Developing A Business Plan For Hormuud Telecom: Market And Industry Analysis

Company Background and Services

Small business enterprise is a business that employs a small number of employees and does not have the volume of sales and market share. This kind of business provides huge growth scope for an economy and it helps in increasing the national income. Furthermore, entrepreneurship is an act of setting up business and taking the financial risk in order to earn huge profitability and success within a business. An entrepreneur is a person who has willingness and capabilities to start the business and who takes the financial risk in hope of profit. The present report is going to provide idea and knowledge regarding successful business plan through which a corporation can gain success, profitability and compete with rivals in a competitive business environment. The Hormuud Telecom Somalia country has selected to developing a systematic business plan through which it can increase its profitability and market share in the competitive market. Industry and market analysis has been also discussed within report with respect of Hormuud Telecom.

Hormuud Telecom is a private telecommunication organization which headquarter is situated in Mogadishu, Somalia. The company was established in April 2002 by Ahmed Nur Ali and it has currently 5000 permanent workers and changeable staff members. Hormuud Telecom company serves various kinds of high quality of mobile services (GSM), landline and mobile linked internet services such as Hotspot, Adsl-DSL, Mifi4G, W-dsl etc in high quality and features (Squicciarini, 2016). It has covered Southern and Central Regions of Somalia  in order to satisfy the needs and requirement of customers by delivering high quality of telecommunication services.

Hormuud Telecom corporation’s main mission is to offer an affordable, reliable and high quality of telecommunication services to people in the country. This telecommunication services and provide will provide effective satisfaction to customers in the country.

Hormuud Telecom organisation have vision is to become number one brand in the  telecommunication industry by provide reliable and efficient services of telecommunication in an affordable price. It desires to acquire large number of customer, high profitability and market share.

Hormuud Telecom Company has started its journey with 5000 permanent personnel’s and it has varying numbers of temporary staff members. Furthermore, approximate 4000 Somali business persons have shares in our corporation. Now, its business core value is to make satisfy customers by deliver effective and high quality of services and product. It delivers high quality of telecommunication services to its customers in affordable price and fastest speed.

Mission and Vision

Objective provides the clear defined target to business. Hormuud Telecom Company is going to design an effective business plan to gain long-term profitability, large customer attraction, huge sales of product and services and earn the maximum market share in the telecommunication industry. Its objective can understand by use of SMART objective-

Specific- Hormuud Telecom objective is to increase 35% profitability from last 6 months and acquire 50% of market share in the telecommunication industry (Westerlund, 2017).

Measurable- It objective is to provide affordable, reliable and high quality of telecommunication services to a customer and attract a majority of a customer in the country (Yen, And Chung, 2017).

Attainable- Its objective is to maximize its sales by 50 % every year of the product such as SIM card, basic premium Post-paid service, Top up (Evc Plus, Scratch car, E-voucher), Bulk Payment etc

Realistic- It desires to become one of the top brands in the telecommunication industry that provides the high quality of telecommunication services and products to its customers.

Time Bound- Its objective is to increase 35% profitability from last 6 months and acquire 50% of market share in the telecommunication industry within one year and it desires to maximize its sales by 50 % every year of product. Its objective is to passing its sales $15 million in the first year and $31 million in year 2 after implementing a business plan.

Hormuud Telecom Company serves the high quality of telecommunication services and products such as SIM card, basic premium Post-paid service, Top up (Evc Plus, Scratch car, E-voucher), Bulk Payment, mobile services (GSM) , landline and mobile linked internet services such as Hotspot, Adsl-DSL, Mifi4G, W-DSL, Tri-Band 3G service for mobile and internet client. Tri-band 3G is the first service that launched by Hormuud Telecom Company that offer fasters and secure telecommunication connection.

Hormuud Telecom Company has covered Central Regions and South of Somalia and fulfills an actual requirement of customers regarding mobile and telecommunication services. It mainly focused upon the youth and business customers who required fastest and high-speed services of telecommunication (Obeng And Blundel, 2015). It does not only famous for its reliable and expert services of telecommunication but also it deals with charity and voluntary work. In order to achieve its business plan objective that maximizes profitability, market share and sales of telecommunication product and services, it will focus on all kind of customers such as Corporate, personal and business.

