1

The Open University of

Sri Lanka
Department of Management
Studies

1. PROGRAMME OF STUDY MBAHRM

W.M THAMARIKA DARMENDRI

2. STUDENT NAME &
721435148
REGISTRATION NUMBER

3. COURSE CODE STRATEGIC MANAGEMENT

OSP9336

4. TITLE MINI PROJECT

Registration No. 721435148

 2

REPORT OF

BUSINESS EXPANSION

DIALOG AXIATA PLC

Registration No. 721435148

 3

Table of Content

Title Page No.

Executive summery 4

1. Introduction 5

1.1 Data and voice communication Industry 5

1.2 Dialog Axiata PLC 6

2. SWOT Analysis for Dialog Axiata PLC 8

3. Identification of Industry Attractiveness for

Business Expansion of Dialog Axiata PLC 9

4. Identification of Suitable Strategies for the Dialog Axiata PLC 11

4.1Tows Matrix 11

4.2 Grand strategy matrix 12

5. Justification of Selected Strategies Dialog Axiata PLC 13

6. Recommendations and Action Plan 14

6.1 Recommendations to the Management 14

6.2 Action Plan 15

References 16

Registration No. 721435148

 4

Executive Summery

Data and Voice Communications Industry is continuously growing and changing. The Dialog Axiata PLC
is one of the significant service providers in Sri Lanka’s Data and Voice Communications Industry. This
report includes internal and external analysis of Dialog through SWOT, identify industry attractiveness
through Porter’s five forces, and create strategies for business expansion under TOWS and Grand strategy
matrix and then recommendations about business expansion to management with action plan.

Registration No. 721435148

 5

1. Introduction

1.1 Data and voice communication Industry

Data and Voice Communications industry is undergoing fundamental and rapid changes. The
transformation of the sector from one dominated by basic voice telephony to one where product
differentiation is the key to survival and the convergent that is emerging between telecommunications,
broadcasting, cable television and the internet . These global trends are reflected in changes to Sri Lanka’s
Data and Voice Communication Industry since 1980’s.

Political Factors

At the beginning the industry was completely state owned. Later it moved towards deregulation by the
separation of the policy and business arms in 1992. Now there are mainly four private companies in Sri
Lanka other than the SLT (Dialog Axiata, Mobitel , Airtel ,Hutchison and Lanka Bell). Unstable political
situation, tax policies and telecommunication levy policies affect the industry.

Economic Factors

As a result of unstable economic environment and economic crisis, the country is experiencing high
inflation rate, high fluctuation in exchange rate, rupee devaluation and restrictions in foreign currency
transfers. In addition there is a shortage in fuel supply and power outage. All these factors adversely
affect the industry.

Socio Cultural Factors

In Sri Lanka literacy rate is high and people have good ability of using & adapting to new technologies.
Other than that there is a high usage of mobile phones and internet. The Covid 19 pandemic has created
new aspects such as online leaning and work from home. These factors positively affect the industry.

Technological Factors

Sri Lanka cannot refrain from the technological changes in the world. Even though the country depends
on foreign direct investment the TRCSL encourages local research and development also.

Environmental Factors

Climate changes and global warming can affect how services reach to customers. Besides the industry has
to concern about Co2 emission, carbon footprint and ecofriendly systems.

Registration No. 721435148

 6

Legal Factors

The industry has comes under rules and regulations imposed by Telecommunication Commission of Sri
Lanka. All service providers should follow the legal requirements. Rigidity of the rules and regulations
has negative impact to the industry.

1.2 Dialog Axiata PLC

Dialog Axiata PLC, a subsidiary of Axiata Group Berhad, operates Sri Lanka’s leading Quad play
connectivity provider. The company ranks among the largest listed companies on the Colombo Stock
Exchange in terms of market capitalization. Dialog is also Sri Lanka’s largest foreign direct investor.

Dialog has been at the forefront of innovation and digitization in the mobile industry in Sri Lanka since
the late 90’s, propelling the nation’s mobile telephony infrastructure to a level of advancement on par
with the developed world. The company delivers advanced mobile telephony and high speed mobile
broad brand to a subscriber base over 17 million Sri Lankans via 2.5G and 3G/3.5G and 4G/4.5G
networks. Furthermore Dialog is currently the fastest mobile network, having won both the Download
Speed Experience and Upload Speed Experience awards from open signal.

