Discuss about the Strategic Management of Spark New Zealand Limited.
This report focuses on the strategy formulation and implementation in an organization. The report describes various level of strategy which will be used to improve the performance of the company in the operating market. For the discussion, the company Spark New Zealand Limited has taken. All the data has taken from the secondary research i.e. from books, journal and other source of information. It is well known that proper strategy is important for the success of the company (Hitt et al, 2009). By the effective strategies, the company will be able to attract more and more customers in the operating market. This report should be present to the top management while company is trying to increase its customer base in the operating market. The discussion of appropriate strategy and implementation for the company Spark New Zealand Limited is described below.
Spark New Zealand is a telecommunication company of New Zealand providing phone services, strong network and internet service supplier. It is also a major ICT supplier to New Zealand businesses. It is a public traded company since 1990. It is one of the major companies of New Zealand in terms of value. The company is also a part of New Zealand telecommunications business (Bloomberg, 2017). The company was found from a division of New Zealand post office in 1987 and privatized in 1990. The company was divided into three divisions by central government- telecom retail, telecom wholesale, Chorus. Later on, in 2011 Telecom and Chorus become separate listed companies and on august 8, 2014the Company changes its name to Spark New Zealand. The company provides service through three segments i.e., spark home, mobile and business; spark digital and spark connect (IBIS World, 2016). The spark home, mobile and business segment provide mobile and internet services to customers and to small medium business market.
Spark New Zealand is the largest service provider of telecommunication services in New Zealand. Their products and services include value which is creating offerings to all industries around the world. The vision of the spark telecom is to become the partner of choice delivering combined value adding services that increases telecom experience.
The company also has a mission of connecting and empowering people and communities which help in the development of New Zealand through developing telecommunication centers of excellence for developing creative jobs.
The spark digital has objective to provide telecommunication services to and converged information and communication technology to its customers. The aim is to be connect segment includes its network and IT operations and provide services to wholesale and international customers. The company has objective to provide a wide range of telecommunication, broadband services and internet television; IT services, equipment sales and installation services (Reuters, 2017).
PESTEL analysis for the company Spark New Zealand Limited is described by six factors in the analysis i.e. political, economic, social, technological, environmental and legal. PESTEL analysis for the company is as follows:
Political factors
The political forces related to the telecom section include those ways by which the government obstructs in the activities and actions of the company. There are various laws imposed by the government and the company is abiding with them. The laws are imposed on the tariffs and products offered by the company. All the new and existing product and technologies offered by the company need to follow the set of rules and regulations imposed by the government (Mansell, 2006).
Economic factors
There are some economic factors which affect the business activities of Spark New Zealand Limited in the country. The factors i.e. economic growth, inflation and interest rates impact on the operations of the telecom company. For the growth of the telecommunication company, the economic condition of play an important role in the business activities. Major factors that are affecting the growth of Spark New Zealand Limited are the changes in the inflation rates, allocation of funds for development of infrastructure and cost of new licensing etc. Based on the analysis, it is observed that revolutionizes in the money exchange rate also have significant impact on the development of the services in the company. Along with this, there is the high level of competition in the country. Other telecom companies are providing same services at optimum rate which is the big challenge for the Spark New Zealand Limited. To upgrade the services like 3G and 4G, the company requires high amount to get economic stability which is very essential. It is observed that the changes in economic conditions have a major impact on the products and services of the company.
Social factors
The social factors include population and their living style in the country. In the country New Zealand, 90% of people are sophisticated and having common sense. So, the telecom sector is providing regular services at the most favorable prices. Top administration of the company is using this factor by providing high quality services to the customers and gaining competitive advantage in the market. Along with this, company is also focusing on the working and business class people to encourage the market (Blankson et al, 2009). Company is planning to provide effective services by using the values and culture of the customers. Further, company is focused on the marketing and advertising activities by understanding the perception and social belief of the New Zealand market to improve its sales. This type of strategy is helping Spark New Zealand Limited to attract the customers and enhance the number of customers by creating social appeal (Taghizadeh et al, 2013).