Objectives

In order to sustain in the competitive business environment and perform for a long time, it is very important to analyze the business environment. As it is associated with various macro factors such as political, legal, technological, social and cultural that can affect small business enterprise (Bull and et.al., 2016). Cited venture have to consider the following factors of the macro business environment to gain effective sustainability-

Political- Entrepreneur must consider the political stability of the county before starting the business in the nation. In this aspect, every government in the different nationalities have different regulation, policies, practices, and rules etc that corporation have to follow (Klapper, Biga-Diambeidou and Lahti, 2016). By following these regulation and norms related to telecommunication services Hormuud Telecom can keep secure its business practices. However, changing policies and regulation can affect business unit as it has to modify business policies as well. 

Social and cultural- This factor is related to customer background, culture, region, choice, lifestyle, perception, education, occupation, income level, age, gender etc. While entrepreneur starts to develop a business plan then it must consider these factor so as it can meet customer expectation and requirement regarding product and services. Every customer either they are corporate or personal needs fastest services of telecommunication so Hormuud Telecom should identify requirement of customer and produce services accordingly. To gain effective success, the company must consider the social and cultural background of customers that helps in increasing sales of product and services and increase profitability (Huq and et.al.,2017). However, due to changing regular choice and demand of the customer, the entrepreneur has to make modification in price, features, packaging etc of goods and services.

Economical- This factor refers to the economic condition of a country such as inflation, recession, fluctuating interest rates etc. The economic condition of the country directly affects pricing strategy and the ration of sales through which the profitability of business can affect (Gupta And Makrigeorgis, 2016). It is very important for Hormuud Telecom to understand the economic condition before design business plan. Increasing rate of inflation and interest rate can affect the price of telecommunication service in the Hormuud Telecom.

Technological- This is one of the crucial factors in the business environment that can affect the telecommunication service and product in Hormuud Telecom in a large manner. In the present time, it has seen that technology and innovation are continuously increasing through which it directly affects the production, manufacturing, and operation in Hormuud Telecom. For example, Telephone companies install fiber wire in their builds over copper now. In addition to this, mobile phones are become more compact and moving the telecom business into a primarily wireless business. Upgraded devices and new applications along with enormous features like GPS, WiFi etc can influence the production and operation within Hormuud Telecom Due to changing technology advances and innovation, TeleCommunication Company has to invest a large amount of capital. Thus, it can be said that this factor in the business environment can affect the business plan of Hormuud Telecom so it is very important to effectively analyze this factor forget success over a business objective.

Market Analysis

Legal- Government in the telecommunication industry imposed several laws and legislation regarding telecom services, products, employees and customers that should follow by Hormuud Telecom. Specifically issue with government, monopolies, and buyers but the industry has allowed importing and exporting of telecom products and services. Hormuud Telecom must have to follow information communication technology act in its business.

Environmental- This factor consists of global warming, climate and weather changes, and changes occur in natural resources and factors (Goss, 2015). It has been estimated that in the Somalia environmental issues are increasing on daily basis and there is an excessive use of electricity. Due to the air pollution, telecommunication service can influence and by emitting unnecessary radio waves there are strangling cables all over the cities. Thus, it can be said that due to the environmental issue, there is the various impact upon the telecommunication organization. Thus, Hormuud Telecom should analyse the business environment to implement business pan in a successful manner.

In order to achieve its objective to earn huge profitability and market share, Hormuud Telecom will focus upon the following business differentiation strategies-

Low-cost limitation- This is another main strategy to acquire a large number of customer and increase profitability under which it will provide a high quality of product and services in the lowest price (Grünig and Kühn, 2015). The low-cost strategy will help Hormuud Telecom in attract large numbers of the customer as compared to other competitors.

Differentiation strategy- In this strategy, Hormuud Telecom will offer unique features and benefits and facilities and services to its customer along with telecommunication product and services. In this strategy, Hormuud Telecom will deliver creative and distinctive features and offers with its telecommunication services and product through which large numbers of a customer can attract (Anton, 2015). The features will differ from its rivals. For example, it will bring ANFAC package that will get 70 minutes for local call only for every one dollar recharge, its ADSL broadband will provide 24 hours internet a day and also offer the facility to browse web content faster and download file more quickly and other more different featured services it will serve in the country.

