Opportunity analysis and go to market strategy for AT and T India in the non IT-ITES segment

Abstract

AT and T sees India as strategic growth market and is investing to build capabilities and expand its customer base in India. Initially the company s main target segment in India were the Foreign MNC s customers who were expanding their base in India, but slowly with the growth of Indian IT and ITES sector, the demand for global network services increased from the IT/ITES segment and AT and T expanded its target base to include the Indian HQ d multinational corporations from the IT/ITES industry. In order to increase its target customer base further in India and to develop India as a strategic growth market, AT and T seeks to explore and evaluate opportunity in the non-IT/ITES sector in India. The non IT-ITES segment consists of companies whose core business is other than IT and IT related operations, for example Pharmaceuticals, Energy and utilities companies, manufacturing companies etc. The current customers from the IT/ITES segment are crowded with network suppliers, who are competing with each other and thus putting pressure on the profit margins and also for the fact that these customers appreciate much less the value proposition of the managed services being provided by the network supplier, as a result network services become a commodity for this segment. Another reason is that over the last few years Indian economy has been expanding and the growth story is robust going forward as well for next 5-10 years and in the recent years, Indian companies in the manufacturing, pharmaceuticals, services and other sector have set themselves on the path for globalization, expanding operations via mergers and acquisitions in other parts of the world. The scope of the study included identifying the top 30 (by Revenue) Indian MNC shaving significant presence outside India, from across different industry verticals and guided by major mergers and acquisitions by these companies outside India. Formulate the framework for Opportunity Analysis and the Go to market strategy for AT and T in the target market segment. Assess the market potential and the target market size, with growth forecasts, for AT and T in the Non-IT/ITES sector and form the market entry strategy for AT and T in the target market. The methodology for the empirical study and analysis combines data primarily from secondary sources as research reports, company and industry websites, company annual reports, news articles and other publicly available data and first hand information through survey questionnaire s and discussions. The study applies the market opportunity analysis framework and Go-to-market framework to derive total market potential and strategy for entry into the target market. The study identifies that spend on Network services and network Integration services forms part of the total IT spend for any organization. The major segments, other than IT/ITES and telecom, in India having substantial IT and telecom spend are the manufacturing and the services sectors. The total IT spend for any firm is governed mainly by the industry environment and the macro-environmental factors. The industry environment for the target firms becomes more intense and competitive as the firms grow global. The firms within a industry follow similar trends in technology as they compete against each other. As far as IT is concerned, with globalization effect, the whole industry environment is going through transformations and in order to stay competitive firms are increasing productivity throughout the value chain by using best business practices and continuous technology up gradations. IT has the potential to act as force multiplier in order to achieve global competitiveness. Some of the companies in these sectors have more than60% of their annual revenues contributed by exports. The study identifies some of the macro-environmental factors influencing the target segment as increase in the India outward FDI flow for acquiring controlling stake in foreign companies, increasing exports revenue for the Indian MNC s, increasing use of IT goods and service for business productivity and the robust economic condition for the Indian companies. The study finds, based on the market sizing analysis, that the potential addressable market size for AT and T s network and network Integration services in the Non IT-ITES target segment in India, is currently approx US$ 76 Million and which is going to grow to more than US$ 110 Million by year 2013. The future growth prospect can be much bigger provided the Indian MNC s scale up their IT infrastructure to match up with the global IT standards, for these sectors. Apart from the network services there is also good market potential for Network IT outsourcing projects for which the total market size is estimated at 300 US$ Million and forecasted to grow to ~600 US$ Million by year 2013.The study and analysis reveal that there is a potential opportunity for AT and T in the non-IT/ITES segment in India and which can be addressed by AT and T over the next 2-3 years. AT and T has certain competitive advantage in addressing the needs of the target market and offers a robust value proposition for providing its network and network-IT services for the target segment.