Technological factors
It can be seen that there is continuous improvement in the tools and techniques to improve the more effective telecommunication services and network. For Spark New Zealand Limited, it is also a challenge for the company to implement new technology and upgrade of existing infrastructure in the country. Based on the evaluation of products and services of the company, it is analyzed that quality and modification in the services always have the positive impact on the business. Implementation of new technology i.e. GPS, Wi-Fi, and internet calling is important to meet the benchmarking standard in both local as well as international market. Along with this, the cost of implementing and developing the technical tools is very high which will impact the cost incurred in the services that the company is providing to the customers. This is a significant aspect which has significant impact on the development of the company in telecommunication sector. There is the need to be focused on the technical development parts by the top management of company to provide better services for positive business outcome (Schilling, 2010).
Environmental factors
The ecological factors i.e. global warming and climate change always affect the business of Telecommunication Company. These factors affect on the process to of reach the telecommunication products to the customers. Apart from this, in terms of employment and technology advancement, there is the need to adapt the change by the employees. Spark New Zealand Limited always encourages the customers to dispose the accessories and handset safely by the settlement of recycling program (Taylor et al, 2012).
Legal Factors
The legal factors include the rules and regulations imposed by the government of the country. Legislation framed by the government of the New Zealand and those regulations affect the business of telecommunication industry. The legal framework of New Zealand includes the rules related to the taxation and interest rates for the telecom industry. The taxation policy has the significant impact on the business process of Telecom Company in the country. The telecom company has to follow the rules framed by the government of the company as these rules are in favor of the business as well as country (Halbert & Ingulli, 2011).
The corporate level strategy of Spark New Zealand Limited includes four pats i.e. finance, HR, sales and IT and R&D.
For the growth and expansion, the company will establish new stores and new network stations to provide better quality services to the customers. The purchasing requires huge financial resources. Along with this, financial resources will also be needed in the promotional activities.
The support from human resource is very important from the perspective of the business execution. There will be full support from the HR would be in the form of skilled and talented people to perform the job role in the business. The expansion strategy the company includes new system and new stores and this would require additional employees across new regions. This will be effectively achieved by the proper HR functions of the company.
The adequate support would be required from the marketing and sales functions to provide the services across new regions. This would be important to make the customers aware about the new services in the new areas. The positive sales will be accomplished by the extra efforts in developing new offers for the customers (Hill, Jones & Schilling, 2014).
This function is crucial for the company to accomplish the corporate level strategy of the business. The role of technology is important in the telecom industry. The R&D function is helpful for the company to identify the best possible technology that can provide best possible quality in terms of mobile and network. The IT functions will allow the company to execute its strategy successfully (Ambrosini & Bowman, 2009).
In the business level strategy, there are some points which should be focused by the company Spark New Zealand Limited. In the business level strategy, there are four points i.e. strategic planning, business planning, and business development and risk management.
To operate the business successfully in the market, it is important for the company to have appropriate strategy for the business growth and success in the operating market. There should be some strategies to set the priorities of the business in the company. The strategy should cover following area:
By these areas, the company Spark New Zealand Limited will be able to identify core areas and activities of the business. These set strategies are helpful to meet the business goals and priorities (Mooradian, Matzler & Ring, 2012).
In the business planning, the company Spark New Zealand Limited should identify the strategic priorities for the business operations in the operating market. Company should establish the suite of qualitative and quantitative KPIs for the growth of the business. In every six months, company has to analyze the business process to eliminate various issues. Along with this, the company should run a workshop for managers of the company so that they can deal with the various issuers in the business operations. The conducted workshops provide various opportunities for the employees in the business, effective strategies and share best practices (Wheelen & Hunger, 2011).
Further, Spark New Zealand Limited will use a Group-wide issue management process to make sure that various issues are managed in the long term planning of the company. The board of the company will ensure the strategic decision making process to deal with the new issues (Trott, 2010).
For the business development process, the company Spark New Zealand Limited has to consider the process of merger and acquisition (M&A). The company has to consider the business issues i.e. country of operations, local supply chain, environmental rules and regulations, and reviewing the policies and programs.
In terms of product development, Spark New Zealand Limited will focus on the strategies by which the company can meet the social needs of the customers. For example, social needs of the customers related to the network coverage (Sørensen, 2012).
