Strategic Management for Digi: Industry Analysis and Future Direction

This report provides a strategic evaluation of Digi in Malaysia, a mobile connectivity and internet service provider. It assesses Digi's past strategic direction, marketing, manufacturing, and human resource management capabilities. The analysis includes a detailed industry overview using the VRIO fr...Read More

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Strategic Management

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Executive Summary
Strategic management is the concept which includes planning on continuous basis, monitoring,
analysis and assessment of all the necessary aspects which is important for an organization to
fulfil its goals and objectives. There are number of factors which forced the organizations to
think about the future perspectives and make strategic decisions in this context, as some of these
factors are innovations, emerged technologies, and expectations of customers. This process helps
the leaders of the organization in assessing their company’s present situation, chalk out the
strategies, deploy them, and evaluate the effectiveness of the implemented strategies. This
assignment is divided into five tasks and all the tasks are completed on the basis of the Digi.

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Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Task 1- Strategic Direction...........................................................................................................................4
Marketing capabilities.............................................................................................................................4
Manufacturing capabilities......................................................................................................................4
Human resource management capabilities.............................................................................................5
Task 2- Detailed analysis of the industry.....................................................................................................5
Appropriate framework for strategic analysis-........................................................................................5
Critical evaluation of organizations competitive advantage-...................................................................6
Industry scenario.....................................................................................................................................6
Task 3- Analysis............................................................................................................................................7
Core values for future alignment.............................................................................................................7
Analyse mission and vision......................................................................................................................7
Task 4-Startegies to Defend.........................................................................................................................8
Task 5- Evaluate resource implications....................................................................................................9
Conclusion...................................................................................................................................................9

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Introduction
Strategic management is the process which involves the documentation and explanation of the
strategies that can be carried by managers of the organization for achieving the improved
performance and also the competitive advantage. It is believed that organization holds the
competitive advantage if their productivity in organization is more than the normal productivity
of all the organizations operated in that industry. In this context, it is necessary that manager
must conduct the required assessment and evaluation of the general environment of the
organization and competitors moves in terms of making the right strategies.
This report mainly discusses the strategic evaluations of the Digi in Malaysia, as structure of this
report is divided into five tasks and all the tasks answer different questions related to the
organization. At the end of the report, brief conclusion is stated to conclude the report.
Digi is the organization which provides services related to the mobile connectivity and internet
services which enables the 11.7 million Malaysians to receive the advantageous offers in terms
of connecting with the world. In context of the products and services innovation, organization
holds the ambition to become the Malaysians best digital partners and provide them best
facilities that will permit all the Malaysians to experience a digital lifestyle on their solid 4G+
network.
Task 1- Strategic Direction
Marketing capabilities
The main aim of the Digi is to delivering the profitable growth by heavy more worth from the
business, and activating the growth in terms of the new digital ventures for the long time period.
In context of this, organization delivered best connectivity and best digital services to their
customers, ensure more access with the help of strong digital channels, and are sustained by
superior quality and reliable network experience across the globe.
Organization framed solid strategy in terms of ensuring growth of the organization and also for
improving its market capabilities. In this context, organization continuously challenging
themselves in terms of delivering the consistent 4G internet experienced on their 4G plus
networks which is accompanied with the internet speed of minimum 10mbps for 4G LTE and
20Mbps for LTE-A (DIGI, 2017a).
Manufacturing capabilities
In this context, organization focuses on managing the resources in smarter way and also in more
efficient way. This is done by discovering and accepting the new operating models and digital
tools through which network and IT assets of the organization can be optimized. Further, Digi
focus on giving the priority to the financial discipline of the organization, pursue the process
simplification and also streamline the way in which work is conducted. In other words,
organization focus on improving its manufacturing capabilities and this is reflected through the
improvement of 7.7% in the COGS to RM1.52 billion as the outcome of the lower traffic cost

