1. Telecommunication 2nd presentation
Professor: DR. Huang
Group members:汪欣樺 許哲維 莫瑞娜

2. SWOT
CPM
SPACE

3. SWOT O2 SWOT analysis Strengths-S Weaknesses-W Opportunities-O
1.Wide service coverage
2.Customer centricity
3.Low churn rate
Weaknesses-W
1.Decreasing ARPU
2.Complains of high prices
Opportunities-O
1.Inelastic demand
2.Booming market in 3G and 4G
3.Bargaining power
SO Strategies
2&3 Advertisement(Increase the value of company)
1&3 Sigh contracts(Year as unit)
WO Strategies
1&1 Increase price(Increase ARPU)
3&2 Total revenue increase since demand is inelastic
Threats-T
1.New competitors
2.Over competitive market
ST Strategies
1&3 VIP programs(Offer bonus)
2&1 Keep up with competitors by doing survey regularly.
WT Strategies
2&1 Diversification (economics of scope)
1&2 Low cost (Hire lower wages labours abroad )

4. S503
In modern socity,more and more people not just consider price or profit,with an eye to sustainable use they pay attation to environment,hope do harm to it as less as possible,o2 also put their idea into their industry,this is unique to their compepitor,02 is also Multi-nations corporations,they can bring their idea wordwide.changing more people.saving bad environment situation about earth.

5. W1T1
Solving by low cost strategy,this is in the poor time of economic cycle,people prefer low price, we can save cost by innovative method,use labor as less as possible.increasing ARPU .

6. CPM O2 EE Vodafone CSF WT(%) Rating Wt’d score EFE
Growth of E-commerce
0.15 2
0.3 4
0.6
Increasing demand for mobile services
0.4 3
1.2
1.6
Europe debt crisis
0.9 1
New competitors
0.45
Total
2.55
3.4
2.8

7. Increasing demand

8. Impact of Euro Debt Crisis

9. Issued bonds

10. O2 EE
Vodafone
CSF
WT(%)
Rating
Wt’d score
IFE
Customer base
0.25 2
0.5 4 1
Decline in ARPU
0.15
0.3
Market share 3
0.45
0.6
Cross-countries development
Total
2.6
3.25
3.1

11. Decline in ARPU

12. Strong customer base
In 2012, Telefónica UK had high commercial activity,
Thanks to the ongoing success of its “On&On” smartphone rates. This has led to a solid net add in contract customers, and keep churn rate extremely low.

13. On&On

14. Cross-countries development

15. SPACE Matrix

16. SPACE Matrix- O2 INTERNAL STRATEGIC POSITION
EXTERNAL STRATEGIC POSITION
FINANCIAL STRENGTH FS
ENVIRONMENTAL STABILITY ES
Return on Investment
Leverage
Liquidity
ARPU
Working capital
Cash flow
Total average score: 4 3 5
3.8
Technological changes
Rate of inflation
Price range of competing products
Barriers to entry
Competitive pressure
Price elasticity of demand
Risk involved in business -1 -2 -3 -6 -5
-3.4
COMPETITIVE ADVANTAGE CA
INDUSTRY STRENGTH IS
Market share
Product quality
Product life cycle
Customer loyalty
Technological know-how
-2.2
Growth potential
Profit potential
Financial stability
Resource utilization
Ease of entry into market
Productivity, capacity utilization +3 +4 +2
3.4

17. SPACE Matrix- Results FS Average is +23 ÷ 6 = +3.83
ES Average is -24 ÷ 7 = -3.4
CA Average is -11 ÷ 5 = -2.2
IS Average is +24 ÷ 7 = +3.4
Directional Vector Coordinates: x-axis: = =3.4 – 2.2= +1.2 y-axis: 3.83 – 3.4 = +0.43

18. SPACE Diagram
O2 should pursue AGGRESSIVE strategies

19. SPACE Strategies
The diagram above shows a not too strong but favorable position in all four dimensions and therefore O2 can follow an aggressive strategy.
Mobile accesses account for 86% of all revenue: product development for mobile services, attract new customers with innovative deals for mobile contracts.
Its financial strength can be considered as the key issue to be considering when formulating a suitable strategy. Its solid financial base allows O2 to come strong in a competitive industry, where they should continue to invest in innovation and sustain the current competitive advantage and continue to build market share.

20. Sale of Fixed-line telephony and Broadband: opportunity to focus on mobile internet service, expansion of 4G service.
Strong position in environmental stability: O2 can use its financial strength to finance growth strategies.
Expand market share: explore into foreign markets to increase market share.

21. Reference
O2 financial report 2012