In the functional strategy, there are four strategies which should be focused by the Spark New Zealand Limited in the business operations. The strategies for the company are as follows:
For the company Spark New Zealand Limited, the long term marketing strategy can be implemented by the careful planning and successful marketing mix. Marketing mix for the company is as follows:
Product- Product includes features and benefits of the offered goods and services,
Price- This includes the cost of the products and services at which the customer can buy them,
Place- This include the marketplace where the products and services can be purchased,
Promotion- This includes the marketing and advertising strategies by which the customers can be aware about the products and services (Mullins, 2010).
Products include various features which are provided by the company to the customers. The products include the opportunity to play games, chats, send and receive the pictures, information about sporting events, taking the billing information and view the video clips etc. The Services offered by Spark New Zealand Limited are as follows:
The objective of the company Spark New Zealand Limited is to make the services available for the customers as much as possible. The services can be made available for the people by the high powered business executives to more mature business users. So, the company will offer various pricing structures based on the various customer groups. Along with this, there will be monthly price plans available as well as prepay options. Phone users can pay their bills by the internet and online payment methods. Further, the reward system will also be there on the calls, text messages, ring tones and picture messages (Grönroos, 2007).
For making the product and services available to the customers, it is important for the company to create a suitable market place. For the company Spark New Zealand Limited, company will focus on opening more stores in the country. The objective is to open around 300 stores in the each city of the country. Along with this, the company can also sell its products by the independent retailers. At the stores of the company, there will be sales person who will ensure the needs of the customers are matched with the right product and provide the various options to the customers if available.
Advertising and promotion activities are important for the growth and success of the products in the market. Spark New Zealand Limited use effective promotional activities to attract the customers for the sales of the innovative products. In case of the promotional activities, company should work with the icons to communicate its brand values with the customers. There are other promotional strategies which should be adopted by the company i.e. advertisements on TV, on billboards, in magazines and many other media outlets which can be reached to the large audiences. Advertisements on these media outlets will be helpful for the company to spread the brand image and message of the company very effectively. This is known as above the line promotion. Further, stores of the company should have special offers, point of sales posters and promotions to attract the customers. In improving the brand image of the company, the stores, products and the staff of the company can be very useful. Along with this, company has to develop good public relations by the press releases in the national newspaper and magazines to explain about the new products and services (Vieceli & Valos, 2011).
To create the effective strategies for the company, it is important to analyze the internal and external marketing environment of the company in the operating market. The analysis can be done by the SWOT analysis of the company. The SWOT analysis for the company Spark New Zealand Limited is described below-
Strength:
Weakness:
Opportunities:
Threats:
Recruitment and orientation-
For the growth of the company in the country, it is important to have effective and well trained staff to perform their duty in the business. This is one of the areas which need improvement. By the effective policies of human resource management, company can have effective staff in the business. By the aggressive acquisition, Spark New Zealand Limited can increase the number of working employees within the company. This can be achieved by the number of HR policies and the standardizing these policies and practices (Leopold, John. & Harris, 2009).
At the global level, it is crucial to provide induction training to all the new employees by the workshops which will talk about the policies of the company. Further, the company will also conduct an annual employee survey that will include about whether the company is generating trust and properly managing its environmental impact. The company will seek the approval of the employees on what they are doing. The employees report will be highly motivated due to the initiatives of the company. The website of Spark New Zealand limited will also be used to collect the information and ideas from the employees (Courtney, Marnoch & Williamson, 2009).
Training-
For the successful business operations, it is essential to deliver a variety of global training to the new employees by the use of e-tools such as e-module. Spark New Zealand Limited will try to develop a set of new indicators to identify the number of employees who have received the training. The company will also include training for the managers. A session will be included in the global management development program for the senior managers. Spark New Zealand Limited will focus on working at the standardizing processes related to the training process for the employees. There will be learning training course on the business principles for all the employees. If the company will get success in the training session, then this would be rolled out across all the local operating companies (Brady et al, 2007).
Competitors of Spark New Zealand Limited
Competition in the telecommunication market has also increased with the entry of many new companies in the communication market. One of the major competitors of Competitors of Spark New Zealand Limited is Vector communication Limited. This company has high-capacity optic and extensive network in all over the country. The company Vector is operating in the wholesale market. Further, another competitor for Competitors of Spark New Zealand Limited is Kordia Limited which is known as Broadcast Communication Limited. The company operates a wireless network in the market. Spark New Zealand Limited has to deal with these competitors by the innovative technologies.
