Strategy Analysis of Pldt
Executive Summary
Being the largest company in the Philippines, The Philippine Long Distance Telephone Company (PLDT) provides a wide range of telecommunication services, including fixed line, cellular and broadband services. For the past few years, a revolution has taken place in the telecommunications industry and the PLDT dominance in the industry has been threatened. Competing in a maturing industry, Revenue growth for PLDT has been stagnant for a few years and revenues decline for the first time in 2009. The future outlook is not prospective for PLDT either, as competition will be intensified by a change in government attitude in promoting market liberalization in the telecommunications industry. The current situation and the dimmed prospects facing PLDT have led to a 22% drop in share price as investors and shareholders fear that they could not achieve reasonable rates of return for their investment in PLDT.
To regain investors’ confidence, we propose PLDT to integrate the services in mobile, fixed voice and data. This strategy, when implemented, will minimize the negative effect of revenue cannibalization. In addition, it will put PLDT in a better position to capture the advantage of the rising availability of PCs and arrival of faster internet access phones in the intermediate term and become more attractive to outsourced companies in Philippines. Finally, it will enable PLDT to exploit positive synergies among existing business units, exploit Long Tail opportunities and be well poised to progress and tap onto the opportunities presented by the diminishing boundary between technology, media, and telecommunications (TMT) industries.
Content
Executive Summary i
Introduction of the Company 1
The Problem 2
Strategic Audit of the Industry 3
Key Success Factor for the Industry 3
Trends in Business Environment 4
Porter’s 5 Analysis 5
PLDT’s Current Strategy 6
Vision and Mission Statement 6
PLDT’s Current 4-pronged Strategy 7
External Factor Evaluation 8
Being the largest company in the Philippines, The Philippine Long Distance Telephone Company (PLDT) provides a wide range of telecommunication services, including fixed line, cellular and broadband services. For the past few years, a revolution has taken place in the telecommunications industry and the PLDT dominance in the industry has been threatened. Competing in a maturing industry, Revenue growth for PLDT has been stagnant for a few years and revenues decline for the first time in 2009. The future outlook is not prospective for PLDT either, as competition will be intensified by a change in government attitude in promoting market liberalization in the telecommunications industry. The current situation and the dimmed prospects facing PLDT have led to a 22% drop in share price as investors and shareholders fear that they could not achieve reasonable rates of return for their investment in PLDT.
To regain investors’ confidence, we propose PLDT to integrate the services in mobile, fixed voice and data. This strategy, when implemented, will minimize the negative effect of revenue cannibalization. In addition, it will put PLDT in a better position to capture the advantage of the rising availability of PCs and arrival of faster internet access phones in the intermediate term and become more attractive to outsourced companies in Philippines. Finally, it will enable PLDT to exploit positive synergies among existing business units, exploit Long Tail opportunities and be well poised to progress and tap onto the opportunities presented by the diminishing boundary between technology, media, and telecommunications (TMT) industries.
Content
Executive Summary i
Introduction of the Company 1
The Problem 2
Strategic Audit of the Industry 3
Key Success Factor for the Industry 3
Trends in Business Environment 4
Porter’s 5 Analysis 5
PLDT’s Current Strategy 6
Vision and Mission Statement 6
PLDT’s Current 4-pronged Strategy 7
External Factor Evaluation 8
Bibliography: Business Monitor International. (2011). Philippines Telecommunications Q2 2011 Report. London: Business Monitor International. Campbell, G. (2010). Global Wireless Matrix 1Q10. Bank of America Merrill Lynch. Fitch Ratings. (2010, December 10). Reuters. Retrieved March 2011, from FITCH affirms PLDT 's ratings, outlook stable: http://www.reuters.com/article/2010/12/10/markets-ratings-pldt-idUKWNA658820101210 Investopedia Philippine Long Distance Telephone Company. (2010). Full Year 2010 Financial and Operating Results. Philippines Long Distance Telephone Company. (2010). Annual Report 2009. Philippines Long Distance Telephone Company. (2011). SEC Form 17-C. Santiago, J. (2010). Upgrading to Neutral on underperformance. UBS Investment Research. Wikipedia. (2011, February 19). Wikipedia. Retrieved March 2011, from Provisioning: http://en.wikipedia.org/wiki/Provisioning Yahoo Finance ----------------------- [1] (Philippine Long Distance Telephone Company, 2010) [2] (Philippine Long Distance Telephone Company, 2010) [3] (Yahoo Finance) [4] (Philippines Long Distance Telephone Company, 2010) [5] (One Source) [6] (Philippines Long Distance Telephone Company, 2010) [7] (One Source) [8] (Philippines Long Distance Telephone Company, 2010) [9] (One Source) [14] (Peter, 2010) [15] (Business Monitor International, 2011) [16] (Peter, 2010) [17] (Campbell, 2010) [18] (Investopedia, 2011) [19] (Alava, Pike, Lorenzana, Petines, Camus, & Relatado) [20] (Campbell, 2010) [21] (Alava, Pike, Lorenzana, Petines, Camus, & Relatado) [22] (Peter, 2010) [23] (Campbell, 2010) [24] (Philippines Long Distance Telephone Company, 2010) unless otherwise stated [25] (Santiago, 2010) [26] (Philippines Long Distance Telephone Company, 2010) [27] (Nazareno, 2008) WONG Zyue Xhien | F1791439K Figure 13 Wireless Market Share by Subscribers (June 2010) Figure 16 Fixed-Line Market Share by Subscribers (2007) [pic]