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This paper focuses on DiGi Telecommunication Sdn Bhd, one of the key players in the
telecommunications industry alongside Celcom and Maxis. DiGi holds a large subscriber base
and is constantly growing its market share. DiGi offers a large variety and package options to
consumers. Sources of information used are credible and reliable journal articles, the companys
website and annual report, newspaper articles and relevant published books.
A SWOT analysis is conducted to identify the internal and external influences on the
organization. The strengths of DiGi are that its mobile plans are one of the cheapest in the
market, product innovation is good and DiGi has attractive career development prospects for its
employees. The weaknesses of DiGi are the lack of base stations causing poor network coverage,
poor customer service and slow dissemination of information to publics. As for the opportunities
of DiGi, globalization is a positive advantage for DiGi, living standards in Malaysia are
increasing and the number of foreign workers and international students are growing in the
country. Threats faced by DiGi are the tight governmental regulations, strong competitors and
high bargaining power of suppliers.
Based on the SWOT analysis, two strategies are proposed; Strategy 1: Low Price Plan focus
strategy and Strategy 2: Best Quality Service differentiation strategy. Strategy 1 is a mobile
plan catered for the growing niche market of foreign workers and students which offers cheap
international call rates and more mobile internet capacity. Strategy 2 is mainly to improve the
customer service of DiGi which is not currently at its best state. After careful evaluation of both
strategies, it is proposed that the Low Price Plan strategy is the best option out for the business
as it requires lower monetary risks, while it takes a longer period of time to produce results for
Strategy 2.
Two managerial functions proposed to aid the implementation of the strategy is organising and
leading. The mechanistic organisational structure is used in this case involving high work
specialization, functional departmentalisation and a clear chain of command. As for leading,
transactional leadership is applied in the early stages of the product implementation, while the
motivational styles used are the goal-setting theory and Herzbergs two-factor theory.
The integration of the Low Price Plan strategy and managerial functions of organizing and
leading will ensure the success of the implementation of the strategy which leads to a growth in
DiGis business.
1.0 Introduction
1.1 Purpose
The purpose of this report is to conduct a strategic analysis for DiGi Telecommunication.
Using the SWOT analysis, two strategies are proposed and the preferred strategy is implemented
with supporting justifications to improve DiGi Telecommunications position in the industry.
Two management functions, organizing and leading are also proposed to support the
implementation of the chosen strategy.
1.2 Company information
DiGi Telecommunication Sdn Bhd, a subsidiary of DiGi.com, is one of Malaysias
leading telecommunication providers, mobile broadband and mobile internet company since May
1995 (DiGi Telecommunications Sdn Bhd, 2014). DiGi is the first telecommunication company
in Malaysia to introduce the mobile number selection service in 2008 and has a subscriber base
of 10.5 million as of 2012 (MalaysianWireless, 2013). DiGi offers products and services
including prepaid, postpaid, data plans and services, international roaming, calling cards and
WAP services. The companys mission is to Deliver Internet for All and a vision of Changing
the Game by pushing boundaries, defining new standards, and improving in their business
(DiGi.com Berhad, 2012).
1.3 Assumptions
It is presumed that all information sources regarding DiGi Telecommunication and other
statistics are reliable and credible. The report assumes that DiGi has not implemented the
proposed strategies and is looking for opportunities to grow. Besides, DiGi is assumed to have
sufficient resources to fund the strategy.
1.4 Methodology
The information obtained to support the analysis and proposed strategies in this report are
from DiGis official website and annual reports, credible internet sources, journals articles and
management textbooks.
Source: Celcom Anxista Bhd, 2014; DiGi, 2014; Maxis Bhd, 2014
Table 1: Comparison of Maxis, Celcom and DiGi price plan for iPhone 5S
2.1.2 Innovation
DiGi has a good track record in product innovations. For example, DiGi was the first
Malaysian mobile operator to co-brand Opera Mini featuring a compression technology that
allows non-smartphone phone users easy access to internet. In 2012, DiGi established
Partnership with WhatsApp which offers subscribers unlimited access to WhatsApp at an
affordable rate (DiGi, 2012).
2.1.3 Attractive career development
DiGi provides attractive career development prospects for employees. They have many
initiatives and programs for all levels across the organization. For example, in 2012, targeted
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coaching and development programs were launched to address key skills and leadership
deficiencies of their employees (DiGi, 2012).