The company invasion into new digital frontiers, spearheading technology first in South Asia and Sri
Lanka with the commissioning of South Asia’s first fully functional and standard –compliant 5G pilot
transmission and Sri Lanka’s first 5G trial network. Dialog is the winner of many Global Mobile Awards
and awards in Sri Lanka consumer market.

Dialog products

• Fixed & Mobile Telephony

• Fixed & Wireless Broadband
• Satellite TV
• Mobile TV

Dialog Services

• Connectivity.
• Collaboration.
• Business Networks.

Registration No. 721435148

 7

• Physical Security.
• Cloud & Colocation.
• IoT.
• Work from Anywhere.
• Digital Education.
• Tools and apps
• Data insights

Vision

To be the undisputed leader in the provision of multi- sensory connectivity resulting always, in the
empowerment and enrichment of Sri Lankan’s life and enterprises.

Mission

To lead in the provision technology enabled connectivity touching multiple human senses and faculties,
through committed adherence to customer –driven, ethical, responsive and responsible business
processes, and through the delivery of quality service and leading edge technology unparalleled by any
other, spurred by an empowered set of dedicated individuals who are driven by an irrepressible desire to
work as one towards a common goal in the truest sense of team spirit.

Dialogue Values

• Service from the heart

• Create the future
• Champions of change
• Exceptional performance
• Uncompromising integrity
• Responsible leadership
• One team

Registration No. 721435148

 8

2. SWOT Analysis for Dialog Axiata PLC

SWOT analysis is a framework used to assess a company's competitive position and to establish
strategic planning. It evaluates internal and external factors, as well as current and future potential of the
company.

Strengths Weaknesses
• Reputation in the band name • Decrease in demand for fixed line and DTV
• Strong network coverage • Higher price for IDD calls than other companies
• Innovation in the technology eg;Dialog 4G,5G • Roaming packages are high in cost
• Massive customer base • Weak packages for government sector
• Competitive advertising & promotion • Low credit margins for business packages
• Strong infrastructure • No clear idea of a broad business expansion.
• Modernization of operations
• Digital adoption of platforms
• Wide product range
• High market capitalization
Opportunities Threats
• Rapid growth in telecommunication industry • Continuous changes in technology
• New normal opportunities- demand for of e • Competition from other companies
learning and work from home • Rapid increase in regulatory charges
• Technology advancements • High inflation level in the country
• Increase demand in smart phones • Power outage in the country
• Shortage of fuel supply.

Registration No. 721435148

 9

3. Identification of Industry Attractiveness for Business Expansion of Dialog

Axiata PLC

Michael Porters Industry Analysis Model

Porter's Five Forces is a model that identifies and analyzes five competitive forces that shapes the
industry and helps determine weaknesses and strengths. This analysis is frequently used to identify an
industry's structure to determine corporate strategy.

1. Threats of new entrance

This is how easy for new companies to enter into the market. It has two main factors.

1. Barriers to entry
2. Expected retaliation

Barriers to entry

The companies in the market are experiencing economies of scale. That means existing companies can
easily offer their products or services at a lower price than new entrants. In addition, the capital
requirement to enter into the industry is very high. Besides existing companies own exclusive rights to
suppliers and distributors and rules and regulations to enter into the industry are high. The final mobile
operator license for Sri Lanka has been awarded to Airtel. After that as per TRCSL there will be not any
further licenses issued. It allows Dialog and some other companies to dominate the industry. As a result
of all the above factors barriers to entry is very high.

Registration No. 721435148

 10

Expected Retaliation

The existing companies in the market have large stakes in continuing their business and they are the
dominant players. Hence they have strong retaliated to any new entrant.

Accordingly threats of new entrance are very low. Therefore there is industry reactiveness for business
expansion.

2. Bargaing power of suppliers

According to the various operation performs, there are local and international suppliers for Dialog. They
are extremely powerful. A back haul is very important for network connectivity. For this purpose Dialog
has to depend on local provider because it does not own their own national back bone. The supplier
bargaing power depends on SLT, MTT and a few other VSAT operations who have access to the national
back bone.

