Business Strategy

Mid Term Examination (Part B)

Submitted to:
Sheikh Morshed Jahan
Associate Professor
Course Instructor
Business Strategy

Submitted by:
Mokaddim Jashim Bhuiyan
BBA 18th Batch, Roll# ZR 94
Institute of Business Administration
University of Dhaka

November 26, 2013

Question 1a. Pick an Industry of your choice and give a brief (1 page) overview of the industry.
Answer: The Industry I have chosen is Internet Service Provider (ISP) industry. Throughout the next
seven parts of the question, I will be discussing based on this industry.
The history of internet is not that old even in developed countries. The people of Bangladesh had to remain
in dark about it for a long time because of the non-availability of the service in this part of the globe. The
main obstacle to start the service was to have data circuits to a suitable overseas location. However in this
condition a few young talents started dialup e-mail service and made it commercially available for public
use. In late 1995 the government of Bangladesh invited applications to subscribe the VSAT (Very Small
Aperture Terminal) data circuits.
On June 4, 1996 the VSAT base data circuit was commissioned for the first time in the country. Upon
VSAT commissioning, internet connectivity was established & its services were made available to the
public. After internet was launched, the June 1996 National polls results were made available to the
netizens of the world using World Wide Web. This was the first ever usage event of its kind in Bangladesh.
The effort was appreciated in many corners especially among the Bangladeshis living abroad.
After the introduction of Internet, the use of email increased exponentially owing to point to point direct
transmission. Prior to it dialup links were used to communicate to an overseas e-mail server using
international phone calls. The uploading & downloading of mails took place using UUCP (Unix-to-Unix
copy).
The mid 1996 introduction of Internet did not instantly create a market. At the end of year, there were only
two ISPs in the country and the number of users was close to one thousand only. The year 1997 recorded a
tremendous growth. The total number of ISPs was more than a dozen and the clientele growth was ten
times higher than that of the previous year. Afterwards, a few new ISPs started their venture recording a
proportionate growth in number of users. However, more liberal Government policies followed in the
subsequent years which led to a rapid expansion of this industry, eventually resulting in over 180 registered
ISP's by 2005. In 2006 Bangladesh got connected to the SEA-ME-WE 4 Submarine cable. After that, many
ISPs found the opportunity to connect the submarine cable via Bangladesh Telegraph and Telephone Board
(Now BTCL). This is the time when number of internet users increased by quite a big margin as bandwidth
quality and price became affordable to general individuals. Over the years BTCL reduced the bandwidth
price at regular intervals which attract more and more users towards the internet cloud.
As of now, Bangladesh Telecommunication Regulatory Commission (BTRC) has about one hundred and
sixty six registered ISP license holders and there are approximately Four Hundred and Fifty (450) thousand
users connected to them which is about 0.32% of the total population.

Question 1b. Outline the Industrys Global Value Chain (GVC) and indicate the related and support
industries along that GVC.
Answer: The global economy is increasingly structured around global value chains (GVCs) that account
for a rising share of international trade, global GDP and employment. Global Value Chain (GVC) presents

the full range of activities involved in creating, producing and delivering a product, when divided among
several companies and spread across the world. The GVC framework allows one to understand how global
industries are organized by examining the structure and dynamics of different actors involved in a given
industry.

The ISP Value Chain: The ISP sector of Bangladesh consists of a detailed and integrated value chain just
like the sector anywhere else on earth. Effective performance in each and every layer of the value chain is
necessary to ensure the overall efficiency of the industry.
Industries need fully developed and independent supply chains in which producers sell to wholesalers, who
in turn sell to retailers, who in turn sell directly to the public. The only exceptions to this rule are small
boutique businesses and ISPs are anything but that. Though it is generally permissible for factories to sell
direct to the public through outlet stores, and to bypass wholesalers to serve the largest of the retail outlets
through direct national accounts, there are virtually no industries that can thrive by cannibalizing their own
supply chain.
The Internet supply chain consists of the transport factories telephone, cable, satellite, power grid and
other companies who own and maintain the networks, and wholesale.
ISPs, who do not own the network, nonetheless are the critical resale outlets that sell the capacity of the
factories to the end consumers. Consumers then make use of that capacity to create works and products
that are shared in a common marketplace with other consumers. In the early days of the Internet, it was
conventional wisdom that the Internet was the engine of disintermediation that it would collapse supply
chains to facilitate direct sales. This has proven largely untrue, even for the Internet itself.

