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Strategic management at Maxis Communications Malaysia

Anglia Ruskin University

Code: MOD001115

Learning Outcomes:

LO 1. Understand the nature of strategic management and its competitive and institutional context;

LO 2. Appreciate the strength and limitation of strategic analysis and how it fits into the overall strategy process;

LO 3. Design a viable strategy for an organisation, which takes account of the reality of strategic decision making and make appropriate recommendation;

LO 4. Identify and critically utilise relevant tools for strategic analysis


Answer

Introduction

Maxis communication is one of the well-known holding companies in Malaysia. It provides the communication products, value added services to the customer and apart from this, the company is also providing the mobile, fixed line and international telecommunication services to their customer. It has almost 13 million-customer base for which the company is able to maximize their profit (Porter, 1996). The new business of the organization is the internet and broadband services to the customers. In addition to that, the Maxis communication is also providing the voice calls, text and picture message services to the customers. One thing can be said here that, the Maxis Communication has achieved the 3rd place among the top 30 companies in Malaysia.


In this case, the strategic management is required for the organization because the Maxis Communication is now launching the 4G services across the country and apart from this; the organization is providing the cloud computing services to the customers of the country (Johnson et al. 2013). The organization is now facing the strategic issues because the Maxis Communication is now expanding the business and many more issues are there:


1. The organization has the problem on network access security for which the organization is still not able to provide secure accessibility of the services to the customer

2. Network domain security is not up to the mark and as a result of this the Maxis Communication has a problem in user data exchange (Mintzberg and Waters, 1985).

3. The organization is not able to provide the application domain security in case of 4G networking services (Porter, 1996). 

Therefore, to resolve these problems from the 4G networking services the organization needs a strategic management in this regard (Collins and Porras, 1996).


Mission, goals and objectives statements

The Maxis Communication has basic mission in order to provide the services to the customer across the country. In the case, the organization has the mission to establish a smooth 4G services to the customer because they will be the first service provider who launches the 4G LTE services in Malaysia. In order to achieve the mission and vision the organizational authority must be focused to provide the service to the customer of the company.Proper focus is required otherwise, the telecommunication company will ne be able to achieve the mission and vision.


In this case, on the basis of the mission the organization has the clear vision for the future that by providing the smooth 4G LTE services to the customer the organization will achieve the first position among the 30 top most communication brands. The organization has some basic objectives in order to achieve the mission and vision. The basic objectives are:


1. Maxis Communication will appoint the efficient employees who can be able to provide the 4G LTE services of the organization

2. In order to earn maximum revenue the organization must expand their business and enhance the services of the organization

3. The Maxis Communication must reduce the cost of the customer by which the organization will be able to earn maximum profit

4. By applying new technology, the organization will attract more customers, which helps the organization to expand the business and earn the maximum income


Therefore, by achieving these objectives the organization will be able to achieve the first position among all the service providers in Malaysia. The authority of the company will be able to get the higher income and high growth rate by achieving the mission and vision. Therefore, this higher income and high growth rate will the motivational factors of the maxis communication.Proper clarity is required in order to achieve the mission and vision because without the proper clarity the stakeholders of the company will not be able to understand the viability of their vision and mission.


In this case, the objectives of the organization must be clear otherwise the company will not be able to achieve the growth rate. The goals of the organization will not be clear if the objective of the company is not clear. Therefore, the clarity in objectives is required.


Environmental analysis

Environmental analysis of Maxis communication is based on two environmental analysis one is external environmental analysis and another is internal environmental analysis. In case of external analysis the macro analysis ids the part and based on this the organization will be able to identify the possible success and failure in the stages of the business (Johnson et al. 2013). The PESTEL analysis can be the macro analysis or the external analysis of the Maxis Communication and for this, the organization can be able to know more about the external things of the organization (Nippa, Pidun and Rubner, 2011).