2. Bargaining power of buyers/customers

When comparing to the western countries, customer demand is not strong and no customer protection
groups. Thus bargaing power of customers is low and it increases the attractiveness. However buyers are
very cost conscious. And switching costs are low as well. In this instance, because there are other
operators, bargaing power of buyers are high. But it is controllable to some extent as a result of Value
added services provided by Dialog.

3. Threats of substitute products

There are no substitutes at all. The only alternative is fixed line and CDMA. But there is a huge different.
Hence low existence of substitute products increases the industry attractiveness.

4. Intensity of rival among competitors

The competition is very high in the industry. There are constant pricing wars between the companies.
High intensity of rival results to decrease the industry attractiveness. Nevertheless Dialog has an
advantages than competitors because of their value added services, differentiation strategy and huge
customer base.

Registration No. 721435148

 11

4. Identification of Suitable Strategies for the Dialog Axiata PLC

4.1 Tows Matrix

TOWS matrix is an extension of the SWOT analysis. It combines internal and external forces to find out
productive ideas of how to use the findings.

SO strategies WO strategies
1. Use strengths to take advantage of opportunities. 2. Overcome weaknesses by taking advantage of
opportunities
SO1-Use innovations in technology for rapid WO1-Use opportunity of technology advancement
increase in telecommunication industry. to increase fixed and DTV demand.
SO2-Use wide network coverage and strong WO2-Use opportunities of new normal to introduce
infrastructure to introduce new packages to fulfill new packages for government sector.
demand for new normal. WO3-Use technology advancement to broad
SO3-Use innovation in technology to gain business expansion.
technological advancements.

ST strategies WT strategies
3. Use strengths to avoid threats. 4. Minimize weaknesses and avoid threats.
ST1-Use innovations in technology to comply with WT1-Decrease IDD and cost of roaming package
continuous change in technology. Egged sim charges to avoid competition.
ST2-Use competitive advertising and promotion to WT2-Introduce excellent package for government
compete with other companies. sector to avoid competition.
ST3- Use high market capitalization to decrease WT3-Increase credit margin for business packages
threats of competitors. to avoid competition.
ST4- Use strong infrastructure to face for power
outage and lack of fuel supply.

Registration No. 721435148

 12

4.2 Grand Strategy Matrix

Grand Strategy Matrix is another tool that identifies several strategic options for a company depends on
competitive position and the growth of the industry.

Quadrant II Quadrant I

Quadrant III

Quadrant VI

As the Dialog has strong competitive position and the market is rapidly growing, the relevant quadrant is
quadrant I. The strategies we have identified by TOWS matrix can be categorized under the strategies
inside the quadrant I.

1. Market Penetration

WO1-Use opportunity of technology advancement to increase fixed and DTV demand.

ST2-Use competitive advertising and promotion to compete with other companies.
WT1-Decrease IDD and cost of roaming package charges to avoid competition.
WT3-Increase credit margin for business packages to avoid competition.

2. Product Development

SO1-Use innovations in technology for rapid increase in telecommunication industry.

SO2-Use wide network coverage and strong infrastructure to introduce new packages to fulfill demand
for new normal.
SO3-Use innovation in technology to gain technological advancements.
WO2-Use opportunities of new normal to introduce new packages for government sector.

Registration No. 721435148

 13

WO3-Use technology advancement to broad business expansion.

WT2-Introduce excellent package for government sector to avoid competition.

3. Horizontal Integration

ST3- Use high market capitalization to decrease threats of competitors. Eg-acquire Airtel

5. Justification of Selected Strategies Dialog Axiata PLC

Ansoff Matrix

Ansoff matrix is a strategic planning tool that provides the framework to device strategies for future
growth of a company.

Market Penetration
This is to selling more of the company’s existing products or services to existing markets. It can be done
through promotion and distribution, cutting prices and modification of existing products. While the
Dialog is having aggressive advertising and promotion, they can use that strength to accomplish this
strategy. In addition they can cut charges of IDD calls and reduce cost of roaming packages. They can use
new technology they have to improve fixed lines, DTV and other products. This is the least risky strategy.