The fact that the Internet supply chain has been slow to evolve is due to two factors.
First, larger companies engaged in the
Internet misinterpreted the nature of the
Internet. Telephone companies,
accustomed to operating as a single
supply chain in and of themselves, tried
to move the Internet to fit that model.
Cable and satellite companies,
meanwhile, tried to bend the model to
fit that of cable, in which the content
providers are the factory and the
transport companies are the
wholesale/retail channel for that
content. Both types of companies
missed the central point that the product
being purchased by consumers is
connectivity, not content. The inability

to grasp this fundamental has resulted in billions of dollars in wasted investment chasing killer
applications such as streaming video and interactive television.
In this respect, Internet consumers more closely follow the narrow-casting model: there is no single reason
why the majority will want broadband, just as there is no single reason why consumers subscribe to any
given magazine. What consumers are purchasing from the Internet supply chain are the means and tools to
connect comfortably, reliably and securely in order to share information and content with other consumers.
Second, the supply chain was wrecked in its infancy by the misapplication of onerous and burdensome
telephone regulations by the Congress and the Federal Communications Commission.
In passing and implementing the Telecommunications Act of 1996, the Congress and the FCC barely
considered the potential impact on the Internet industry they were attempting to stimulated competition in
long distance and local telephony. By not considering the Internet, however, these two forces of
government policy provided financial incentives for the Internet industry to telescope the supply chain
forcing ISPs to try to compete with their own upstream providers, and forcing the telecommunications
factories to attack their own distribution channels in response. The result has been chaos, acrimony,
widespread business failures and significant deterrents to the deployment of faster, cheaper, better Internet
services to consumers.

Roles of Stakeholders
A stakeholder on the Internet is defined as an abstract entity that could take on one or more roles and run
them as a business. The role of a stakeholder on the Internet can be classified according to different criteria.
At the highest level of abstraction, the criterion is the position of the stakeholder in a business transaction.
The business transaction is defined as the delivery of a service, which may or may not be free. Applying
that, two roles of stakeholders can be identified:
Consumer: A consumer (also named Customer) uses a set of services provided by one or more service
providers. A consumer might be a person or a corporation.
Service Provider: The stakeholder in this role will provide services for consumers. The type of service and
the duration of the service might vary widely. The service may or may not necessarily use the Internet.
According to this classification, a consumer can also be in the service provider role, by reselling the service
purchased (with or without adding value to it). Similarly, a service provider can be a consumer of a service
it sells. In general, a stakeholder can always be in more than one role. It also might be that a stakeholder
takes on a certain role in one business relationship and does not in another.
In order to distinguish those stakeholders in more detail, we classify the stakeholders according to the type
of service they provide or consume. We suggest introducing two service layers reflecting two main types of
services: the Infrastructure Layer and the Internet Service Layer.