Political factors: in this case, governmental policies of Malaysia helps the Maxis communication in order to introduce the new technologies and it also helps to reduce the external cost because the simplified governmental policy helps the organization to expand the business. In addition to that, the tax structure of the Malaysian government helps the organization to reduce the cost and in addition to that, the organization can be able to earn maximum profit and for which the Maxis Communication can be able achieve the higher growth rate. Apart from this, the political stability in Malaysia helps to expand the business of the organization (Treciokas, 2013). 


The political situation will play a significant role in the growth strategy of the organization. The government of Malaysia is helping the organization like maxis communication. In this case, they are reducing the tax pressure from the company for which they can be able to achieve the growth rate.In addition to that, the organization is also reaping the harvest of the governmental policies by achieving the subsidies.


Economic factors: In this regard, the interest rate of the Malaysian government is helps the organization to achieve the higher growth rate and it helps the organization to invest more in order to expand the business. The disposable income of the country is much higher, for which the Maxis communication is able to earn higher income the organization is able to provide the services to the all over country. As a result, of this, the Maxis Communication can be able to earn maximum revenue. The GDP growth rate of the Malaysian economy also helps to expand the business of the organization (Grant and Jordan, 2012).

The economical condition of the Malaysia help the organization to gain more customers and the profit margin of the company has increased.


Socio-cultural factors: Due to increase in population of Malaysia, the Maxis Communication is able to expand their business because the number of customer has increased. In addition to that, the organization is able to earn more income and apart from this, the due to the change in the culture the communication style has also changed for the use of internet has increased in Malaysia and the service user of the cloud computing is also increasing for which the business of the Maxis Communication has increased. In addition to that, the data consumption of the customers has also increased which is one of the main cause for which the organization can be able to earn higher revenue (Schoemaker and Day, 2009).


Technological factors: Due to enhancement of the technology, the Maxis communication is able to provide the 4G LTE services to the Malaysian customers and as a result of this the organization can be able to enhance international communication process. In this case, the organization has spent huge money on research and development and it emphasizes on the innovation strategy of the organization. As a result of this the Maxis Communication has achieved the 3rd position among all the service providers in Malaysia. In addition to that, due to the huge spending on research and development the organization is able to enhance the service quality for the users.

In order to achieve the growth sometime the organizational authority import the technologies in order to provide the best services to their customers.


Environmental factors: The Maxis Communication has the awareness about the global warming and the Maxis communication has the knowledge due the radiation effect the human life is now in danger so their mobile tower is in the protected area from which the radiation power cannot affect the human body as well as the trees of that area (Schoemaker, 1995). Maxis communication has taken some policies in order to reduce the adverse effect of the radiation power of the mobile tower and the organization has built their fixed line cable on the surface of the land as a result of this the Maxis communication is able to reduce the radiation power in some extent.


Legal factors: The Maxis Communication is the first service providers in Malaysia who provides the 4G LTE services to the customer and the organization has the legal right to use the technology in order to provide the 4G services to the Malaysian customers (Laurie, Doz and Sheer, 2006). Maxis communication has their own network by using this the organization is able to provide the internet, fixed line services, internet services and the 4G services to the customers. There is no service providers has the right to operate in that network layer. Apart from this, if any one use this then The Maxis Communication has the right to take the legal step against those service providers.


Both the factors have the positive and negative impact and based on this the organization will develop their strategy.

The positive side of the economical factors has the great impact on the business and they will be able to achieve the growth.

In order to remove the legal considerations Maxis communication is set the rules and regulations according to the legislations of Malaysia. In this case, the employment act of Malaysia is followed in case of workers of the Maxis communication.

On the basis of these factors the organization can be able to identify their future reason of success and the failure and the organization can be able to earn maximum profit and also be able to expand their business.


In this case, the Political factor is the main driver force to change the structure and the business of the organization and apart from this the technological changes is also the driving force for which the organization is able to expand the business and able to earn huge income (Ofek and Wathieu, 2010).

Apart from this, the industry analysis is one of the important environmental analysis for which the organization can be able to achieve the higher growth rate and it is one of the way to find out the growth path and failure. The five forces analysis is very much important (Kumar, 2006) to analyze the growth factors of the organization.


