established its name with the help of marketing and endorsement hey could shift the momentum of the campaign to “one network” project that has been successfully operated in some of the African regions.
  • Making a significant investment in Nigeria in telecom industry by acquiring small telecom companies or making mergers with those companies that are already providing some extensive and updated features to the customers. Making the supply of the services rise up to meet the demand potentials would be highly preferable in the current
  • Providing innovative top-up facility by debit card and use of bank account to recharge the pre-paid mobile service, providing more easy terms and extensive limits to scratch card holders and providing e-scratch cards facility too with desired amounts and denominations.

By making the appropriate use of the available resources and managing the infrastructure constraints, and dealing with the political instability, with the optimum planning and strategic thinking MTC would make their projects successful in the growth oriented telecommunication industry in Africa.

STRENGTHSWEAKNESSES
  •  LARGE TELECOM COMPANY
  •  HEAVY INVESTMENT BASE
  •  PRE-PAID MARKET LEADERS
  •  SATURATED TELECOM MARKET IN GULF COUNTRIES.
  •  VARIABLE INTER-CULTURAL PRESENCE IN THE COMPANY’S ATMOSPHERE.
OPPORTUNITIESTHREATS
  •  NEW INITIATIVE OF “ONE NETWORK’.
  •  BECOMING NUMBER ONE TELECOM COMPANY IN AFRICA
  •  INTENSIVE COMPETITION FROM THE COMPETITORS.
  •  GENERAL OUTLOOK OF AFRICAN ECONOMY.

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