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from the legacy prepaid facilities. Their persistent charges mainly emphasize on increasing the
gross profit at RM4.83 billion or 76.1% gross margin, a lift of the 1.0pp before a year.
Organization further excludes the cost and exit fees of RM6 million, opex decreased by 2.8%
that is from RM2.01 million to RM1.96 million ((DIGI, 2017a).
Human resource management capabilities
Employees of the organization are considered as key factors for success, and they are determined
to build the inclusive and dynamic workplace that promotes the culture of learning, responsive,
cooperative and innovation 360°. High performance talent continuously develop the digital
capabilities of the organization and further exercise the autonomy to make innovations in
delivering the purpose to connect with the customers (DIGI, 2017b).
Task 2- Detailed analysis of the industry
Appropriate framework for strategic analysis-
In this context, VRIO framework is used for the strategic analysis of the DIGI. This framework
is the strategic analysis tool which includes four aspects that are value, rare, imitability, and
organization. All these aspects in terms of Digi is defined below-
Value- Digi holds the resources that mainly offer the value for the customers and these resources
are in the form of new-digital ventures of the organization for the long-term. Further, its
sustainable approach builds faith and creates shared values for all the sections of the society.
This mainly consists of the advocacy related to the safe internet usage and also builds digital
flexibility among the youth and ecosystem. These programs are the initiates through which
organization is committed from last seven years.
Rare- Capability of Digital resilience and these new-digital ventures of the organization for the
long-term are the rare resources, as no organization in Malaysia initiate any such programs while
working.
Imitability- Ventures in which organization is involves is difficult to copy because all these
ventures are exclusively initiated by the organization and required secrecy is also maintained by
the organization in this context ((DIGI, 2017a/ Clear strategy, 2018).
Organization- Number of changes is made in the management approach for capitalizing these
resources such as advancement in technology of the process and procedures of the organization.
All these potentials and possibilities of the organization to create the value for the customers in
the form of different initiates taking by organization are managed by the organization in proper
manner. Further, organization focuses on creating the healthy stream of innovation for providing
high and valuable experience to their customers (DIGI, 2017c).

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Critical evaluation of organizations competitive advantage-
In this context, Digi used the Grant 5 step model which is introduced by the Hamilton Grant
Formulation in the form of Management Maturity Model. This model mainly evaluates the
organization formulation management maturity. Following are the five important steps of this
model through which competitive advantage of the organization is evaluated-
 Employees of the organization are considered as biggest competitive advantage for the
organization, as people with high-talent is the main reason of all the innovations.
 Employees are the most important resource of the organization because they are willing
to give their 100%, and also focus on fulfilling all the resources of the organization in
effective manner.
 Almost 86% from the top 49 leaders of the organization are from the internal succession
program of the organization, and this includes 4 out of the seven management team
members. Organization further focuses on gender balance and diversity in the workforce,
because it is the most important elements for the competitive advantage and shareholder
value.
 Gender balance and diversity in the workforce automatically enhance the effective
working environment in the organization, and this helps the organization in retaining
their talented employees.
 In this context, numbers of opportunities are available to the organization such as these
employees hold the high-experiencing decision making and it provide ultimate benefit to
the organization in future.
Industry scenario
Relative position of the organization in the industry is determined through the profitability,
which means, whether the profitability of the organization is above or below the industry
average. The basic element of the above average profitability in the long run is the sustainable
competitive advantage of the organization. In this context, Digi used two porter generic
strategies that are cost leadership and differentiation. Both the strategies of the Digi are defined
below-
Cost Leadership- For this purpose, organization try to become the low cost producer of the
industry. For becoming the low cost producer, Digi manage its resources in smarter way and also
in more efficient manner. Organization also adopt new operating models and digital tools
through which the network and IT assets of the organization can be optimized.
Differentiation- In this context, Digi introduce freedom to internet innovations programs, s this
program differentiate the organization from its competitors spend more time on the internet. In
this context, number of data plans are introduced by the organization that provide elasticity to the