Name of the forces
Level
The threat to entry in the   industry
High
The threat of substitutes in the   market
Low
The bargaining power of buyers in   the industry
Low
The barraging power of suppliers   in the industry
Low
The extent of competition between   the competitors
Medium

Table 1: Porter’s five forces


On the basis of this five forces of the organization can be able to identify the growth of the organization (Watkins and Bazerman, 2003). From the table it is clear that, due to low threat to entry in the industry, the Maxis Communication is able to expand their business very smoothly and apart from this due to the low bargaining power of the customers, the organization is also able to earn maximum profit and income within a stipulated time period (Scholes, 2013). In Malaysia, there are many telecommunication companies and the growth of this industry is moderate in the south Asian country. In this, respect the Maxis communication is developing their strategy to achieve a place among the top 30 firms in south Asian telecommunication industry.With the help of the PESTLE analysis, the organization will be able to understand the situation of the industry and based on this they will develop their management and business strategy.


 Capability analysis

In order to analyze the capabilities of the Maxis Communication the value chain analysis is much more important because it helps the organization to identify the activities for which the Maxis Communication can be able to create value within their business. The technological enhancement or the research and development are one of the important activities for which the Maxis Communication can be able to expand the business and be able to add more value within their business (Parnell, 2006).


Valuable: In this case, the KPI is also effective for the organization because on the basis of this the organization can be able to state how effectively and efficiently the organization able to operate within the industry and able to achieve the key business objectives (Marshall et al. 2010).


Inimitable: The Maxis Communication can use the KPIs to evaluate the achievements at their reaching targets. The organization will choose three factors in order to create the key performance indicators and to compare it with the objectives of the organization and industry trends (Sharp and Dawes, 2001).

In this case, the factors of Key Performance Indicators are:

1. Describing the results

2. Setting targets and thresholds

3. Selecting the right measurements for each objectives of Maxis Communication


Rare organization: According to the study of kim (1998) the KPI is the important aspects for an organization. With the help of the first factors, the organization the Maxis communication can be able to examine the trends of the organization and additionally the trends of the business (Barney, 1991). Apart from this, the organization the second and third factors of key performance indicators the organization can be able to examine the all the objectives of Maxis Communication and it will be easier for the Maxis Communication to describe the process how effectively they are achieving all the goals and objectives (Goold and Campbell, 2002). In this case, the organization has appointed 2901 employees in order to achieve the goals of the organization.


In order to analyze the capabilities of Maxis Communication VRIO analysis s also needed. In this case, value, rarity, and inimitability and organized. The organization will outsource the resource if it is not creating any values to the organization (Kim, 1998). Maxis communication has terminated the employees who was not able to create value within the organization and for which the organization is able to reduce the cost. It is one of the strength of the Maxis Communication but is has the weakness as well because outsourcing is needed for which the organization is become dependent (Teece, Pisano and Shuen, 1997).


The maxis Communication is providing the rare services to the Malaysian customer and the Maxis Communication is one of the service-producing brands who provide the 4G LTE services in Malaysia (Heracleous and Wirtz, 2010). It can be stated that it is one of the strength of the Maxis Communication for which the organization is able to expand the business but is also become a weakness of the organization because the networking infrastructure is not better to provide smooth services to the customer in Malaysia (Shepherd, 1998).


Proposed strategy

In order to propose the strategy for the Maxis communication then the SWOT analysis is important without this the organization cannot be able to identify its strength and weakness of the organization.  The proposed strategy of the organization is basically the corporate level strategy because the TOWS matrix is used to describe the corporate level strategy. In addition to that, opportunities and threats is also is the important things based on which the organization will be able to develop a strategy (Johnson et al. 2013). In this case, for better understand SWOT analysis will be in the form of TOWS matrix. In each quadrant, there will be one strength, weakness, opportunities and threats. The TOWS matrix will be:



Strengths Of Maxis Communication   (S)
Weakness of the Maxis   communication (W)
Opportunities of the Maxis   Communication (O)
Low bargaining power is the   strength of Maxis Communication that creates the opportunities for the Maxis   Communication.
The Maxis Communication is   providing the rare services to the customers, which is one of the weaknesses   of the organization.
Threats of the Maxis Communication   (T)
Low bargaining power of the   suppliers is one of the strengths that become the threats for the Maxis   Communication.
The Maxis Communication will   terminate some employees who have no capacity to create value within the organization   and it will be one of the threats of the organization.