•    Hormuud Telecom will serve high quality of telecommunication services and product at the very lowest price as compared to its other rivals in Somalia that is one of biggest competitive advantage.
•    Hormuud Telecom firm will all kinds of telecommunication product and services such as Short SMS text service, SIM card basic premium, Post-paid service, Mobile money transfer, internet services, Fixed line service for residential and commercial, international roaming services etc (Grünig, R. and Kühn, R., 2015). As it provides all kinds of services to all customers such as corporate personal and business is one of another competitive advantage.
•    It has 5000 permanent personnel and fluctuating numbers of staff members (Obeng And Blundel, 2015).
•    Another competitive advantage is its EVC plus service under which it will offer the unique option to transfer and receive mobile money. In the EVC plus account highly secure system through which person can secure its information by 4 digit secret PIN number.

Target market strategy- It is the activity through which a company selects one or more segment for its product and services. Hormuud Telecom will consider upon corporate, personal and business customer for its services. It will focus on the individual customer as well as the corporate customer at the time of producing telecommunication services and product.

Macro Factors Affecting Small Business Enterprises

Product- Hormuud Telecom will serve several kinds of telecommunication services and products in high quality and features such as Short SMS text service, SIM card basic premium, Post-paid service, Mobile money transfer, internet services, Fixed line service for residential and commercial, international roaming services, EVC plus service, basic premium Post-paid service, Top up (Evc Plus, Scratch car, E-voucher), Bulk Payment, mobile services (GSM) , landline and mobile linked internet services such as Hotspot, Adsl-DSL, Mifi4G, W-DSL, Tri-Band 3G mobile and internet client 

Price- It will use penetration pricing strategy for its business for achieve determined objective under which it will sale its telecommunication services and product in lowest prices. This strategy will boost up the sales because every income group of customer will utilise product and services of Hormuud Telecom.

Place- Hormuud Telecom will sell its services by both online and offline manner. It have own physical evidence (stores) in commercial area of Mogadishu Somalia through which customer can easily purchase products (Squicciarini, 2016). On the other hand it will create its own website and mobile application through which customer can order for product and services by online mode.

Promotion- Hormuud Telecom will promote and advertise its telecommunication services and products by use of both moderns and traditional method. It will use social media such as Facebook, You Tube, Twitter, instagram etc for promote its services in the country. On the other hand it will also use print media such as newspaper, Magazines, bill board, Radio etc for promotion.

A sales forecast is essential technique through which Hormuud Telecom will manage business sales and forecast level of sales on monthly basis. Following are sales forecast of Hormuud Telecom-

For analyse the internal capabilities and business activities of Hormuud Telecom, Value chain analysis model can implement within company. This model will help in analysing business operation, management processes, human resource, marketing, sales and other business activities and functions.

Primary Activities

Inbound Logistics- Hormuud Telecom has more than 5000 full time and part time employees that have different specialists. There are 50% of the corporation’s employees are engineers. Hormuud Telecom has effective inbound logistics through which entire procedure of business has effectively managed (Niederwieser and et.al., 2016).

Outbound Logistics- Hormuud Telecom uses both online and offline channels of distribution in its business for sale its telecommunication services (Blackburn, Hart And Wainwright, 2013).

Sales and Marketing- Hormuud Telecom will use both traditional and modern marketing channels through which it will promote its product and services by use of social media, newspaper, magazines, radio, bill board etc in the country (Liu, 2015).

Industry Analysis

Service- It will provide different kinds of telecommunication services to its customers such as Short SMS text service, SIM card basic premium, Post-paid service, Mobile money transfer, internet services, Fixed line service for residential and commercial, international roaming services, EVC plus service, basic premium Post-paid service etc.

Firm Infrastructure- Hormuud Telecom uses high quality of infrastructure and technology in the manufacturing and operational activities through which it delivers high quality of product and services to its customers.

Human resource management- Hormuud Telecom has more than 5000 full time and part time employees that has different specialists. There are 50% of the corporation’s employees are engineers (Yen And Chung, 2017)

Technological development- Hormuud Telecom uses highly advanced technology in its business operation for deliver quality of services and products to its customers. 

Financial Modelling- Financial modelling is a kind of presentation that defines the real world financial situation. It is a model that design to show the performance of financial assets, investment and portfolio of business. 