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complete family such as extra entertainment on-the-go, borderless roaming, wide -range of time-
based data passes, etc (Porter, no date).
Task 3- Analysis
Core values for future alignment
Core values of the Digi include the responsible and sustainable methods through which value is
created for all the stakeholders of the organization. In this term, organization focus on creating
the high standards of reliability and governance, supplying such services to the clients who
guarantees the security and privacy of the customers. Organization further leverage their
expertise in reducing the inequalities faced by the society and the environment also. All these
values of the organization help the organization in creating the future capabilities, and further
actions are taken by the organization in this context-
 Supply chain sustainability is the concept through which organization ensures fair and
safe workplace for almost 75000 individuals working in the supply chain of the
organization. This is accompanied with the pledge of the organization to reduce the
inequalities and building capacity for their supply chain. All these initiatives of the
organization reflect the rise of 38.7% in the total suppliers who signs the agreement with
the organization. On the basis of responsible business conduct, almost 165 suppliers of
the organization make commitment to promote the ethical conduct, best practices in
responsibility related to the sustainability and environmental.
 Organization further focus on ensuring the growth through its core business and also by
implementing its core digital strategy. In this terms, Digi mainly focus on three aspects
that are driving growth from the core business, digitalize the core, and also grow new
digital businesses.
 Another action taken by organization is capacity building through the training, which
means, numerous workshops amounting to 2690 man-hours being conducted by the
organization for structuring the capacity of contractors and sub-contractors on safety
awareness and also the proper way through which these equipment’s are used.
Analyse mission and vision
The vision statement of the organization states that organization wants to be the Malaysians best
digital partners and provide them best services that will allow all the Malaysians to experience a
digital lifestyle on their solid 4G+ network. In this term, organization conduct efforts on the
spectrum re-farming, fast deployment of LTE 900MHz and 2600MHz overlay sites, and 4G
upgrades at nationwide fuelled strategic coverage expansion of their LTE-A network. Further,
4G plus network quality is strengthening by strong indoor quality, wider outdoor coverage, and
enhancement in the strategic capabilities (Digi, 2017a.

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Vision of the Digi mainly focuses on becoming the star in the best customer experience by
improving the communications for enhancing the quality of life of customers at home, work, and
play. Digi holds very good statement of Vision. Strategists of Digi believe that vision of the
organization attracts the promise and motivate the employees of the organization to strive for an
excellent performance from them.
On the other hand, mission statement of the organization focus on giving the best solutions to the
customers for meeting their individual needs related to the communication, connectivity, and
access to information and security. It further ensures such working environment in which
employees of the organization can grow and fulfil their needs. Digi also gives superior returns to
their shareholders and also contribute in improving the life of Malaysians.
Task 4-Startegies to Defend
AS numbers of corporate strategies are there which can be opt by the organization in terms of
ensuring growth of their core business in future. Some of these strategies which can be used by
the Digi to defend their core business are stated below-
Merger/Acquisition- This is the most important business strategy which can be used by the Digi
to ensure growth of their business in future. In this strategy, organization buy, sell or combine
the different companies across the globe for making more opportunities in the future. Mergers
and acquisitions are the popular business strategy through which organization expands their
business in new markets or territories, it further gain the competitive advantage, or focus on
acquiring the new technologies and skills sets (Bruner, 2004).
In this context, organization focus on being the part of Telenor which allow them to control scale
and opportunities in different areas such as acquisition on global platforms, strategic partnership
with the global digital companies, and the expansion of the adjacent digital business
opportunities. This further covers the expansion of business in the potential areas of growth such
as financial and cloud storage services. It further includes the capabilities for personalization of
digital services, and recommends engines for the growth of product and digital distribution
(Sudarsanam, 2003/ Digi, 2017a).
Growth strategy- This is the competitive strategy which can be used by the Digi in terms of
ensuring its future growth. Following re the two methods of this strategy which can be adopted
by Digi-
 Horizontal integration is another competitive strategy in which Digi can acquire the
business activities which are occurred at the same level of value chain either in related
industry or dissimilar industry. Under this, Digi can acquire those organizations to which
they outsource their important tasks under their value chain.
 Vertical integration is another competitive strategy through which complete control is
exercised by the organization over one or more than one phases in the manufacturing or

