Business Case Study: Bharti Airtel
Background Bharti Airtel exists as one of the world’s leading global telecommunication carriers with over 307 million customers across its operations in 20 countries throughout Asia and Africa (Bharti Airtel, n.d.). Its offerings include 2G, 3G, and 4G services, high speed DSL broadband, mobile commerce, and fixed line services. Bharti was founded in 1995 by Sunil Mittal with only $900 in start-up capital, and has since grown to create over $14.2 billion in gross revenue for the fiscal year 2016-17 (IBM, 2005), (Bharti Airtel Annual Report, 2017). In order to achieve and maintain that growth, Bharti had to create and adapt to both incremental and revolutionary change. Mittal, once the owner of a bicycle spare parts business,
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This is when, as Mittal so aptly states, “[his] romance with phones started.” The beginning phases of Bharti Airtel were underway even though Mittal “did not know anything about …show more content…
Bharti was already buying from its vendors, with whom they thankfully had strong working relationships. However, the outsourcing relationship Bharti was looking to pursue was one that had never existed, and, although seemingly beneficial, carried an inherent amount of risk. Loss of control, for instance, exists as a major disadvantage to Bharti, who’s core competencies were excellent customer service, vendor management, and human resources. Relinquishing the amount of control Bharti was willing to surrender meant that each of those aspects were at risk of being undermined. Additionally, although each vendor has a proven track record for excellence, there remains a possibility that competitors to the vendors develop superior technology. One of the benefits of the industry was that switching costs between suppliers remained low. Entering into a contract completely forfeits that advantage. Furthermore, an outsourcing deal of this type requires a great deal of trust. Bharti would end up providing insights into their own operation to each of their vendors, which could unveil valued trade secrets. Each vendor most certainly has the opportunity to create downstream integration and become a competitor to Bharti. They also could share trade secrets with Bharti’s competitors in an attempt to gain
This is when, as Mittal so aptly states, “[his] romance with phones started.” The beginning phases of Bharti Airtel were underway even though Mittal “did not know anything about …show more content…
Bharti was already buying from its vendors, with whom they thankfully had strong working relationships. However, the outsourcing relationship Bharti was looking to pursue was one that had never existed, and, although seemingly beneficial, carried an inherent amount of risk. Loss of control, for instance, exists as a major disadvantage to Bharti, who’s core competencies were excellent customer service, vendor management, and human resources. Relinquishing the amount of control Bharti was willing to surrender meant that each of those aspects were at risk of being undermined. Additionally, although each vendor has a proven track record for excellence, there remains a possibility that competitors to the vendors develop superior technology. One of the benefits of the industry was that switching costs between suppliers remained low. Entering into a contract completely forfeits that advantage. Furthermore, an outsourcing deal of this type requires a great deal of trust. Bharti would end up providing insights into their own operation to each of their vendors, which could unveil valued trade secrets. Each vendor most certainly has the opportunity to create downstream integration and become a competitor to Bharti. They also could share trade secrets with Bharti’s competitors in an attempt to gain