Airtel Expansion in Africa

INTERNATIONAL BUSINESS
Case Analysis on:
“Bharti Airtel in Africa”
PGDM Batch: 2018-20

Term: III
Submitted on 27th February 2019
Submitted By: Group A10 Submitted To:

Abhinav Pinglay 18002 Dr R Sugant
Juhi Prabhu (SEP) 18013
Sankalp Jain 18024
Bellurkar Vijay 18036
Souparnika HP 18046
Thejas Urs 18047
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Q1. Map Bharti Airtel’s Indian activities onto Porter’s value chain.
SUPPORT ACTIVITIES
Firm Infrastructure:
 Network Tower set up, IT infrastructure, telecom gadgets and gears, networking offices
and various IT/IS installations to provide services
 Security Unit to ensure security and privacy to network users
 Technological experts to keep transforming and enhancing the operations
Human Resource Management:
 Hiring IT savvy workforce, telecom operators and technological experts

 R&D employees to research on the sector to enhance the services
 Well-trained customer relationship managers to deal with direct customers
 B2B marketers to widen the network in B2B industry and to negotiate with distributors
Technology Development:
 Improving and increasing Band width of the network to widen the customer base
 Improving call and internet quality and connectivity by moving from 2G to 3G
 Providing tech services to customer as a value add like e-wallets, music and payment
banks etc.
Procurement:
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 Long and enduring partnerships and tie ups with partner firms and agencies.
 Outsourcing the activities eventually helping in reduction of cost and improving
services
 Solid production network for continuous supply of sims
PRIMARY ACTIVITIES
Inbound Logistics:
 Procuring and storing sim cards from production facility

 Software and essential technical assistance to start services
 Gadgets and Capital equipment
Operations:
 Developing and customizing Sim Cards

 Customizing software as per the requirements of network
 Maintaining service level in call and internet quality
 Maintaining network and operation time to time
Outbound Logistics:
 Distributing sim cards from plant/firm to various distributors and retailers

 GSM and CDMA services
Sales and Marketing:
 Market research for their product

 Making customer aware of the technology
 Unique sales and advertising
 Improving and enhancing their services to be differentiated
 Making good relations with customers in B2B and B2C
Service:
 Customer support and Customer care

 Opening new outlets and expand network
 Technical assistance for any queries
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Q2. Explain how Airtel India configured the value chain?
Primary Activities:
1. Research & Development

 Focused on customers using prepaid plan
 Outsourcing operational activities
2. Product
 Introduction of lifetime prepaid card for customers
 Provided services to unrest areas of Jammu & Kashmir and became first
operator to do such
3. Sales and Distribution
 Offered sim cards and recharge coupons through phone booths, grocery shops,
mobile repairing shops and other small retail stores
 Using “Match-Box” strategy to reach highest number of customers
 Adapting ‘two layered’ and ‘three layered’ distribution model for urban and
rural areas respectively
 Tie ups with post offices in Kerela state- and state-owned Indian Oil
 Tying up with SKS micro-finance by providing free sim cards to their
members.
4. Promotions
 Provide training to the distributors and retailers to teach customers regarding
mobile phone usage
 Free sims to SKS
Supporting Activities:
1. Information Technology: Outsourced and IBM and Mphasis for installing and
managing software for call centre
2. Human Resource: They had their expats who transfer their knowledge and help local
workers and train graduates in IT and Network
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Q3. Did Airtel’s strategy of similar configuration of value chain in Africa
succeed? Justify your answer.
When Bharati cellular started in 1995 under the brand name Airtel, it was the first mobile
telephony service in India. Elements were that of family business.
Whereas, Airtel Africa had a major competitor MTN (1994) with 45% market share and 60%
revenue. Public Investment Corporation was the major shareholder because of which the
chances of trust amongst the people towards the company would have been more. Airtel did
not have the first mover advantage as in India. Their competition strategy should have been
changed accordingly.
A lot of other challenges that Airtel Africa were facing are as follows:
Talent shortages
 Primarily Kohli wanted Africans to run the business in Africa. But due to limited
skilled people in Africa, it was difficult to get the whole team ready in a short period
of time.
 Indians expats were sent to Africa – for the experience
 Training program was started by the company.
Cultural Challenges
 Indian style of workplace communication differed from Africans.

 Africans was more of concerned of their working environment.
 Due to misunderstanding, Africans thought Indians wouldn’t collaborate.
Rising cost
 No proper infrastructure – this led to rise in supply chain cost.

 No strong manufacturing industry.
 Low per capita income continent.
Outsourcing Obstacles
 Africans thought outsourcing happened very quickly.

 Employees were moved to IBM, Nokia and Ericson. Some were moved to less-known
companies, which led to accusation from Nigeria labour congress.
 Time consuming to achieve their KPIs.
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Multiple countries:
- Africa is much more complex than Africa in diversity unlike single government,
single PM, single official language.
- Dealing with multiple regulators, multiple import duties
- Absence of double taxation avoidance which is one of the main costs saving
component for MNC’s.
- More customisation required in marketing, unlike India where people are connected in
some way because of the TV shows at least.
Distribution Monopolies:
- Very few large financiers distributed goods, thus more power resided with them,
unlike India where thousands of distributors served millions of outlets.
Customer Challenge:
- Difficulties in changing the customer habit with low tariffs

- Existing Competitors in the m-commerce
Inelastic demand:
- Price wars led to keeping the demand at the almost the same level whereas the costs
kept on increasing and neither did the revenue increased.
Strong Competition:
- Competition in terms of tariffs and new services
The Case study suggests us that, even if the demography, culture in a broad view, positive
support and respect to the host country is available by the home country, there are a lot of
operational issues that have to be looked upon carefully, as this is what is important in
maintaining the costs at a low level and in supporting all the other functions of the business.
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INTERNATIONAL BUSINESS

Case Analysis on:

“Bharti Airtel in Africa”

PGDM Batch: 2018-20

Submitted on 27th February 2019

Submitted By: Group A10 Submitted To:

Human Resource Management:

 Hiring IT savvy workforce, telecom operators and technological experts

 Procuring and storing sim cards from production facility

 Developing and customizing Sim Cards

 Distributing sim cards from plant/firm to various distributors and retailers

Sales and Marketing:

 Market research for their product

 Customer support and Customer care

1. Research & Development

 Indian style of workplace communication differed from Africans.

 No proper infrastructure – this led to rise in supply chain cost.

 Africans thought outsourcing happened very quickly.

- Difficulties in changing the customer habit with low tariffs

- Competition in terms of tariffs and new services

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