Question 1c. Discuss the dynamics of the industrys GVC, highlighting at least 3-4 most important
issues pertinent to the evolution of industry over time.
Answer: The stakeholders of the Internet
service layer are characterized by providing
and consuming Internet services. An Internet
Service is defined as a service that can be
provided on the Internet. At this level of
abstraction, the Internet service can be a
network service (e.g. IP service, RSVP
service) as well as information service (e.g.
stock market quotes). According to the
definition of this layer, we determine three
roles that a stakeholder of the Internet
Service Layer can play.
The roles are Connectivity Service Provider,
Information Service Provider, and End-User.
Stakeholders, who belong to the connectivity service provider or information service provider, are also
called Internet Service Providers. The roles are defined as:
Connectivity Service Provider: A connectivity service provider is a stakeholder who provides the means
to forward IP data packets on its network. A connectivity provider can be an access provider, a backbone
service provider, a data center provider, and an end-user network provider.
Information Service Provider: The stakeholder in this role provides services on top of the network
services provided by the connectivity service provider. An information service provider processes
information and/or supplies consumers with information. Application service providers, content providers,
Internet retailer, communication service providers or market place provider belong to this class of service
provider.
End-User: In contrast to the definition of a consumer, an end-user is a consumer who does not resell a
service, which it consumes.
In order to be able to describe the business relationship between information service providers,
connectivity service providers, and end-user, a definition of roles within each of these groups of
stakeholders is necessary.
Connectivity Service Provider
The connectivity service provider can be classified according to the functionality of the IP network within
the Internet. Therefore, we can distinguish four types of connectivity service providers:
End-User Network Provider: The stakeholder in this role can be the end-user itself or a corporation. The
end-user is responsible for the network (e.g. a single PC or a LAN) or uses the network of a corporation she
belongs to.

Access Service Provider: An access service provider covers the last mile between the end-user and the
backbone, utilizing copper lines, fiber lines, or radio technologies. The DSL provider and the local
telephone company (BTCL) that provides the telephone line for connecting to the Internet via modem are
access service providers. Other examples of access service providers are mobile service providers or wireless service providers.
Backbone Service Provider: A backbone service provider connects access providers to its high capacity
network.
Data Center Provider: The role of this stakeholder is to provide a secure facility to information provider,
guaranteeing high reliability and availability of their servers and high-speed connectivity to backbone
providers.
Information Service Provider
Information service providers can be classified according to the kind of information they deliver. We
distinguish five different roles that a stakeholder can take on:
Application Service Provider: The service of an application service provider comprises the lease of usage
time of software applications they own. The application software provider takes care of maintenance and
management of the software. Examples of such applications include FileMaker.
Content Provider: Content providers collect, organize, and present information. There are content
providers as, for instance, Marketwatch and CNN, which specialize on certain topics. Other content
providers help people to find information quicker (e.g. Yahoo!).
Internet Retailer: A stakeholder in the role of an Internet retailer sells products on the Internet. Examples
for product retailers are Amazon.com and Barnesandnoble.com.
Communication Service Provider: The communication service provider offers services like Internet
telephony, email, web-site hosting, or fax. Companies like Net2Phone, AOL, and efax.com belong to this
group of Internet service providers.
Market Place Provider: A market place provider operates and maintains an environment for service
providers and consumers to offer, respectively, request services. In both cases, consumers can easily
evaluate services. Examples of this kind of service provider include BandX and RateXchange.
Infrastructure Layer
The infrastructure layer consists of all those providers that provide service to stakeholders of the Internet
service layer, but do not directly conduct business in the Internet service layer. The service provided may
or may not use the Internet. Some of the stakeholders that belong to the Infrastructure layer are:
Network Component Provider: A stakeholder in the network component provider role owns network
lines or computers, which it leases to other stakeholders. This stakeholder is not involved in any kind of
data transmission.
Financial Service Provider: A financial service provider provides a service for completing the money
transfer. An example for such a stakeholder is a credit card company.

