Telco Case Study

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i. Cost Leadership-Low Cost; Involves projecting a company as the cheapest source for a good or service to offer to a wide range of customers. Costs are minimized and the savings are then passed on to customers. Celcom • Does this by pushing for a culture that inculcates high productivity and accountability. The company has reduced the number of layers in its organizational hierarchy from the teens to just 6, and in the process, allowing for faster and transparent decision-making. With the resulting increase in productivity, Celcom managed to increase operational efficiency to lower its cost and offer products at the most competitive pricing yet still able to generate good margins. Celcom Gold Plus plan e.g., at only RM2.45 per GB offers …show more content…
Cost Leadership-Best Value; Products and services are offered to a wide range of customers at the best price-value available via good packages and features.
Celcom and DiGi • Products are not only low cost but also give best value to customers in the dog-eat-dog world of mass market consumerism. As illustrated, postpaid plan of both telcos promise customers unlimited calls to all networks and 20GB free weekend internet. Therefore, the above Cost Leadership-Low Cost is also applicable to this strategy for these 2 telcos.
Maxis • Maxis likes to think that its mobile plan and services are value for money. But in the digital world, what matters most to customers is unlimited access to calls and internet data at the most affordable pricing. Telcos who are unable to provide this will see their customers leaving for the competitors who can. This explains why Maxis lost more than a million customers in just a year (2Q2015-1Q2016). New product launches by Maxis however, are likely to be priced closer to its competitors with promises of value, similar if not better than the competitors. Maxis has come a long way from the most expensive to now, one that offers amongst the cheapest price per GB. E.g. like Celcom, its MaxisOne Plan 98 is currently offering unlimited calls to all networks and free 20GB weekend data for just
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With a very competitively priced starter pack of just RM10, the new ‘Xpax’ comes with RM6 credit limit and 200MB high-speed internet with a variety of add-ons. Celcom hopes the new plan which gives access to the best prepaid Internet will enable it to (i) considerably increase usage rate of its current prepaid users to generate higher revenue and (ii) steal prepaid users away especially from its arch rival Maxis, which offers a relatively expensive pricing (with limited internet data) on its ‘Hotlink’ brand. Prepaid users are mainly youth who enjoy sizeable internet data but are not willing to pay extra for it and they currently constitute some 75% of Celcom total mobile customers.
Maxis • Caught by its dwindling customer base who had switched to competitors which promise upgrade data plan, some at more affordable prices, Maxis is fighting back by doing just that. However, Maxis fight is really about keeping loyal and high-paying customers in the hope that the share of the wallet increases with increased demand for data and data-related services. Offering more data is one way of hooking more customers on to applications, which eventually increase data usage cost that Maxis had hoped

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