Mtn Group Limited
Question 1: Why has MTN been successful?
MTN has been successful due to the following reasons;
1. TARGET UNDERDEVELOPED MARKETS: MTN has operation in 21 Africa countries and the Middle East. Cellular telephones were popular in Africa because of lack of land line telecommunications in many countries. This boosted the company’s revenue with 43% increase in 2007 resulting to after tax profit of R11.9 ($1.6) billion. MTN strongest growth was in South Africa and Nigeria.
2. OPERATING STRATEGIES: MTN relied on local talent in its operations in each of the Countries; as well have local shareholder participation in its national operations. In Cote d’Ivoire local shareholder participation has increased to 40%. Meanwhile MTN always maintain the controlling interest.
3. MARKETING STRATEGIES: MTN covered the rural areas in its marketing policies by going to the people, using vans in rural areas and selling its pre-paid phones at traffic lights. This strategy made MTN to serve both the poor and rich thereby increasing their market share.
4. LOCAL, REGIONAL, AND NATIONAL INVOLVEMENT: MTN is involved in so many corporate social responsibilities in the countries it operates. For instance the “21 day Y’ ello care” in Nigeria in 2007, the R5 million rand contribution to refugees who fled to South Africa. Such activities help reduce political risks, create awareness of the company, thereby increase market share, which in turn leads to high revenue generation.
5. OTHER SERVICES: MTN did not rely on telephone services alone, but incorporated other services like Data solutions, Blackberry, International Roaming, Banking, EVD, Mobile TV, Me2U, callerTunes, Broadband in Nigeria, and internet services.
QUESTION 2: Identify the Risks MTN Faces MTN having operations mostly in Africa and Middle East will face the risks and challenges of operating in emerging countries. Such risks include;
1. WEALTH DISTRIBUTION: In emerging