Marketing course
Write essay
7
Case1 (TELUS)
Elham Khani (1810327)
University Canada West
Professor: Dr. Mehdi Akhgari
MRKT 621
February 17, 2020
Core Issues of the Case
TELUS: the known mobile brand acquisition decision is a case that depicts a company that is trying to form a merger with another company, and perhaps evaluating how the other company will fit in. The public company has developed a team that will lead an analysis exercise into the suitability of the integration based on future predictions. Eventually, three options are in the order. In the first option, the TELUS contemplated closing down public brand after its acquisition and relocate the clients to one of the TELUS communication brands.
What this means is that the TELUS is just concerned about growing its client base, by directing one company’s clients to another by forming a merger with the competitors. In the second option, TELUS would continue to operate as a separate entity, although under the same management, while taking advantage of the strategic locations of the Public, which attracted many customers. In the third option, it created a new brand image for the Public. That would mean Publicis given a new name and therefore identified differently in the market, which would paint a picture of a newly created telecommunication company.
Situational Analysis for TELUS
Major competitors for TELUS are Rogers and Bell Canada Enterprises. The current wireless service competition includes services offered by:
1. Resellers of the competitors ’wireless networks like 7-seven
2. Facilities-based national competitors like Bell Mobility and Rogers wireless together with provincial telecommunications firms such as MTS Mobility and SaskTel.
Rising wireless service competition involves
1. Globalize services launched in Calgary and Toronto
2. Other additional entries apart from Globative include cable tv companies that begin offering services with various regional coverage.
The wireless market competition intensity to increase in the future. Apart from the big three telecommunication companies (TELUS, Rodger and bells), the emerging companies are separately branding their essential services and providing better discount offers to better position themselves in the expanding market. TELUS has improved its competitive edge in the market by the launch of a simplified rate plan option with no system access fees and expansion of its distribution through 113 Blacks Photo stores. Black’s stores are insignificant target locations such as malls that complement the existing network of dealers and stores owned by various companies.
There are many new entrants to the market whose aim is to win the market share. They are using aggressive marketing strategies, unlimited usage plans, price discounting and introduction of smartphones. It means that TELUS has to brace itself for stiffer competition in the future.
Market Segmentation
People aged eighteen to thirty-four consist of if the primary target consumer of TELUS. This age bracket consists of students, young family members and graduates. Eighteen percent of this cohort is part of domestic partnerships, and thirty-five percent live on their own in their houses and make close to $50000. Eighty-eight percent of these are active participants of the recycling program, and they are also known to be “free-spirited”. Sixty percent of this target audience are employed and earning an active income from either a full-time job or a part-time job. Eighty-one percent of them are active social media users making over seventy posts per week. TELUS also targets small and medium enterprises by providing integrated services with flexible data and voice sharing plans and reliability guarantees.
SWOT analysis
Strengths
1. TELUS has a strong image brand and hence is associated with the Public will help propel the Public’s reputation. TELUS has over seven million subscribers, 4 million wireline network access lines and 1 million internet subscribers.
2. The firm has an ever-growing client base which helps better the position of the company in the market
3. The global distribution network operated via directly owned subsidiaries strengthens TELUS by supporting its activities.
4. TELUS highly focused on innovation. The company spends quite a fortune investing in research om how they can better and improve their services.
5. TELUS has an active marketing campaign with which Public brand will use to attract potential clients.
Weaknesses
1. With the high brand image, product brands associated with it are highly overpriced, which sometimes makes the customers look for cheaper alternatives from the competitors.
2. Most of TELUS products are imitable. It creates opportunities for other companies to develop cheaper prototypes hence denying the company its desired revenue. As much as the quality is unique, the products imitated are close enough to be acceptable in the market.
3. TELUS operates majorly in Canada hence limited market growth potential.
Opportunities
Diversification of the market-TELUS can venture into the upcoming and growing industries like China and Portugal. It can also diversify the product range. Instead of just services, it can adopt the strategies that have been approved by its major competitors like bells to start manufacturing phones.