Strategy Development & Choice
To get effective position of the business in the country, Spark New Zealand Limited has to develop some effective strategies. By evaluating the current strategic choices, and analyzing the position in the industry, the company can be able to form a future strategy. The strategic choices are related to the business strategy, strategy methods and strategic directions. Some methods can be used to form the current and future state of the company. The company will use some generic strategies i.e. cost leadership, differentiation strategy and focus. Strategies for the company Spark New Zealand Limited are as follows:
Cost leadership
Aim of this strategy is to gain competitive advantage by being the lowest cost provider in telecom industry including the number of ‘included minutes, text and data’. The aim of this strategy is to sustain the infrastructure. The focus of the company is to maintain the profitability in the competitive environment. Under this strategy, the company will be able to sell the products below average industry prices to earn higher profit as compared to the competitors. to be a successful company in the telecom sector, the company has to compete on the cost of products and services with retaining the existing and attracting new customers. This objective can be achieved by cutting down the cost. This strategy would be beneficial where the target market is price sensitive (Johnson, Whittington & Scholes, 2011).
Differentiation strategy
The objective of differentiation strategy is to achieve the competitive advantage by creating unique product or service by company that is valued by the customers. Differentiated products or services are able to satisfy the requirements of the customers by the sustainable competitive advantage. By the differentiation strategy, Spark New Zealand Limited has to bear additional costs to create their competitive advantage. By the unique services and products such as 4G, Total communication (fixed, mobile and TV), company will add more value for the customers. Customers always value high speed network and latest new unique mobile and they are always willing to spend those products or services. But there are risks involved with this strategy i.e. customers can become price sensitive and can chose on price rather than uniqueness (Cole, 2013).
Focus strategy
The competitive advantage is generated specially for the niche. The company follows the generic strategy to enjoy high degree of customer loyalty. Spark New Zealand Limited can either use a cost focus or differentiation focus. Telecommunication Company is always focused on developing new methods of innovations in the communication so that it can bring new service to the market i.e. mobile money transfer and Ease of shopping (Danso, 2014).
To get success in the telecom market, it is important for the company to implement the strategy after the strategy choice. Spark New Zealand Limited will focus on the marketing plan to get the success in attracting thousands of new subscribers with its current approaches. The company will focus on the messaging and advertising strategies to attract the customers. To implement the strategy, company will focus on the two basic approaches i.e. organizational change approach and collaborative approach (Rothaermel, 2013).
Organizational change approach- Under this approach, managers assumes that good strategy must be implemented to achieve the set goals and objectives. For this manner, company will focus on the required change in the business operations. The company Spark New Zealand Limited will focus on the appropriate changes in the personal, structure, reward system and information to improve the performance of the company in New Zealand market.
Collaborative approach- Under this approach, top managers of the company take in charge of the strategy formulation. Other members of team contribute with their point of views to implement the strategy. Spark New Zealand Limited will include the top management to develop an effective marketing plan so that the company can attract more and more customers. All the managers will be involved in implementing marketing tactics for the strategy formulation (Freeman, 2010).
In Spark New Zealand Limited, strategy implementation includes some resources i.e. physical resources, and financial resources.
Physical resources
To implement the strategy for successful business, there is the need of physical resources in the company. The resources will include location of the stores, investment and maintenance requirements, quality services, marketing process, distribution channels, and use of information technology (Alkhafaji, 2011).
Human resources
Nest resource is human resources which is important to hire skilled people in the business. To implement the business strategy successfully, the company focus on the number of staff by location, function, experience, standard of training, and changes required resources like change of location, change in services etc.
Financial resources
Last one is financial resources which is crucial to finance the chosen strategy. Strategy needs to be carefully managed from a finance point-of-view. In the company, financial resources include shareholder capital, working capital, creditors. Effective use of financial resources will improve the relationship of the company with existing investors (Duncan, & Moriarty, 2007)
There are some recommendations for the company Spark New Zealand Limited for the effective strategy implementations. The recommendations are as follows:
Conclusion
From the above discussion, it is analyzed that the company Spark New Zealand Limited is famous company of telecommunication sector in New Zealand. The company is doing well in the market but there is strong competition in the market. By the above discussion, it is clear that by the proper strategy formulation and implementation, company will be able to get the desired position in the telecom market of New Zealand.
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