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DIGI.

COM BERHAD Company Overview

Note: 100% indicates wholly-own subsidiaries DiGi Telecommunications Sdn Bhd (herein after known as DiGi), a subsidiary of DiGi.com Berhad (former name: Mutiara Swisscom), is a mobile communications company that engaged in establishment, maintenance and provision of telecommunication and related services. DiGi, was established in May 1995, primarily operates in Malaysia with its headquartered1 in Shah Alam, Selangor. DiGi sister company, Pay By Mobile Sdn Bhd deals with electronic financial services, while its subsidiaries are DiGi Services Sdn Bhd (property holding, renting of premises) and Djuice.Com Sdn Bhd (others related services).

Ownership
DiGi.Com Berhad is listed on Bursa Malaysia Securities Berhad under the Infrastructure category with a paid-up capital of RM77.75 million and a market capitalization of approximately RM16.8 billion as at 6 April 2009. As of March 2010, DiGi market capitalisation was approximately RM17.5billion. Top 5 Shareholders as at 18 March 2010 1. Citigroup Nominees (Asing) Sdn Bhd 2. Employees Provident Fund Board 3. Amanahraya Trustees Berhad 4. CIMB Group Nominees (Tempatan) Sdn Bhd 5. Valuecap Sdn Bhd **based on year 2009 &2010 No. of Shares 380,975,03 124,865,095 37,090,300 27,500,000 23,935,200 % 49.00 16.06 4.77 3.54 3.08

Business Description
DiGi operates through 2 business lines: Voice Services fixed and mobile telephony (prepaid, postpaid, international services) Data Services dial-up, mobile and broadband internet, messaging

Market Composition
Business Line Voice Services Fixed Line Telephone Market Composition Main Rival Telekom, Maxis Maxis, Celcom, UMobile Telekom, Maxis, Celcom

Mobile Cellular Dial-Up Internet (Narrowband/ Wired Broadband) Data Services Mobile Internet Wireless Broadband

Maxis, Celcom, P1 Telekom, Maxis, Celcom, P1, UMobile

Commenting on DiGis Vision


DiGis Vision is to be seen as stars in excellent customer experience by enhancing communications to improve customers' quality of life, at home, work and play. Comments: This is a good statement reveals DiGis core communications business. It is short , not so long sentence length; thus acceptable. Plus, it does serves as the starting point in everything DiGi do and express where DiGi want to be in the long term. It does not tell how DiGi are going to get there but sets the direction. DiGis strategists believe that the

Vision attracts commitment and energises employees to strive for an established standard of expected excellence.

Commenting on DiGis Mission


The numbers in parentheses correspond to The 9 essential components of the mission statement: 1. Customers (Who are the firms customers?) 2. 3. Products or services (What are the firms major products or service?) Markets (Where does the firm complete?)

4. Technology (Is the firm using the latest technology?) 5. Concern for survival, growth, and profitability (Is the firm committed to growth?)

6. Philosophy (What are the basic beliefs, values, aspirations and ethical priorities of the firm?) 7. Self-concept (What is the firms distinctive competence?)

8. Concern for public image (Is the firm responsive to social, community and environmental concerns?) 9. Concern for employees (Are employees a valuable asset of the firm?

DiGis Mission is to: 1. Provide customers specific solutions to meet individual needs for communications, connectivity, and access to information and security; (1,2,4,6,7) 2. 3. 4. Provide an environment where our employees can grow and be fulfilled; (5,8,9) Provide superior returns to shareholders; and, (5,9) Contribute to improving life in Malaysia. (3,8)

In DiGis 2009 annual report, DiGi declared this in addition to their mission: Every day we go the extra mile, in small and big ways, to exceed our customers expectations, by delivering mobile and internet services that are; Made for me, Make it easier, and offer the Best deal. DiGi make things simple and easy to understand for their customers. Their products and services are practical and intuitive. They make things happen to uphold Make it Easier.

