Strategy Analysis of Pldt

Topics: Telecommunication, Strategic management, Mobile phone Pages: 31 (6648 words) Published: April 15, 2011
Executive Summary

Being the largest company in the Philippines, The Philippine Long Distance Telephone Company (PLDT) provides a wide range of telecommunication services, including fixed line, cellular and broadband services. For the past few years, a revolution has taken place in the telecommunications industry and the PLDT dominance in the industry has been threatened. Competing in a maturing industry, Revenue growth for PLDT has been stagnant for a few years and revenues decline for the first time in 2009. The future outlook is not prospective for PLDT either, as competition will be intensified by a change in government attitude in promoting market liberalization in the telecommunications industry. The current situation and the dimmed prospects facing PLDT have led to a 22% drop in share price as investors and shareholders fear that they could not achieve reasonable rates of return for their investment in PLDT.

To regain investors’ confidence, we propose PLDT to integrate the services in mobile, fixed voice and data. This strategy, when implemented, will minimize the negative effect of revenue cannibalization. In addition, it will put PLDT in a better position to capture the advantage of the rising availability of PCs and arrival of faster internet access phones in the intermediate term and become more attractive to outsourced companies in Philippines. Finally, it will enable PLDT to exploit positive synergies among existing business units, exploit Long Tail opportunities and be well poised to progress and tap onto the opportunities presented by the diminishing boundary between technology, media, and telecommunications (TMT) industries.

Executive Summaryi
Introduction of the Company1
The Problem2
Strategic Audit of the Industry3
Key Success Factor for the Industry3
Trends in Business Environment4
Porter’s 5 Analysis5
PLDT’s Current Strategy6
Vision and Mission Statement6
PLDT’s Current 4-pronged Strategy7
External Factor Evaluation8
Strategic Audit of Company8
Value Chain Analysis9
Internal Factor Evaluation13
SWOT Profile14
Strategic Issues15
IE Matrix17
Strategic Alternatives17
Strategic Alternative 1: Develop & Offer Integrated Communications Solutions17 Strategic Alternative 2: Provide Free Wireless Internet Service19 Strategic Alternative 3: Pre-Install Broadband Microchips in Laptops and PCs21 Recommendation23

Positive Ramifications24
Financial Capabilities27
Corporate Culture28
Business Process Management28
Appendix 1: Porter’s 5 AnalysisI
Appendix 2: Resource Based AnalysisIII
Appendix 3: Value Chain AnalysisVI
Appendix 4: Strategic Factors Analysis SummaryVII
Appendix 5: Issues Priority MatrixVIII
Appendix 6: BCG MatrixIX
Appendix 7: Quantitative Strategy Priority MatrixXI
Appendix 8: Key Officers in PLDT’s Business Transformation OfficeXII Appendix 9: Extract from Report on the 2007 Operating and Financial ResultsXIII BibliographyXIV


Figure 1 Key Success Factors of Companies in the Telecommunication Industry3 Figure 2 Trends Affecting Business Environment of Telcos in Philippines4 Figure 3 Porter's 5 Forces of Telecom Industry5

Figure 4 EFE Matrix8
Figure 5 Value Chain of PLDT9
Figure 6 Financial Strength of PLDT vs. Competitors10
Figure 7 Management Effectiveness of PLDT vs. Competitors11 Figure 8 Profitability of PLDT, Globe, and Digitel11
Figure 9 IFE Matrix13
Figure 10 SWOT Profile14
Figure 11 IE Matrix17
Figure 12 BCG MatrixIX
Figure 13 Wireless Market Share by Subscribers (June 2010)IX Figure 14 Forecasted PLDT Broadband Market ShareX
Figure 15 Forecasted BB Contribution to Total RevenueX
Figure 16 Fixed-Line Market Share by Subscribers (2007)X
Introduction of the Company

Philippine Long Distance Telephone Company (PLDT) is a domestic and international telecommunication services provider headquartered in...

Bibliography: Business Monitor International. (2011). Philippines Telecommunications Q2 2011 Report. London: Business Monitor International.
Campbell, G. (2010). Global Wireless Matrix 1Q10. Bank of America Merrill Lynch.
Fitch Ratings. (2010, December 10). Reuters. Retrieved March 2011, from FITCH affirms PLDT 's ratings, outlook stable:
Philippine Long Distance Telephone Company. (2010). Full Year 2010 Financial and Operating Results.
Philippines Long Distance Telephone Company. (2010). Annual Report 2009.
Philippines Long Distance Telephone Company. (2011). SEC Form 17-C.
Santiago, J. (2010). Upgrading to Neutral on underperformance. UBS Investment Research.
Wikipedia. (2011, February 19). Wikipedia. Retrieved March 2011, from Provisioning:
Yahoo Finance
[1] (Philippine Long Distance Telephone Company, 2010)
[2] (Philippine Long Distance Telephone Company, 2010)
[3] (Yahoo Finance)
[4] (Philippines Long Distance Telephone Company, 2010)
[5] (One Source)
[6] (Philippines Long Distance Telephone Company, 2010)
[7] (One Source)
[8] (Philippines Long Distance Telephone Company, 2010)
[9] (One Source)
[14] (Peter, 2010)
[15] (Business Monitor International, 2011)
[16] (Peter, 2010)
[17] (Campbell, 2010)
[18] (Investopedia, 2011)
[19] (Alava, Pike, Lorenzana, Petines, Camus, & Relatado)
[20] (Campbell, 2010)
[21] (Alava, Pike, Lorenzana, Petines, Camus, & Relatado)
[22] (Peter, 2010)
[23] (Campbell, 2010)
[24] (Philippines Long Distance Telephone Company, 2010) unless otherwise stated
[25] (Santiago, 2010)
[26] (Philippines Long Distance Telephone Company, 2010)
[27] (Nazareno, 2008)
WONG Zyue Xhien | F1791439K
Figure 13 Wireless Market Share by Subscribers (June 2010)
Figure 16 Fixed-Line Market Share by Subscribers (2007)
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