2.2 Identification of weaknesses
2.2.1 Poor network coverage
DiGis lack of base stations as compared to its competitors causes poor network and
broadband coverage which leads to dissatisfaction among subscribers and give DiGi a bad
reputation. Based on MalaysianWireless (2013), both Celcom and Maxis have about 80% 3G
coverage with more than 7000 3G base station compared to DiGis 2000-3000 3G sites causing
poor indoor coverage.
2.2.2 Unsatisfactory customer service
Based on several online forums, there evidence show that DiGi has poor customer
service. Customers complain about the long waiting time in service centres and call centres, slow
e-mail responses and unfriendliness of DiGi sales representatives (Complaints Board, 2014). As
stated by a DiGi subscriber in Lowyat.net, cIvIc_noob (2011) mentions that he had to call DiGi
many times to settle a simple phone billing issue.
2.2.3 Slow dissemination of new products information to customers
DiGi lacks marketing activities which delays the dissemination of new products
information to publics (DiGi, 2012). As a result, the lack of information has caused DiGi to lose
out on potential customers and market share.
2.3 Identification of opportunities
2.3.1 Globalization
The world is now borderless due to technological advancements causing an increase in
global movements and interactions of people, goods and services (Najam, Runnalls & Halle,
2007). Globalization has provided DiGi with an opportunity expand their business reached in
order to provide a platform to meet these demands.
2.3.2 Higher standard of living
The rising standard of living in Malaysia is increasing the demand for telecommunication
devices. According to the 2012 Household Income Survey, the average monthly household
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salaries have risen by 7.2% since 2009 (Borneo Post Online, 2013). It has become common for
people to own at least one mobile device providing DiGi an opportunity to increase sales
revenue.
2.3.3 Influx of foreign workers and international students
According to national statistics, the influx of foreign workers and international students is
increasing. Since 2011, there are 1.5 million foreign workers and 90,000 international students
and continuously rising (Chi, 2011; Zakariah, 2013). Ministry of Higher Education aims to
attract at least 200,000 international students to education institutions in Malaysia by 2020 (Chi,
2011). Foreign workers seek low international calling rates while international students demand
cheap mobile internet service to stay connected to with their loved ones back home providing
DiGi an opportunity to enter this new market segment.
2.4 Identification of threats
2.4.1 Government regulations
According to Deputy Prime Minister Muhyiddin Yassin, Malaysia's Education Ministry
will continue to ban mobile phone usage in schools (The Straits Times, 2012). The policy
decreased demand for mobile phones and less usage by students causing a negative impact on
DiGis sales revenue.
2.4.2 Industrial rivalry
Within the industry, Maxis, Celcom and DiGi continue to compete on product and service
differentiation
through
improvement
and
introduction
of
new
innovative
features
(MalaysianWireless, 2011). The need to gain and maintain competitive advantage over its
competitors might place a heavy burden on DiGis bottom-line.
2.4.3 Bargaining powers of suppliers
The telecommunications industry in Malaysia is dependent on imports for its network
components. Most equipment cannot be sourced locally resulting in high bargaining powers of
suppliers (MalaysianWireless, 2011). This has resulted in an increase in DiGis cost, hence
reducing profit margin.
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For the focus strategy, the ideal chain of command is where executives of each
departments report to the department manager while department managers reports to one general
manager as illustrated below. The general manager and department heads will have weekly
discussions to align their strategies to achieve the goal of being the leading Telco provider for the
growing foreign market, and each department will have their separate meetings to coordinate
their tasks. As stated by Parker and Ritson (2005), a clear chain of command ensures the smooth
flow of authority and integration among departments.
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instrumentality for psychological growth (p. 395). When employees are satisfied, it will
increase productivity and work quality. Hence, the prevention of job dissatisfaction by hygiene
factors and the enhancement of job satisfaction by motivators allow DiGi to successfully
implement the strategy.
5.0 Conclusion
DiGi Telecommunication has several internal and external influences that effect the
organization. Hence, strategies need to be imposed to address these influences to improve the
organisations overall position. The appropriate strategy to implement is the Low Price Plan
focus strategy which targets the international students and foreign workers, a growing niche
market in Malaysia. For successful implementation, the organising and leading aspects have to
be set to ensure a smooth flow of execution. This will bring more profits and growth to the
business of DiGi Telecommunications.
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List of Tables
Table 1: Comparison of Maxis, Celcom and DiGi price plan for iPhone 5S..................................3
List of Figures
Figure 1: Departments of DiGi in implementing the focus strategy.............................................10
Figure 2: Ideal chain of command for the focus strategy..............................................................11
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