Leadership 2 Essay Example | Topics and Well Written Essays - 4500 words

Leadership 2 - Essay Example Figure Name Page No. 1 Cost Leadership Strategy of Giffgaff 5 2 Revenue Decline of the UK Telecom Industry 7 3 Increase in Data Usage 10 4 Reduction in Mobile Voice Cost 13 5 McKinsey 7S Framework 14 6 Present Lattice Structure in Giffgaff 19 7 Proposed Organizational Structure for Giffgaff 20 1. Introduction In this paper, the researcher will shed light on state of art mobile phone service provider Giffgaff which has established its strong presence in telecom service industry of United Kingdom (UK) within few years of its inception. 2. Gifgaff-Introduction Giffgaff is SIM-only mobile network which was created by Gav Thompson in the year 2009 with an intention to attract digitally-savvy customers and the company is headquartered at Uxbridge, Greater London (Marketing Society, 2013). The company is subsidiary of Telefonica and currently it operates with 35 to 40 employees. The mobile operator has differentiated its value proposition by incorporating the community-powered model which w orks in similar pattern as web 2.0 technologies (Gifgaff, 2013). Interesting fact is that, the organization is run by its member partners and these members get rewarded for various activities such as increasing the channel length by bringing new partners, helping the company to earn revenues or promoting the brand etc. 2.1 Competitor Analysis & Business Strategy UK telecom operating industry is hypercompetitive due to presence of many big players with similar kind of product offerings such as Orange, T Mobile, Vodafone and O2. In such context, it was difficult for small player like Giffgaff to enter the UK telecom operating business without formulating unique value proposition statement. Giffgaff decided to work as mobile virtual network operator (MVNO) and operate through O2 network. However, both O2 and Giffgaff decided to target different customer segment and work as separate network player in UK. A comparison between network plans of different competitors can be depicted in the following manner; Figure 1: Cost Leadership Strategy of Giffgaff (Source: Marketing Society, 2013) As Giffgaff uses customers as promoter members and online platform to offer its plan hence the company is able to reduce significant amount of operational cost. The company has also reduced cost of its marketing activities and cost optimization strategy of the Giffgaff has given them the cost benefit advantage to reduce the price of offering in comparison to big players such as Vodafone, T Mobile, O2, Orange etc. However, Giffgaff targets young, digital savvy customers who are ready to engage with the brand and promote the brand by themselves hence it can be said that target market for the company is small. Online community of the company was created in order to handle customer queries of target market in efficient and responsive manner in comparison to call centres of big telecom operators (Marketing Society, 2013). From generic strategy viewpoint, Giffgaff’s business strategy can be viewed as excellent example for focused low cost strategy. 3. Analysis 3.1 Environmental Audit The study will try to understand the macro-environment of UK in terms of political, economic, social and technological factors in order to understand the business position of Giffgaff. Table 1: PEST External Environment Characteristics Opportunity/Threat for Giffgaff Political (P) Government has deregulated the telecom industry which has opened door for many international telecom operators to establish