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dissemination of the product. In this Digi, can focus on the value chain activities of the
organization related to their distribution chain (Suttle, 2018).
Diversification strategy- diversification strategy is the growth strategy through which
organization can expand its business activities in other markets or industry as well. In other
words, this strategy can be used by Digi for expanding its processes by adding markets, products,
services or stages of production to the existing businesses. The main aim of this plan is to permit
the organization to enter into the line of business that is completely different from their current
business processes. For Digi, concentric diversification is more suitable because in this new
venture initiated by the organization is strategically connected with the existing operations of the
business (Newton, no date/ Hyland, 2013).
Task 5- Evaluate resource implications
Following are the basic tools which can be used by the Digi for evaluating and analysing the
aspects which stated in above tasks-
ROI- ROI stands for return on investment which is used for measuring the performance of the
organization in terms of evaluating the efficiency of the investment or comparison between the
efficiency of different number of investments. In terms of Digi, there are number of investments
made by Digi and all these investments give profitable return to the organization. These
profitable returns clearly states that all the above mentioned strategies work well for the
organization.
This can be understood with the example, as organization witnessed their best post-paid revenue
growth of 12.1% which shows the further enhancement from the year 2016 when post-paid
revenue grew 10.2%. Service revenue of the organization remain resilient at RM5.91 billion,
albeit single digit decline at 5.0%, in line with guidance.
Internet revenues of the organization strengthen 16.5% to RM 2.70 billion or 45.6% of service
revenue; alongside it increase in the smartphone adoption to 72.7% and active internet
subscribers to 73.7%, as it also represents almost 8.7 million customers (DIGI, 2017a).
Achievement- Organization achieve number of milestones with the help of above strategies and
aspects, as there is increment of 12.1% post-paid revenue, 16.5% in the internet revenue, 0.7% in
EBITDA margin, and 40% call reduction to call centre margin (DIGI, 2017d).
Conclusion
After considering the facts of above report that that Digi mainly follows the strategy related to
the high quality digital provider, as it main aim is to give best services to the customers and meet
each and every requirement of the customer by giving them best service experience.
Organization framed solid strategy in terms of ensuring growth of the organization and also for

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improving its market capabilities. The main aim of the Digi is to delivering the profitable growth
by driving more value from the company, and engaged in new digital undertakings. Organization
also delivered best connectivity and best digital services to their customers; ensure more access
with the help of robust digital channels.
Digi holds the resources that mainly offer the value for the customers and these resources are in
the form of new-digital ventures of the organization for the long-term. Further, its sustainable
approach builds faith and creates shared values for all the sections of the society. This mainly
covers the advocacy related to the safe internet usage and also builds digital flexibility among the
youth and ecosystem. These programs are the initiates through which organization is committed
from last seven years. In this term, organization focus on creating the high standards of reliability
and governance, distributing such services to the clients who guarantees the safety and privacy of
the customers. Organization further leverage their expertise in reducing the inequalities faced by
the society and the environment also. All these values of the organization help the organization
in creating the future capabilities
References
Bruner, R. F. (2004). Applied Mergers and Acquisitions. Hoboken, New Jersey: John
Wiley&Sons, Inc.
Clear strategy, (2018). Explaining the VRIO Framework (With A Real-Life Example). Available
at https://www.clearpointstrategy.com/vrio-framework/. Accessed on 24th October 2018.

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DIGI, (2017a). Annual Report 2017. Available at
http://www.digi.com.my/annualreport/images/pdf/download/full-annual-report.pdf. Accessed on
24th October 2018.
DIGI, (2017b). Our Business. Available at
http://www.digi.com.my/annualreport/images/pdf/download/our-business-strategy.pdf. Accessed
on 24th October 2018.
DIGI, (2017c). Management discussion and analysis. Available at
http://www.digi.com.my/annualreport/images/pdf/download/management-discussion-
analysis.pdf. Accessed on 24th October 2018.
DIGI, (2017d). Corporate Governance Overview Statement. Available at
http://www.digi.com.my/annualreport/images/pdf/download/corporate-governance-overview-
statement.pdf. Accessed on 24th October 2018.
Hyland, B. (2013. Growth Strategies for SMEs. Available at https://www.enterprise-
ireland.com/en/events/ourevents/finance-for-growth/growth-strategies-for-smes.pdf. Accessed
on 24th October 2018.
Newton, P. Organizational Growth Strategies. Available at http://www.free-management-
ebooks.com/dldebk-pdf/fme-organizational-growth-strategies.pdf. Accessed on 24th October
2018.
Porter, M. COMPETITIVE ADVANTAGE. Available at
https://www.albany.edu/~gs149266/Porter%20(1985)%20-%20chapter%201.pdf. Accessed on
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Sudarsanam, S. (2003). Creating Value from Mergers and Acquisitions The Challenges. Prentice
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https://smallbusiness.chron.com/growth-strategies-business-4510.html. Accessed on 24th October
2018.