Telecommunication industry is getting competitive day by day. The companies offer lots of different products and services to their customers. Almost all of these services are now based on 4G or LTE, advanced technologies and almost all services provided by different companies are same. The companies have to involve themselves in different marketing techniques and promotional tactics to gain new customers. The companies also adopt different growth strategies to expand themselves in different market and have large product and service portfolio (Jurčić, and Gotovac, 2016).
Ansoff matrix is the marketing tool used by the companies for planning the future growth in combination of products and services. The matrix suggests the companies four different strategies in terms of new product and market. Product development, market penetration, market development, and diversification. Here is the detailed Ansoff matrix analysis of telecom industry.
Market Penetration
Market Penetration is the growth strategy suggested by Ansoff matrix. The matrix suggests the companies to sell the current product in the current market. This strategy helps the company in increasing the sales and market share in the industry. This strategy is considered as least risky among all the other growth strategies suggested by Ansoff Matrix. The telecom industry is highly saturated, there are many companies competing with each other locally and internationally. Almost all the telecommunication companies provide roaming and international services to customers. The telecom companies can adopt this strategy by offering more packages and discount offers to their customers. More economical the call rates and packages will be, higher the sales of the company will be. Ufone did aggressive advertising of its revised prices, call rates, new packages and many other things to create awareness among people. Reliance telecommunication offered Jadu Pack which allows lifetime validity to the subscriber (Jain, 2010).
Product Development
Product development is the strategy suggested by the Ansoff matrix. It encourages the company to introduce new product in the current market. This strategy suggests the product portfolio expansion to the companies. In the telecom industry, companies adopt this strategy by investing more on R&D and get to know the needs and demands of the market. For example, Airtel introduced high speed broadband, and Airtel mobile for the consumers as a new service and product. Vodafone introduced Wi-max, 3G and 4G as the product development strategy. There are times where companies relaunch the existing services or products as new product in the market. Telecommunication companies can also introduce the advance services of previous services as new one (PGDM, 2020).
Market Development
Market Development is the strategy which suggests the company to introduce its current products in the new markets. This is the growth strategy which encourages market expansion. The companies explore new potential markets and introduce its operations there to gain more customers. They target new customer base there. The market expansion could be done in different was like geographically or demographically. Telecommunication companies have like Airtel, Vodafone, Ufone, Telenor etc. have expanded themselves geographically in different areas. They have their operations in both rural and urban areas where there were less chances of connectivity. Moreover, their services are for almost every age group and for both male and females. Ufone, Telenor, STC, etc, started international data roaming services. They have different rates and packages for individuals and businesses. Airtel has expanded itself in African market and spread its connections and network widely there (Vinaykittu, 2016).
Diversification
Diversification is the riskiest growth strategy among all four others suggested by Ansoff matrix. It motivates the company to enter in the new market with completely new product. If this strategy gets hit, the company is able to take lots of benefits from it. It also helps in spreading the risks of loss to much larger area. Telecommunication companies adopt this strategy. There are many companies like Ufone, Zong, who introduced its own mobile phone devices. Reliance telecommunication involved itself in both related and unrelated diversification. The related diversification strategy of the company was its new launch of satellite tv, acquisition of eWave World, which was UK based Wi-max operator. Its unrelated diversification strategy was Life insurance, general insurance etc. (Jain, 2010).
References
Jain, S. 2010. Ansoff matrix of Reliance telecommunications. [Online], Available at: https://www.slideshare.net/siddhantjain/ansoff-matrix-reliance-communication-5647400, [Accessed on: 5th February, 2020].
Jurčić, I & Gotovac, S. 2016. New approach in mobile telecom operator’s analysis – “Analysis of Eight Key Fields”. [Online], Available at: https://www.researchgate.net/publication/308611478_New_approach_in_mobile_telecom_operators_analysis_-_Analysis_of_Eight_Key_Fields. [Accessed on: 5th February, 2020].
PGDM, 2020. Telecom sector final. [Online], Available at: https://www.academia.edu/4387898/Telecom_Sector_Final. [Accessed on: 5th February, 2020].
Vinaykittu, 2016. Airtel -SUPERIOR OF TELECOM INDUSTRY. [Online], Available at: https://mpk732t22016clusterb.wordpress.com/2016/07/25/airtel-superior-of-telecom-industry/, [Accessed on: 5th February, 2020].