A study to understand the business model of Bharti Airtel

Abstract

In today’s world, companies are striving very hard to increase profitability. With globalization, intense competition and continuously shortening life cycle, products are becoming commodities at a faster pace. To counter this i.e. to increase top line performance, firms are trying hard to increase their core offerings. But, increasing core offerings often results in increased costs in a market which is witnessing continuous decline in price. If we look at some of the successful companies, they have acted counter intuitively and have successfully rationalized their core. For instance, Apple, the most valued company on the planet today, has reconsidered its core and significantly reduced it. Earlier, it used to manufacture almost everything itself even the printer cables but today, almost 90% of the inputs for its flagship product iPhone are outsourced . Similarly, there are other successful companies such as Nike which have strived towards growth on the basis of its strategic network. In India, the company which is a pioneer of a unique business model in the telecom sector is Bharti Airtel. It is the biggest player in the country with continuous expansions in other continents and has replicated the same business model everywhere. Its business model has relied completely on strategic alliances and partnerships. The model is so successful and admired that several large telecom players of the world have adopted it. It is difficult for a company to run without owning almost anything tangible but Bharti Airtel and Apple have proved that they can take the competition down with strategic partnerships. The question is what it takes to form such successful alliances. In what situations would these alliances work the best? What are the key considerations that are critical in selecting such partners and forming such alliances? What are the risks involved and what contingency measures should be there. In this paper, we try to answer some of these questions with the help of Bharti Airtel’s case in India