Billing Service Provider: This stakeholders role is to provide a billing service to stakeholders who
outsource their billing of customers.
Two important issues here are: 1. Money Flow 2. Value Flow
1. Money Flow: The revenue streams of ISPs vary widely. It is difficult to determine whether and
how much money is transferred between two stakeholders in a business relationship. The direction
of the money flow and the amount depends mainly on the market power of the ISP, i.e. the size of
the network, the number of subscribers for the service, and the kind of service provided. However,
in order to get an overview about possible revenue streams, we give some examples here:
Backbone service providers get usage-based revenue from termination agreements with
access service providers: Access service providers charge customers according to the time
being connected to the network and this charge is split between the access service provider
and the backbone service provider.
Revenue of an ISP with many subscribers might also come from agreements with Internet
retailer and content providers connected directly to the ISPs network.
Backbone providers revenue streams depend on the size of their backbone network, the
location of the network within the global network, and the nature of the information flow
over the interconnection point.
2. Value Flow between ISPs:
An
example of possible business
relationships between a
generic
ISP and other four
stakeholders is shown in in
the
given figure. It is assumed
that the
generic ISP offers free email
service
and backbone connectivity to
its
residential end-users. Endusers
connect to the generic ISPs
modem
pool by using the local telephone service. The local telephone company is the access provider in
this scenario. In addition to this, the generic ISP is supposed to have one single backbone
connection to the rest of the Internet. The generic ISP also teamed up with an Internet retailer for
offering products to its customers.
The money flow of the generic ISP (shown in Figure 3) comes from the termination fee
from the local telephone company, the advertisement placed on the its web-site from the
Internet retailer, and the sales commission of the deals done by the Internet retailer. Since
the generic ISP owns and manages its own network, it only has to pay for the backbone
connectivity to the rest of the Internet.
The service flow of the generic ISP is reverse to the money flow in this example, except that
there is an additional service flow to the generic ISPs customer. The end-users are getting
the backbone connectivity service for free.

Question 1d. Pick a company of your choice that belongs to the industry you have chosen. Perform a
SWOT analysis for the company along the dimensions of TTF (Triple Triangle Framework).
Answer: The Company I have chosen for this part of the question is BDCOM Online Limited. In this
section I will briefly introduce BDCOM online Ltd and then will then focus on crafting the SWOT analysis
based on the dimensions of TTF.
BDCOM Online Limited is a trusted name for Internet Service. From the beginning BDCOM envisaged
Total Excellence as its principle for guiding light, around which revolves its entire spectrum of activities.
With the unique vision, BDCOM is the forerunner in the value centric service Market place and an
architect of high value end-to-end ICT solutions and software for both National and International market.
BDCOM was incorporated as a private limited company on 12th February 1997, under the Companies Act,
1994, and registered with the Registrar of Joint Stock Companies. Subsequently, the Company has
converted into a public limited company in 2001 with a view to float its share to the public.
Business background:
BDCOM Online Limited started as ISP in 1997. Initially its operations were limited to only Internet
Services. Now BDCOM provides seamless fast Internet service with round-the-clock customer support
distributing from different POPs around the country and many other services like Custom software
development and Automatic Vehicle Tracking Services.
BDCOM Software offers specialized products for PC and Corporate use. BDCOM started its Desktop
product in P2P communication software and later included Unicode based Multi-lingual applications as its
major target. It has a highly experienced team working on Transliteration, Phonetic and UNICODE based
Bangla System in Windows Platform. On the other hand, BDCOM is one of the prominent Software
developers for Corporate Solution, especially in Enterprise Resource Planning software. It provides onestop-solution for Pharmaceutical, Telecommunication, ISPs, Finance and Multinational Agencies. The
Company has so far been successful to put together a star team of ICT specialists, engineers and marketing
personnels who are serving this pioneer Company round the clock to grow as one of the largest and most
versatile IT Company in the country.
SWOT and triple triangle framework (TTF) techniques are used to synthesize the findings and to devise a
strategic plan of action. While SWOT analysis is a widely used tool, TTF is a new tool developed and used
in the analysis of market development interventions and policies. TTF uses three triangles, each
summarizing the factors that affect business competitiveness at different levels. The inner triangle with
each of the three sides symbolizing either capacity, or capital or culture explains the internal, largely
controllable dynamics of firms. The middle triangle with each of its three sides symbolizing either a
customer, or a competitor or a collaborator describes the immediate, industry-level context in which
firms work. The outer triangle with each of the three sides symbolizing either technology, or state or
society and global forces presents the macro environment, a largely non-controllable setting in which
firms have to operate. Figure 1 below illustrates the TTF.