Conclusion

On the basis of the entire discussion, it has been concluded that Hormuud Telecom will offer unique features of services to its customer. It does not only famous for its reliable service and benefits but also it deals with charity and voluntary work. Tri-band 3G is the first service that launched by Hormuud Telecom Company that offer fasters and secure telecommunication connection. It has been also analysed that Hormuud Telecom objective is to increase 35% profitability from last 6 months and acquire 50% of market share in the telecommunication industry. To achieve this objective, it will consider the penetration pricing strategy and deliver high quality of different featured telecommunication services and products.

References

Journals and Books 

Anton, R., 2015. An Integrated Strategy Framework (ISF) for Combining Porter’s 5-Forces, Diamond, PESTEL, and SWOT Analysis.

Blackburn, R.A., Hart, M. And Wainwright, T., 2013. Small business performance: business, strategy and owner-manager characteristics. Journal of small business and enterprise development, 20(1). pp. 8-27.

Bull, J. W. and et.al., 2016. Strengths, weaknesses, opportunities and threats: A SWOT analysis of the ecosystem services framework. Ecosystem Services. 17. pp.99-111.

Carraher, S.M. And Paridon, T.J., 2015. Entrepreneurship journal rankings across the discipline. Journal of small business strategy. 19(2). pp. 89-98.

Cassar, G., Ittner, C.D. And Cavalluzzo, K.S., 2015. Alternative information sources and information asymmetry reduction: evidence from small business debt. Journal of accounting and economics. 59(2). pp. 242-263.

Choshin, M. And Ghaffari, A., 2017. An investigation of the impact of effective factors on the success of e-commerce in small-and medium-sized companies. Computers in human behavior. 66. pp. 67-74.

Cole, R. and Sokolyk, T., 2016. Who needs credit and who gets credit? Evidence from the surveys of small business finances. Journal of financial stability. 24. pp.40-60.

Ebert, R.J and et.al., 2014. Business essentials. Pearson education canada.

Ellis, J., 2016. The continued appointment of corporate directors: an examination of the effect of s. 87 of the small business, enterprise and employment act 2015. The company lawyer. 37.

Ellis, J.H. and kiely, J.A., 2015. Small business enterprise and development: consultation modes. Journal of small business strategy. 11(2). pp. 48-59.

Goss, D., 2015. Small business and society (routledge revivals). Routledge.

Grünig, R. and Kühn, R., 2015. Global Environmental Analysis. In The Strategy Planning Process. Springer Berlin Heidelberg.

Gupta, R.M. And Makrigeorgis, C., 2016. Prioritization of small business enterprise owner concerns about the affordable care act using the analytic hierarchy process.international journal of the analytic hierarchy process. 8(1). pp. 7-15

Huq, A. and et.al.,, 2017. All the world’sa stage: transforming entrepreneurship education through design thinking. Education+ training, 59(2). pp. 155-170.

Klapper, R., Biga-Diambeidou, M. and Lahti, A.H., 2016. Small business support and enterprise promotion: the case of france. Government, smes and entrepreneurship development: policy, practice and challenges. pp.123.

Liu, Z., 2015. Stategy and progress on treament of pelvic fractures. Zhongguo gu shang= China journal of orthopaedics and traumatology.28(5). pp.389.

Niederwieser, D. and et.al., 2016. Hematopoietic stem cell transplantation activity worldwide in 2012 and a SWOT analysis of the Worldwide Network for Blood and Marrow Transplantation Group including the global survey. Bone marrow transplantation. 51(6). pp.778-785.

Obeng, B.A. And Blundel, R. K., 2015. Evaluating enterprise policy interventions in africa: a critical review of ghanaian small business support services. Journal of small business management. 53(2). pp. 416-435.

Squicciarini, M., 2016. Entrepreneurship, innovation and enterprise dynamics.small business economics, pp.1-6.

Westerlund, M., 2017. Networks, business models, and competitiveness in small finnish firms. International journal of business and globalisation. 18(1). pp. 9-26.

Yen, S.L. And Chung, T., 2017. The study on the relevance between the extent of the japanese family business founder’s leadership style and internationalization.international journal of organizational innovation (online). 9(3). pp. 7a

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