Comments: The statement is clear as it declares DiGis reason for being. Apart from that, it also fulfils these characteristics of a mission statement: broad in scope; do not include monetary amounts, numbers, percentages, ratios or objectives 250 words in length Inspiring identify the utility of DiGis products as long as it is for communication reveal that the DiGi is socially and environmentally responsible includes all 9 essential components of mission statement making it effective

The External Factor Evaluation (EFE) Matrix


Key External Factors Opportunities 1. Globalization 2. Higher Standard of Living Among Malaysians 3. Rising Telecommunication Penetration & Demand 4. High Capital Investment 5. Advance Technology - Need Competent Human Resource 6. Traditional and Modern Substitutes for Mobile Threats 7. High Inflation - Increased Price 8. Government discourage cell phone usage among school kids. 9. New entrants can offer low price or better performance. 10. High Switching Cost (to other suppliers) for DiGi. 11. High Bargaining Power of Consumers. 12. Continuous technology advancement in wired & wireless. Total 0.13 0.05 0.12 0.03 0.10 0.05 1.00 4 1 2 3 4 3 0.52 0.05 0.24 0.09 0.40 0.15 3.53 0.15 0.10 0.08 0.08 0.06 0.05 4 4 4 4 4 4 0.60 0.40 0.32 0.32 0.24 0.20 Weight Rating Weighted Score

Total weighted score of 3.53 indicated in the calculation is above the average (midpoint) of 2.5, so DiGi is doing pretty well, taking advantage of the external opportunities and avoiding the threats facing the firm. Yet, there are always room for improvement.

Opportunities and Threats


OPPORTUNITIES Globalization Rationalization EFE Weight EFE Rating important as it greatly DiGi can response by contributes to frequent capitalizing on it and kept international roaming demand offering roaming and broadband with instant communication product and services broadband (mobile) and information internet services to (for mobile seeking (broadband broadband, DiGi aim to assist MCMC in reaching 50% of the important indication that most Malaysian population by end 2010) Malaysian can afford it is high quality minimum one mobile (service telecommunication services at provider) and broadband competitive prices important statistic as higher penetration = higher demand for DiGis product and services important factor as entry DiGi have high capital investment barrier: largely contributed by its largest high cost for new entre to shareholder compete with existing giant in the industry mild important factor as DiGi are able to response by human talent is one of the key focusing on recruiting new blood area for DiGis continual while provide intensive training to success and survival existing staffs and succeeded in expertise are expensive maintain a competent yet loyal workforce at an affordable cost

Higher Standards of Living Among Malaysians

Rising Telecommunication Penetration and Demand (Broadband, Cellular) High Capital Investment

Advance Technology Need Competent Human Resource

THREATS

Rationalization EFE Weight EFE Rating High Inflation Increased Price important because high inflation DiGi can response by continuous will decrease demand for R&D to prevent going outdated communication tools overnight and kept selling price low

Continuous technology advancement in wired and wireless

High Bargaining Power of Consumers

important because DiGi is still trailing behind Maxis and Celcom plus once outdated, it is hard to bounce back in a short duration important because power of DiGi can response by offering high bargain for lowest price and quality telecommunication services highest quality switch to at competitive prices consumers due to non-existent of information asymmetry

High Switching Cost

important because supplier relationship management can make or break DiGi as they practically control DiGis product and services selling price

DiGi can response by keeping close relationship with their existing suppliers: Ericsson and Trilsilco Folec while being optimistic that there will be new possible suppliers in the future

Competitive Profile Matrix (CPM)


DIGI Critical Success Factors Advertising Product quality Price competitiveness Management Financial position Customer loyalty Global expansion Market share TOTAL Weight 0.20 0.15 0.10 0.05 0.10 0.15 0.10 0.15 Rating 4 3 3 4 4 4 3 3 Score 0.80 0.45 0.30 0.20 0.40 0.60 0.30 0.45 3.50 MAXIS Rating 3 4 3 3 4 4 4 4 Score 0.60 0.60 0.30 0.15 0.40 0.60 0.40 0.60 3.65 Rating 2 4 2 3 3 2 4 4 CELCOM Score 0.40 0.60 0.20 0.15 0.30 0.30 0.40 0.60 2.95

The Internal Factor Evaluation (IFE) Matrix


Key Internal Factors Strengths 1. Innovation 2. good reward system to subscribers 3. Facilities auto reloads online payment, etc 4. experience management personnel from overseas. 5. stable (increasing) number of subscribers leading to Strong Financial Performance. 6. World Class R&D. Weaknesses 7. Dependency on strategic sharing between mobile producer, application writer and etc. 8. latest info on new technologies seldom/late to reach end users. 9. lack of base station compared to competitors 10. DiGi Ambassadors lack of involvement Total 1.00 2.77 0.12 0.11 0.09 0.03 1 1 1 2 0.12 0.11 0.09 0.06 0.16 0.09 0.02 0.18 0.10 0.10 4 3 3 4 4 3 0.64 0.27 0.06 0.72 0.40 0.30 Weight Rating Weighted Score

Total weighted score of 2.77 indicated in the calculation is above the average (midpoint) of 2.5, so DiGi is doing pretty well, taking advantage of the internal strengths and avoiding the weaknesses facing the firm.

