Telecommunications play a vital role in the development of an economy as well as for the companies in the local or global market. Today, in the global market of telecommunications industry there are quite handsome number of players / companies which are struggling to be the leader in the world market in every segment such as carrier, enterprise, submarine cables etc. Every telecom company appoint their best employees with a high budget to make an exceptional strategy for the company to increase their revenue figures and to beat up the competition which can be through multiple ways such as mergers & takeovers, strategic alliances etc.
A company’s central strategy can be divided into financial and marketing strategy which differs at various times for various markets. But at all times it must give a positive result else the company may have to suffer major loss in which may further result to downfall of the credibility/goodwill in the market. Tata Communications Ltd (formerly known as VSNL ltd), a part of $67. 4 billion Tata companies, was formed in 1986 and is the chief global provider of networks with a preeminent leadership position in the emerging markets and with the market capitalization of $1.79 billion.
After taking over Vsnl in 2002, the company is targeting to make global foot prints by takeovers, acquisition, strategic alliances etc along with the advancement of technology. Problem analysis: Tata Communications Ltd has changed its position from the year 2002 after acquiring the company from the Govt. of India. Being a Domestic company till 2002, TCL wanted to gain a global position in the business of telecommunications. To attain this TCL there were some major changes in the strategies designed for the company to become a key global player.
The strategy applied had to achieve the AIM was successful but on the other hand there were also some side effects for TCL. As per the article in tele-net on 15th June 2010, Tata Communication’s Ltd is steadily expanding its global reach to markets such as Middle East, Africa and Europe. This is one of the remarkable journey for the erstwhile government telecom company, Tata Communications Ltd (formerly VSNL – Videsh Sanchar Nigam Ltd) to expand its market globally.
This is claimed to be one of the strategy of TCL, as TCL publicly declared that “it would seek more acquisitions to expand it networks and the range of services on offer to customers. But there has been some drawback as well by adopting this strategy as it resulted in net loss for the financial year ending 2008, 09, 10, and 2011. After the declaration of the financial result of 2011, the statement given by Vinod Kumar, Managing Director & CEO of TCL was “Over the past few years, we have focused our investments on building and strengthening our global assets, services and capabilities which has impacted profitability.
Our focus now is to put the business on a firm path to profitability, driven by growth in our enterprise business, growth in new segments like cloud computing, improved performance at Neotel and a sharp focus on costs”. Significance: This assignment will give me more exposure of telecom industry; the objectives of the assignment will also help me to gain knowledge of the strategy and its implications in relation to the financial aspects of the company, this will in turn improve my and company’s decision making process.
Scope: In this assignment, TCL will be analyzed from the year 2002, i.e. after privatization of the company after which the Goals of the company were changed. Due to limited time and funds availability, there will be no personal interview (face to face) conducted with the finance and strategy team which sits in India – Mumbai Office.
Procedures (Details of Techniques, Data Collection, Data Recording etc. ) Research Philosophy: We will adopt pragmatist philosophy which will enable us the position to argue the most important determinant of our research. It will also support our practical approach towards the research.
Research Approach: Inductive approach will be used for this research as this approach will help us to derive to a particular outcome which we will reach at by analyzing the correct data. Research Strategy: We will use Grounded theory as our research strategy, as it suits best with our research approach and this strategy will also help us to predict and explain behavior of TCL’s Strategy and financial position. Research Choice: We will use multiple methods choice as it enables us to use both quantitative data as well as qualitative data. Both the data would be required to study the historical facts as well as current affairs of the TCL.
Time Horizon: The Research time horizon will be cross sectional studies as we will be taking a snap shot of the successfulness or the failure of the strategies applied and the financial position of TCL Data Collection: Both Primary and secondary source of data collection methods will be used as it will provide the current as well as the historical information required for our research. Primary Data will be collected by conduction interviews with the personnel of TCL. Secondary data will through various Media’s such as newspaper articles, Internet, journals, data provider companies such as One Source, Data monitors etc.