Emerging market and expansion abroad. TELUS’s significant customer segment is the price-sensitive segment, which comprises of deal seekers, frugal by necessity and new immigrants. Perhaps as the number of immigrants continues rising in Canada and America in general, it poses a potential growth of customer base.
TELUS has a faster HSPA network compared to the Public, which will act as a significant attracting factor for the Public’s clients if the TELUS decided to shut down the Public after its acquisition. TELUS can partner with different firms that provide similar or almost similar products and services. TELUS has already recorded success with the acquisition of Koodo and Telus wireless. It means that there is also a potential opportunity to acquire or merge with another company.
Threats
Regulatory constraints – the government policy that barres TELUS from instantly dissolving Public after its approval will mean that RELUS will have to incur additional cost for running Public for the next one year from December 31st, 2013 to December 31st, 2014. Perhaps this could limit some of the operations and plan of TELUS, which needs prompt decision making such adjustments of the monthly calling rates which have to remain to be $19.
Increased competition – There is an influx of upcoming communications companies in the market which have the potential of reducing the market share of the company hence sales.
Prices wars competition – As a result of increased firms in the industry, other companies are trying to stay afloat by offering cheaper option products, which are perfect substitutes for TELUS.
The Three Alternatives
In the first option, TELUS contemplates the decision to close down the Public and transferring the Public’s customers to other TELUS brands. However, due to governmental constraints, TELUS will have to keep the Public in operation for the next twelve months while maintaining the monthly subscription rates of $19 (Pastoll, Rochwerg, Vlaar, & Compeau, 2020). However, during this time, TELUS can publicize this move so that customers can start shifting in advance to other TELUS brands. As much as the top executives are for this move, there is no assurance that the customers will move to TELUS brands or not. The second option is to keep ownership of the Public but let it run under the same brand name. The alternative has fewer risks because there is the assurance of clients continuing to be Public clients.
Moreover, there are more chances of its growth because of its many strategic location openings and the improved network speed TELUS will provide the brand. In the third option, TELUS is supposed to rebrand the Public and change its value proposition. Perhaps this is the riskiest option because it will mean that the brand that Public clients associate with will be no more, and thus clients might get forced to shift to other brands. Also, it will mean that the advertising efforts that had been invested by the former management of the Public will go down the drain.
Decision
TELUS needs to adopt the second option, which is allowing the public to continue running as a separate entity under its similar brand. With the fact that the Public had exhibited a recommendable growth rate, it means that there is a niche that the Public company products or brands are satisfying that other companies within the industry are not. Moreover, there are fewer risks involved compared to the alternative of dissolving the company that would be changing the brand image.
The most considerable threat posed by the transfer of clients to other brands of TELUS after dissolving the company, a significant percentage of the customers might end up adopting other products provided by brands that are not part of TELUS. They might shift to use of Bells brands forgoing TELUS, which means loss of clients. TELUS, therefore, needs to operate with the second option of operating under the same brand and value proposition that existed before the acquisition.
References
Herdy, J. W. (2011). A Strategic Analysis of Knowledge Management and its Application to Telus Service Desk.
Murray, D. J. (2002). A Strategic Analysis of TELUS Enterprise Solutions Inc (Doctoral dissertation, Simon Fraser University).
Pach, J. A. (2006). Strategic analysis for competing in the Canadian consumer wireless telecommunications market (Doctoral dissertation, Faculty of Business Administration-Simon Fraser University).
Pastoll, C., Rochwerg, T., Vlaar, B., & Compeau, D. (2020). TELUS The Public Mobile Brand Acquisition Decision. Ivey publications.
Sim, T. (2003). Trunk Reservation Analysis Of Telus’ Edmonton Telecommunication Network. INFOR: Information Systems and Operational Research, 41(3), 275-286.+
Stephens, R. S. (2002). Strategic analysis of TELUS in the Canadian conferencing market (Doctoral dissertation, Beedie School of Business-Segal Graduate School).