Matching Matrix & SWOT Matrix


Opportunities 1. Globalization 2. Higher Standard of Living Among Malaysians 3. Rising Telecommunication Penetration & Demand 4. High Capital Investment 5. Advance Technology Need Competent Human Resource Traditional and Modern Substitutes for Mobile SO Strategies WO Strategies

*increase customer rewards and provide *taking benefits/strength of consistent good services to existing other categories of provider e.g. joint venture to increase customers(S4,S5,S7,04) the number of base station by *Provide myriad International Services sharing through (Foreign Worker) and continuously pursue MOU(O3,W1,W4) USP obligation by providing access to basic telephony communications to *utilize latest technology by districts designated to DiGi marketing new products through dealers instead of (S2,S5,O1,O2) ambassadors (O3,W3)

Threats 1. High Inflation Increased Price

ST Strategies *joint venture with handheld mobile providers to include latest technologies and internet function into mobile(S1,S6,T2,T3,T5) *stand ahead of the competitors and encourage consumers to switch to DiGi with the slogan ITS TIME TO TO DIGI (S1,S2,S4,S7,T3)

WT Strategies *reduction of the number of DiGi Ambassadors to enable the cost to be switch to sponsoring educational program to strengthen DiGi name students will subscribe to DiGi in the Future(W2,T4) *lower down the calling rate to remain competitive(W3,T1,T3)

2. Government discourage cell phone usage among school kids. 3. 4. New entrants can offer low price or better performance. High Switching Cost (to other suppliers) for DiGi.

5. High Bargaining Power of Consumers. 6. Continuous technology advancement in wired & wireless.

BCG Matrix
Since DiGi operates through 2 business lines (voice and data services), the BCG Matrix will be use to analyze 4 (prepaid and post paid, fixed telephony, smart phones and mobile/wireless broadband) among its numerous strategic business units (SBU) or product lines.

BCG Matrix is a portfolio planning model developed by Bruce Henderson of Boston Consulting Group in 1968, based on the product life cycle theory.

DiGi BCG Matrix The following BCG matrix classified 4 DiGi's SBU (prepaid and postpaid, fixed telephony, smartphones and mobile/wireless broadband) into 4 quadrants (Question Marks, Stars, Cash Cows and Dogs):

Type of strategies used by DIG:


Intensive Strategies Market Penetration Market Development Intensive Strategies Product Development

Market Penetration strategy Market penetrations seek to increase market share for existing products in existing markets through greater marketing efforts that encourages more usage/spending among consumers In the first half of 2010, DiGi had invested heavily on advertising to promote their product and successfully maintaining their place in Malaysia Top 10 Advertising high spenders list from Jan June 2010. DiGis Existing Markets and Products with their potential Market Penetration Strategies.

Market Development Market development is the term used in introducing existing products to new markets which can be new geographic areas or currently underserved communities (DiGi recognized 2 sources of new markets potential or new foreign workers and rural communities) Provide countless International Services and continuously pursue USP obligation by providing access to basic telephony communications to districts designated to DiGi

Product development strategy Product development seeks to increase sales and profit by improving/modifying present products/services or developing new ones for its existing markets. This is especially important in the era whereby global consumer multitask with their mobile devices. Joint venture with handheld mobile providers to include latest technologies and internet function into mobile.

Conclusion

As the conclusion, as per we have chosen the product development strategy is the best strategy for DiGi.sdn.bhd. However, we want to conclude here that product development is the best strategy because it can be developed more new products in the future or it can be modified the existing products of Digi so they appear new, and offering those products to current or new markets. Whereby, with the latest and new technologies the DiGi can function well and provide good services to customers and subscribers. Also, it is essential to the long-term process of DiGi business services. Other then, it will remain the competitive in high-technology of the product in DiGis company as well. Thus, it can be found more sales and more profit in the future by developing and modifying this DiGi product and services even developing new product in existing market too. This is especially the most important in the era of global consumer with the DiGi mobile products and services or devices.

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