Business Strategy of Airtel Bharti (Essay Sample)

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Company’s Overview
Airtel Bharti is an Indian public limited telecommunication company headquartered in New Delhi and has been in business since July 7, 1995. Airtel is the largest mobile telephony provider in India and third largest telecom provider in the world. It is the 5th largest mobile operator in the world in term of subscribers with about 243.3 million subscribers as of February 2012. In India alone, Airtel has over Airtel has 177.95 million subscribers. The company operates in 20 countries across Asia and Africa (Bharti Airtel 2014 p 5).
Besides the mobile telephony services, Airtel also provides broadband and subscription television services. All Airtel telecom services are offered under the "Airtel" brand name with Sunil Bharti Mittal being the Chairman and CEO of the company. Airtel acts as national and international carrier of long distance communication services. The company operate in three geographical regions namely; the Indian subcontinent (Bangladesh, India and Sri-Lanka), Airtel Africa in 17 African countries and in the British crown dependency islands using the Airtel-Vodafone brand name (Bharti Airtel 2014 p 5).
External Analysis
This section uses Porter’s Five Forces Model to analyse the external threats that Bharti Airtel faces. The Porter five forces analysis framework suggests five forces that determine the industry profitability, competitive intensity, new entrants, substitute products, buyers and suppliers to establish the attractiveness of a market. These array of factors influences a firm’s market operation directly and how it responds to the competitive forces in the industry (Bharti Airtel 2014 p 8). The opportunity for a better performance is greater when the five forces are weaker within the industry.
Demographic Environment
Demographic environment refers to population elements such as gender, age, ethnic background, sex, race and social class. These is one of the forces that has impacted strongly on the company. Existence of large readily available professionals in India, a fast growing literacy rate and a huge population of youths in the country makes it favorable for a mobile industry to foster (Bharti Airtel 2014 p 8). Airtel has however always targeted the entire population unlike new entrants that mainly target the youth population. It does not discriminate it customers based on the income as it has schemes to accommodate customers of all class levels.
Economic Environment
These factors mainly include market growth, inflation rates and interest rates. These are the factors that affects on business operations of Airtel and the decision making processes of the company. India is a developing country with a GDP growth rate of 7 percent annually. This creates a good opportunity for international market players to invest in the Indian market (Bharti Airtel 2014 p 10). This growth has particularly been stimulated by the development of manufacturing sector and the growth of service sector in the country. Economic is therefore a very fit factor for mobile industry to explore and prosper in India.
Political and Legal Environment
Political factors refers to the extent in which the government supports the various industries and the economy of a country. Recent policy reforms in India demonstrates that the country supports telecom industry. The most notable ones being in January 2010 when the government proposed on waivering the license fees of telecom sector in the rural areas.
2009 there was a proposal to regulate on quality services for the telecom industry, regulation on interconnection for broadcasting sector and interconnection usage regulation among others (Bharti Airtel 2014 p 12). Each year since 2002, the government has continually reformed on the telecom sector by proposal and implementation of policies that favor the sector.
Technical Environment
Technical environment includes technical aspects such as automation, R&D and technological rate at the changes in technology. These are important factors in terms of eliminating barriers for entry. Technological shifts also affects costs, quality and leads to innovation (Bharti Airtel 2014 p 15). The telecom industry in India offers a good opportunity for foreign investors in other areas such as 3G, virtual private networks, Value Added Services (VAS) among others. The diagram 1 below summarizes the technological environment in India in a graphical format.
Internal Analysis
SWOT Analysis Bharti Airtel
The Bharti Airtel Limited SWOT analysis profile the crucial source of data and information for the top level management in their decision making processes. The Bharti Airtel Limited SWOT analysis is used to examine the company’s key business operations and its business structure. In addition, it also examines the company’s history and products and then provide a summary of the company’s revenue lines and strategies.
Strengths
Leadership-The guidance team comprises of 12 senior leaders who are a positive role models for the company. The guidance team is responsible for communication of the Airtel’s vision and values to the new employee recruitments, leading the company operations and departmental tasks and continuous reinforcement and monitoring of the company’s values by all employees (John et al. 2011 p34). The general manger is responsible for communicating and energizing Airtel’s values to the junior staff.
* Pan Indian Presence- Bharti Airtel currently has over 265 million customers as of February 2012. Being the largest cellular services provider in India and other broadband and telephone supplies, this is one of the strengths of the company. In addition, Airtel has strategic alliances with other major stakeholders including Sony-Ericsson, Sing Tel and Nokia with whom they partner. This means that Bharti Airtel has access to advanced technology from other telecommunications leading companies. Having covered the entire Indian market with its network, the company has fortified its customer base even further.
Weaknesses
* Untapped Rural Market. Even though Airtel is the largest mobile telephony provider in India, there are still a lot of untapped rural market. This has made it to be a strength for Airtel’s competitors such as the Reliance which are trying to make a foothold in that market before Airtel. However, the partnership with IFFCO in their attempts to penetrate the rural market is a good starting point for Airtel
(John et al. 2011 p35).
* Price Wars-Towards the end of 2010 and in the beginning of 2011 Airtel drained heavily due to slashing of price tariffs to no-profit levels in the industry by their rival companies. Airtel and Vodafone along with Idea increased their rates to make profit. This affected the customer’s base for these companies but at the end of the year it was established that a significant number of customers had reverted to Airtel due to their commendable network quality. The rival companies such as DoCoMo have also improved on their network quality which makes it a strength for them and a weakness for Airtel.
Opportunities
* Bharti Airtel possesses a customized Google version of its search engine which has a great potential to enhance the broadband services to its customers. The association with Google will provide advertising opportunities the Airtel brand.
* Global telecommunications networks recognizes Airtel as the key strategic company with whom they can partner with in the Indian market. This has resulted to partnership deals with such companies as BlackBerry Wireless Solutions where new iPhone was launched in India market via the Airtel distributorship.
* The company does not discriminate its customers in terms of their income ability. The company has an ongoing project where it invests its operation in 100,000 to 160,000 small villages every year (John et al. 2011 p33).
* The joint venture with Vodafone Essar and Idea Cellular is aimed at creating a new independent tower company with the brand name Indus Towers. This new commerce is expected to control over 60% of India's network towers.
Threats
* Airtel and Vodafone on and off relationship saw Vodafone with a 5.6% stake in the Airtel business break the tie and re-invest the same percentage to Airtel’s main rival Hutchison Essar which is a threat as Vodafone transfers the Knowledge and technology previously in the hands of Airtel to its competitors.
* Bharti Airtel is a potential target company for the takeover vision by other global telecommunications companies who have an interest into the Indian market.
Conclusion from the SWOT Analysis
• Bharti Airtel is the most successful telephony brand in India having the largest market share.
• Bharti Airtel business success in India is based on three pillars – connectivity, innovation and affordability.
• The core of its success is connectivity i.e. the network.
• Rarely promotes its product by celebrities.
• Post-paid services is cheaper than the pre-paid services.
VRIO framework
VRIO framework is used to find out the competitive advantage where the identified company’s key components help identify in what ways that the company have a competitive advantage over its competitors. Resources Valuable exploited by Bharti Airtel company are; Technology, Brand value, Location, Price, Experience, Diversification and Advertisement.
However, of the above value resources, with VRIO framework, I have identified that Acquisitions & Joint ventures with prominent overseas companies and outsourcing is its main competitive advantages (Czinkota & Ronkainen 2010 P177).
Bharti’s Resources

Valuab...