Table 2: TOWS matrix of Maxis Communication


In this case, the organization can be able to expand the business on the basis of the TOWS matrix and on the basis of the SWOT analysis. The organization can be able to change the strategy in order to achieve the objectives. The organization can change the structure of the employees and increase the outsourcing for which the fixed cost of the organization will reduce and the revenue of the Maxis Communication will increase (Treciokas, 2013). As a result of this the organization can be able to increase the revenue and the profit margin and it is one of the major objectives of the organization. Apart from this, the organization can be able to achieve the higher growth rate on the basis of this (Nippa, Pidun and Rubner, 2011).


In this case, an Ansof matrix can be developed by which the Maxis Communication can foster the growth of their business.

In this case, the organization has introduced cloud computing in the Malaysian market and by introducing this, the Maxis Communication has increased the price of the cloud computing and earning the maximum level of profit. In addition to that, the Maxis Communication is introducing the new services 4G LTE in the Malaysian market and this service is in the developing stage and for which the organization is able to create a new set of customers (Nippa, Pidun and Rubner, 2011).


In the new market where the organization is introducing their existing products in order to make the market more stronger. In addition to that, the organization is also introducing their 4G LTE services that also help the organization to make the market stronger and also help to create new set of customer (Laurie, Doz and Sheer, 2006). 


In this context, one more can be said that, with the help of the Ansof matrix, the organization can be able to achieve the objectives and with the help of this, the organization can also be able to achieve the mission and vision (Johnson, 2013).


Strategy evaluation

In this case, the Maxis communication will evaluate their strategies in order to examine the effectiveness of the strategy. The organization will evaluate the strategies in three stages one is suitability, acceptability and the last one is feasibility (Kaplan and Norton, 2012). 


Acceptability: In this case, the proposed strategy on the basis of the Ansof matrix is quite suitable for the Maxis Communication because it helps to expand the business. In this context, by introducing the 4g LTE services to the existing market the organization can be able to earn more money and it helps the organization to expand the business within a stipulated time period. In addition to that, this will also help the Maxis Communication to achieve the higher growth rate (Kaplan and Norton, 2016). By introducing the existing products in a lower price and after charging, the higher price the Maxis Communication is able to earn additional revenues and the customers the low bargaining power for which it will become easier to achieve all the objectives within a stipulated time period.


Feasibility: In this case, all the proposals and the strategies are feasible because with the help of these strategies the Maxis Communication is able to achieve all the objectives. In addition to that, all the missions and visions are achieved with the help of these strategies. Therefore, it can be said that, it is feasible and these strategies are cost effective and has the ability to reduce the cost of the organization (Richard, Devinney and Johnson, 2009).


Suitability: In this case, the strategy of the Maxis communication is suitable because with the help of this strategy, the organization is able to achieve the success and they have achieved the higher growth rate. With the help of their financial strategy, the Maxis communication is able to reduce the cost of the organization and from this it is proved the strategy of the organization is much more feasible.


In addition to that, it can be said that the strategy that adopted by the organization is also accessible because on the basis of the business objectives the organizational authority has adopted this strategy.


All the strategies that are proposed are acceptable to all the authorities of the organization because the strategies have the power to achieve the objectives and all the strategies has the power to resolve the issues of the organization (Denrell, 2013). 


Therefore, it is clear that, the organization is able to implement the proposed strategies because the Maxis Communication can foster the growth and able to resolve all the strategic issues and it helps the Maxis Communication to expand their business.

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