Emerging strategies for telecommunication equipment vendors: growth strategies for Siemens mobile in India

Abstract

It has been a wonderful year for the Indian mobile industry. With total subscribers increasing to 28 million, India has become the 13th largest market in the world, with indications of moving up few more places in the coming year. Indian wireless industry is seen along with China (270million subscriptions) as the most favored market by all wireless equipment vendors. SIEMENS, as a leading player of Wireless equipment rates India as one of the key markets in the next years. Global Wireless industry is dominated by the European countries backed GSM technology, which has also become the de-facto standard world over. But emergence of new and more efficient CDMA technology has lead to a stiff competition. India has become home to both GSM and CDMA technologies. In both GSM and CDMA technologies, wireless equipment in broad terms consists of Terminal devices like Phones, PDA's, Smart phones etc and Core network equipment like Radio equipment and switching equipment. Mainly GSM Core network equipment market is under the purview of this study. Ericsson, Nokia and SIEMENS are the Top three global vendors for GSM core equipment. SIEMENS is way behind the top 2 competitors in terms of market share. The scene is not so different in Indian market, Ericsson leads the market with 40% market share, and SIEMENS comes second with distant 11% share. There has to be few changes in SIEMENS strategies for Indian market to get a good market share, which could also change their global standings. This report analyses the competitive differences between the top GSM core vendors and charts out strategies for SIEMENS to capture sizable market in India. The growth strategies are determined by using the following methodology:1. Wireless Industry value chain is analyzed to figure out the changing interfaces and the new segments of market that the industry has created in the last years.2. Since the technology is standardized vendors differentiate along different competitive dimensions, Porter's 5 forces model is effective tool to bring out these dimensions of competition. In current scenario Ericsson and Nokia have mastery over these dimensions.3. The three competitors are analyzed for their strategic competencies using the Resource based framework and the sustainable competitive resources/capabilities are charted out. Using this growth strategies for SIEMENS in India are framed. Industry idea of an ideal supplier is one who is a technology leader with excellent service and who can cater to the operator's need. After evaluation of all the studied factors the growth strategies for SIEMENS in India can be summarized as:1. Introduce Market Specific Products: Product tailoring based on market needs.2. Adapt to the evolving business trends/needs: Forward integrate and set up networks for the big operators, so that operators could concentrate on making more money. Reap the benefit from the profitability of the customers as well.3. Time to market: Have 'first mover advantage' in introducing new core products4. Invest on India: Get local with right products and services for Indian market along with well-trained technical service group located within India. They could also plough back the learning into the product development groups.5. Improve Brand Image: Improve brand communications and establish the image in communication products.6. Enhance Customer Base: Become vendor to the top operators in India to gain more market share. Invest in building relationship with potential customers.