Registration No. 721435148

 14

Besides the horizontal integration comes under market penetration in Ansoff matrix. Because acquiring a
competitor in the same market is one method of market penetration. Dialog can merge or acquire airtel for
to expand their business.

Product development
Product development is developing and selling new products/ services to existing market. For this
strategy the company should have a good market share in existing market to introduce new products or
services. In addition it should have a good customer base and known that the market for its existing
products/services has reached saturation. As a result of Dialog has fulfilled both of the conditions they
can successfully go for this strategy.
They can accomplish this strategy through introducing new products and services by using their
technological advancement. And forward new packages for government sector and internet uses.

6. Recommendations and Action Plan

6.1 Recommendations to the Management

1. Increase features of fixed lines and DTV

2. Decrease IDD charges and cost of roaming packages.

3. Increase credit margin for business packages.

4. Introduce new internet packages for e learning and work from home users.

5. Introduce new package like “Upahara” for government sector.

6. Acquisition of Airtel ltd.

Registration No. 721435148

 15

6.2 Action Plan

Strategy #01: Market Penetration

Action Plan 1.1
Use technology advancement for Fixed line & DTV
Action Description Responsible Start Date Complete Resources Success
Party/Dept. Date Measures
Identify new technologies Research and 01/08/2022 05/08/2022 Sales revenue
related to products and Development customer base
services
Add that features to the Research and 06/08/2022 10/08/2022
said products Development
Introduce the changed Marketing 12/08/2022 18/08/20220
products to market
Action Plan 1.2
Use advertising and promotion to compete with other companies
Identify the offers which 10/08/2022 17/08/2022 Sales revenue
are mostly affected by customer base
other competitors.
Create new advertising 18/08/2022 28/08/2022
campaign for the Marketing
identified offers.
Implement the 28/08/2022 03/09/2022
advertising campaign.
Action Plan: 1.3
Change prices to compete with of other companies.
Identify the different of 05/09/2022 12/09/2022 Sales revenue
price of IDD charges and Market share
cost of roaming packages Competition
compared to competitors. win rate
Set the new low prices for Marketing 14/09/2022 21/09/2022
IDD and roaming
packages.

Registration No. 721435148

 16

Strategy #02:Product Development

Action Plan:2.1
Introduce new internet packages
Action description Responsible Start date Complete Resources Success
Party/Dept. date measures
Identify the demand Marketing 23/09/2022 28/09/2022 New product
during the new normal sales
and requirements of Average
internet. product ROI
Design new packages Research and 29/09/2022 05/10/2022 Increase in
which fulfill the Development market share
requirements.
Introduce new internet Marketing 06/10/2022 10/10/2022
packages to the market.
Action Plan: 2.2
Introduce a new package for government sector

Identify the requirements 06/10/2022 14/10/2022 New product

of government sector. sales
Design new packages Research and 15/10/2022 23/10/2022 Average
which fulfill the Development product ROI
requirements. Increase in
Introduce new internet Marketing 24/10/2022 30/10/2022 market share
packages to the market
Strategy #03: Horizontal Integration
Action Plan: 3.1
Merge or Acquire Airtel
Action description Responsible Start date Complete Resource Success
Party/Dept. date s measures
create a plan for merge or 10/08/2022 01/09/2022 Sales and
acquisition revenue
Perform valuation 02/09/2022 03/10/2022 Profit margin
Finance Employee

Registration No. 721435148

 17

Negotiate and sign the 04/10/2022 11/10/2022 retention rate

deal Customer
Perform due diligence 11/10/2022 11/11/2022 retention rate
Create purchase and sale 12/11/2022 20/11/2022
contract
Create final financial 21/11/2022 30/12/2022
strategy
Implementation 01/01/2023 15/03/2023

Registration No. 721435148

 18

References

Dialog Axiata PLC annual report 2021

Dialog Axiata PLC sustainability report 2021
Sri Lanka's Telecommunications Industry: From Privatization to Anti-Competition-sisira kumara
jayasuriya-article
www.investopedia.com
www.slidemodel.com
www.trc.gov.lk

Registration No. 721435148