SWOT analysis and Triple Triangle Framework analysis:

This section presents SWOT and triple triangle framework (TTF) analyses and identifies major aspects and
issues of BDCOM Online Ltd as an ISP. Both types of analyses create a basis for business competitiveness
action plan proposed in the next section.
Strengths
Customer service: BDCOM has stuck to the basics and provided the two things that customers of Internet
service want speed and volume. Broadband users tend to use up large amounts of data and they want it
fast. BDCOM has managed to give a fair balance between the two features.
Wide coverage: For a broadband service company, the matter of speed and volume are of great importance.
BDCOM has not only ensured speed and volume at par with competitors, but they have also expanded their
service in terms of area. What started out in and around Dhanmondi, now is an operation available in
Sylhet and Chittagong as well.
Value added Services (VAS): BDCOM has not just constrained themselves to providing Internet service.
They are not simple ISP-s but a whole lot more. The products and services, mentioned previously, show the
wide range of solutions BDCOM can provide that is giving them a 360 IT-solution. From simple features
such as complete scanning, they go on to provide services such as Automatic Vehicle Location System
(AVLS).
Customization: BDCOM tries to provide its customers with the solution they require rather than forcing
them to take a solution that doesnt fit their needs. It is with such levels of customized product/service
offering that BDCOM has an edge over its competitors by a mile.

Weaknesses
Centralization: BDCOM understood the need and feasibility to expand outside its own domain. However,
they have not capitalized on areas with booming Internet demands. They have focused mainly on the busy
areas of Dhaka and thus missed out on large segments lying untapped.
Mobility: With widespread use of smartphones and the need for people to have internet on the go, mobility
is a big issue for all broadband companies, BDCOM included. BDCOM needs to come up with a strategy
to hold on to their existing customers who may look to switch for mobility over other features of BDCOM.

Opportunity:
Adaptation to New Technology: BDCOM has, over the years, served its customer in the seasoned platform
of Broadband internet service. But over the course of time, newer technology have come to market. So
BDCOM now has a wider frame to look upon and operate therein. They can now diversify their resources,
manpower and Exclusive Intelligence Property (EIP) to capitalize on new technology like WiMax, 3G etc.
Large Population Base: No matter which industry one is operating, no matter how big or how tiny his or
her influence in the market is, the ultimate target for any business is to sustain in the market for a longer
period of time and sell products. Therefore, a large population base always works in favor of sustainability
of a business, both in terms of revenue and credibility. BDCOM currently faces the challenge to cover a
country of more than 160 million people. This is always a great opportunity.
Collaboration: In this extremely competitive market, mere one-dimensional market and industry
understanding is often causes massive loss to a particular enterprise, which results in extinction or lack of
sustainability of it. So, collaboration among key players is a vital step towards achieving sustainability,
both short and long term. BDCOM has a great opportunity at hand to collaborate among other key players.
Threats:
Low switching cost: Customers generally opt for better alternatives at similar or a bit higher price.
Currently ISP industry is experiencing a crucial turn in our country. With so many player involved,
customers always have the upper hand to switch to new service in order to get a better experience in
internet access.
Multiple Player Scenario: The ISP industry possesses many players currently. Their EIP, special
equipment, resources and understanding of the market from several different perspective. So, BDCOM
faces severe challenge to cope up with multiple players multidimensional behavior in the industry and
contain the customer base and, if possible, further expand it.
Question 1e. Based on the analysis above, identify (along the dimensions of TTF) two most significant
strategic issues facing the company at this point in time. Discuss their significance in detail.
Answer: As per the discussion above and if we look at BDCOM Online Ltd.s current activities, the
following focuses will drag our attention:

 BDCOM Online Limited is not a typical Internet Service Provider. It has had substantial
contribution in digitalization of public and private sectors in Bangladesh
It has a wide coverage area, much more than usual broadband service providers, but less than the
WiMAX service providers.
Only ISP with 15years of ICT service experience portfolio. To maintain this Quality of Service
(QoS), BDCOM intend to expand its network to 10Gigabit capacity.
In the Telemetric industry, BDCOM was the first company in Bangladesh to introduce Vehicle
Tracking and Fleet Management. Services such as Container Tracking, Spy Tracking and Hybrid
Tracking system for marine transportation are also on way to being produced.
Well-trained ICT personnel who are ideally suited to provide creative problem-solving and
technologies needed for system integration
BDCOM has been working to provide Mobile Money Platform for Banking sector
BDCOM software department has been working to develop soft-switch for international
IPBX/VOIP market, with the prospect of opening its International wing.
In light of these activities, we can conclude that here are the two most significant strategic issues facing the
company at this point in time:
Whether, or not, BDCOM should go with the collaboration strategy and share its intellectual
property with the other player;
Whether BDCOM should shift its resources in order to cater its operational activities with an eye on
newer technologies or should they stick firmly to their current technological field (i.e. Broadband
Internet Service)
Collaboration: Collaboration with the other players from ISP industry involves several questions to be
answered for BDCOM:
Whether they will share all or portion of their Exclusive Intelligence Property (EIP)
If shared, assess the risk of disfavor from the competitors
How are they going to gain leverage from the collaboration i.e. identify the different sides of the
process
Define and do proper paperwork of the collaboration
Find and form proper Alternate Dispute Resolution (ADR) (if needed) and include it in the
paperwork
New Technology: Following are the issues that BDCOM must follow when considering shaping into new
technological platform:
What specific tech-platform they would use? (wireless broadband, 3G, wimax etc)
If resort to a new tech platform, assess the existing players strengths and weaknesses and operate
accordingly
What portion of resources to be allocate to accommodate new technological shift

Question 1f. What strategic move(s) do you recommend for the company to pursue in order to address
the strategic issues mentioned above (in 1e)? Offer a detailed justification of your recommendation.
Answer: In order for BDCOM to achieve sustainability in the short and long run, they must make some
strategic moves. These move include looking into their own strengths and weaknesses along with keeping a
conscious eye on what their competitors in the same field are doing.
Draw an outline as to where BDCOM wants to see itself 10 years down the line and relocate its
resources accordingly. This will ease the pressure of focusing too many things at a time for
BDCOM. This way, they can only focus on the time aspect of the resources and act and plan
accordingly
Develop model as to whether, and how, their actions will affect their own operation, the industry
and the state and society itself. No one is above the society. Everyone must be accountable to
society as to how and why it seek profit for its existence. Every business entity must be reasonable
to do so. They must operate within the boundary which entails betterment for the society and not
harm any entity or community
Develop and form proper litigation process and prepare a framework to assess the workload
concerned. Since they will be handling many clients from different levels and layers, they must be
prepared to handle them with proper acumen and deal with them being well informed.
Diversify in their business, i.e. blend a technology shift of existing one and the newer ones. It is
always a good idea for a firm to adapt to changing market needs and demands. New technology
will eventually replace older Broadband technology. So BDCOM should sit and plan for 5 years as
to what portion of resources to allocate to new technology. We suggest to allocate 70% under
current infrastructure while investing the rest 30% in newer tech shift.
Prepare a detailed analysis of the marketing and industry understanding that BDCOM possesses.
Identify and assess the EIP they possess. Form proper paperwork to secure them in a proper
manner in the event of collaboration. Resort to exclusive litigation procedure, if needed.

Question 1g. Outline a model (by sketching a diagram/flowchart) that synthesizes your answers to the
questions above.
Answer:

The World- A
global village
and access to
information
being demand
of time

A wider
consumer base
to serve, thereby
helping
Bangladesh grow
in the global
community

Internet
access
facilitating the
right to know,
see and
believe

Collaboration
and securing EIPcollective image
of market
understanding

ISP industry is
globally
recognised as
an important
tool for right
to
information

Adaptation to
new technology,
with
concentration on
holding strong
field of expertise

Bangladesh in
early 90s
experienced
surge
information
flow

BDCOM, as
example, must
formulate
strategies for
sustainability as
embodiment of
the ISP sector

Expansion of
ISP sector in
Bangladesh

3G and beyond,
Bangladesh
seeks global
connectivity

Early
innovations as
Intranet, DSL,
Dial Up
connectivity

Advent of
modern
technologyBroadband and
wireless
connectivity in
2000s