BUS317D Strategic Management StarHub Ltd SAVED Presentation

Overview
1. Background of Company 2. Challenges / Problems Faced 3. Directional Strategy
Growth Strategies Option

4. Defensive Strategy

5. Portfolio Strategy
S.A.V.E.D

6. Strategy Statement

7. Conclusion

Background of
Established in 1998, StarHub owned a new generation, integrated broadband information-communications network that is principally fibrebased which gave them the ability to provide a range of telecommunication services, including mobile, fixed-line and internet (formally known as Cyberway) to both residential and corporate markets. Back then, only Singapore Cable Vision (SCV) provided cable television and cable modem services, because of the extensive broadband network construction that was completed in 2000. It was back then a new technology, and SCV has plans to introduce cable telephony to compete with the players then. After final considerations by StarHubs shareholders in 2001, StarHub eventually bought SCV for a hefty sum of S$74 million from Singapore Press Holdings (SPH) and this gave StarHub the ability to include cable services in their portfolio.

Today
Mobile network : provides 4G, 3G and 2G services

Owns island-wide Hybrid Fibre-Coxial network that delivers multi-channel pay TV services
Broadband services for both residential and businesses.

Fixed voice services for the home and office

Challenges / Problems Faced

Tight competition: Rivals Singtel and M1 who offer similar services to same targeted customers Shared wireless coverage: M1, Singtel and Starhub are available all across Singapore The need to increase market share Need to retain/hire workers that enjoy working for you and enjoy being a customer of The need to develop new areas of opportunity to increase competitiveness To build consumers confidence !

Directional Strategy
Directional strategy

Mission And objectives

Portfolio strategy

Parenting strategy

Directional Strategy
Concerned with the firms orientation towards growth 3 Options
Growth Strategies Stability Strategy Retrenchment Strategy

Directional Strategy
Decision 1 Decision 2

Internal or External

Concentration Concentric Conglomerate

Same industry value chain Related Industry Value Chain Unrelated industry value chain

Decision 3 Vertical Horizontal

Defensive Strategy
Defensive Strategy Focus primarily on customer retention and optimize position in market share
Offensive Strategy Expand market to become global player to achieve the greater profit

Defensive Strategy
StarHub Reward Points StarHub Reward Points are issued to all active StarHub consumers upon successful payment of their StarHub charges & payments. StarHub can expands its customer loyalty programme in collaboration with Caltex (Thanks! Rewards Program) Caltex Thanks! Card Earn 1 Thanks! Point per Litre pump Earn 10 Thanks! Points per StarHub monthly bill Earn 10 StarHub Reward Points per Litre Pump

Portfolio Strategy

Services Market Shares Growth Rate Segment Value ($m) Contribution Market Revenue

Mobile 28% 2.8% 1,123.93 56.00% $314.70

Pay TV

Broadband Fixed Network Total 78% 17% 5% -7.9% -1.2% 2.3% 122.56 362.94 1,800.00 17.01% 10.98% 16.01% $95.60 $61.70 $90.00 $562.00

Portfolio Strategy
STARS (NIL) High Market Share & High Market Growth Well-established, and these are fantastic opportunities

Portfolio Strategy
CASH COWS (Pay Tv)
High Market Share & Low Market Growth Well-established. However, the market isnt growing and your opportunities are limited

Services Market Shares Growth Rate Segment Value ($m) Contribution Market Revenue

Pay TV 78% -7.90% 122.56 17.01% $95.60

Portfolio Strategy
DOGS (Broadband)
Low Market Share & Low Market Growth Market presence is weak. Its going to be difficult to make a profit.
Services Market Shares Growth Rate Segment Value ($m) Contribution Market Revenue Broadband 17% -1.20% 362.94 10.98% $61.70

Portfolio Strategy
QUESTION MARKS (Mobile & Fixed Network)
Low Market Share & High Market Growth Opportunities that no one knows what to do with. Require serious thought as to whether increased investment.
Services Market Shares Growth Rate Mobile Fixed Network 28% 2.80% 5% 2.30% 1,800.00 16.01% $90.00

Segment Value ($m) 1,123.93 Contribution Market Revenue 56.00% $314.70

Portfolio Strategy - SAVED

Staging

Retain and increase PAYTV market share; Increase market share of Broadband, Mobile & Fixed network Stage 1: Invest to improve products and services Stage 2: Invest in advertising and brand-building Stage 3: Invest in Customer Retention Programs

Arenas
Offering a full range of information, communications and entertainment services for both consumer and corporate info-communication markets in Singapore

Vehicle
Organic, Internal development of info-communication products and services

Portfolio Strategy - SAVED

Economic Logic
Premium pricing and Preferred PAYTV service provider status Competitive pricing for other info-communication products / services (Broadband, Mobile & Fixed Network)

Differentiator
Reliable products & services; Attractive & Competitive prices; Excellent customer care services; Attractive rewards system

StarHubs Strategy Statement

To grow and become the top and best local infocommunication service provider in the next 5 years by providing expanded professional services together with excellent work ethics to cater both consumers and corporate customers needs. (35 Words)

Summary & Conclusion

Background of StarHub
Challenges / Problems StarHub faced

3 Strategies
1. Directional - Growth Strategies Option

2. Defensive
3. Portfolio (S.A.V.E.D)

Starting point of analysis, not the end point

Focus on the process by asking the right questions

 Portfolio Strategy (BCG Matrix)

STARS (NIL) CASH COWS (Pay Tv)

Summary & Conclusion

DOGS (Broadband)
QUESTION MARKS (Mobile & Fixed Network)

StarHubs Strategy Statement

Objective : Begins with a definition / goal of the end that strategy is designed to achieved and is measurable Scope : Where company will operate and who is the target audience

Advantage : What StarHub do differently from its competitors to achieve their

objective