Business Plan Report: Manchel Telecom's Outsourcing to India Strategy

This report presents a comprehensive business plan for Manchel Telecom, a UK-based company, outlining its strategy for outsourcing operations to India. The plan begins with an introduction to outsourcing and the selection of Manchel Telecom as the case study. It then delves into a detailed STPD (Segmentation, Targeting, Positioning, Differentiation) analysis to identify and understand the target market. A PEST (Political, Economic, Social, Technological) analysis provides an overview of the external factors influencing the business environment in India. The report further includes a financial analysis, detailing cost estimations, budget allocations, and start-up expenses. Value propositions, product features, a SWOT analysis, and Porter's Five Forces model are also incorporated to evaluate the company's competitive position. Risk and competitor analyses conclude the report, offering strategic recommendations and insights for Manchel Telecom's successful outsourcing venture. The document aims to provide a clear understanding of the outsourcing process, its benefits, and the challenges involved, offering a practical framework for similar business ventures.

Running head: DEVELOPING ENTERPRISES
Developing enterprises
Name of the student
Name of the university
Author Note:

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DEVELOPING ENTERPRISES
Table of Contents
Introduction......................................................................................................................................4
Background......................................................................................................................................4
Part 1................................................................................................................................................5
Business Idea- Out Sourcing.......................................................................................................5
Part 2................................................................................................................................................5
STPD Analysis.............................................................................................................................5
Segmentation...........................................................................................................................5
Targeting..................................................................................................................................6
Positioning...............................................................................................................................6
Differentiation..........................................................................................................................7
PEST Analysis.............................................................................................................................7
Political....................................................................................................................................7
Economic.................................................................................................................................8
Social.......................................................................................................................................8
Technological..........................................................................................................................8
Part 3................................................................................................................................................9
Financial Analysis.......................................................................................................................9
Cost Estimations........................................................................................................................10
Table 1: Budget of Manchel Telecom...........................................................................................11

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Cost estimation of start-up expenses.........................................................................................11
Table 2: start-up expense of Manchel Telecom.............................................................................12
Part 4..............................................................................................................................................12
Value Propositions Statements..................................................................................................12
Product Features and Statements...............................................................................................14
SWOT Analysis of Product.......................................................................................................15
Porter’s Five Forces Model.......................................................................................................16
Figure 1- Five Forces Model.........................................................................................................16
Risk Analysis.............................................................................................................................16
Competitors Analysis.................................................................................................................17
Conclusion.....................................................................................................................................17
Recommendation...........................................................................................................................18
References......................................................................................................................................19

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Introduction
The following report is based on the creation of a business plan for an UK based
company that wants to outsource to India. Managed Services is one of the most fastest growing
US$ 16 billion industry that has been continuously attracting telecom equipment vendors who
have been showing increasing interest to benefit from their existing competence and take up new
roles in the value chain that takes into account some activities like building the networks,
planning and designing the networks or some critical field operations (Nalwaya and Vyas 2014).
The last few years have seen a rise in the awareness of the operators who manage the different
network services. Outsourcing services is now becoming one of the standard elements of telecom
operator procurement process (Rodan et al. 2014). The report will highlight the different aspects
that help to create a business plan for a business. The researcher has selected Manchel Telecom
as the organization for creating the report.
Background
Manchen Telecom is a holding company which is the owner of the British
Telecommunications plc, which is a multinational telecommunications company headquartered
in London. The operations of the company is spread over 180 countries in the globe where it
owns a number of subsidiaries and other companies. The main products of the company include
Fixed-Line Telephony, Broadband Services, Digital Telecommunication, Supply Chain
Management, BPO and many other related services. The mentioned company was established in
the year 1846 with the name of the Electric Telegraph Company. The present name of the
company was acquired in 1980 and it was privatized in the year 1984. The mentioned
organization has annual revenue of pound 24.062 billion and a profit margin of close to pound 2

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billion as per the latest statistics. The high tax surcharges and other critical policies force the
company to outsource their business to different parts of the world especially in the developing
Asian countries. India has recently become a top destination for global outsourcing because of
the cheap rates and the low cost involved. The mentioned company like the many others in the
business has thus a wide presence in India.
Part 1
Business Idea- Out Sourcing
Outsourcing is referred to as the agreement that is entered between two companies where
one of the companies contracts out a part of their existing internal activities to a different
company. This activity involves contracting out business processes and other operational
processes like manufacturing, facility or call centre support to other parties (Lacity and
Willcocks 2014). The term outsourcing includes both the foreign and domestic contacting and
sometimes includes relocating a business to a distant country or a nearby country close to the
actual area of operations. Outsourcing involves a contractual agreement between two
organizations for the exchange of services, expertise and payments.
Part 2
STPD Analysis
Segmentation
The company will try to attract the customers who are above the age of 18 years and are
facing problems in their lives regarding the use of machineries or paying their bills. The
company will try to cater to all the needs of the customers by providing them with better

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recommendations regarding the problems that they face in their daily lives. It will also benefit
the banks that are present in the market by tying up with them so that the company can provide
solutions to those customers as well. This will help the company in increasing its base of
customers. The company will mainly focus its market on the urban people who do not have the
time to maintain their own operations (Ikerionwu et al. 2014). The employees will be providing
them with the ideas to solve their problems when they get stuck with any work.
Targeting
The company will mainly target the men and the women who are working in office, as
they do not have the time in solving their own problems. This will allow the company in gaining
more number of customers, as they would be targeting the working society that is available in the
market. Apart from the working individuals, the company will also target the older people living
in the society, as it will help in providing them with better solutions if they get stuck in some
work (Ma et al., 2015). This is an opportunity for the company as well, as most of the aged
people have a disability with learning the new techniques due to the factor of age. This prevents
them from performing the work in a proper manner, which can be performed by the company.
Positioning
The company will place itself in the category of ‘high quality, low price’ within the
positioning graph, as it will try to provide the best quality of services within a minimum amount.
This will help the company in seeking large amount of customers, as they would be interested in
seeking the services at a lower amount. This will also help the company in securing its position
in the market and gain a competitive advantage as well over the rival firms that are present in the
market.

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Differentiation
The services that will be provided to the customers will be at a lower cost than the ones
that are being given by the companies already existing in the market. Apart from these services,
the employees will also be providing better plans to the customers by allowing them to enjoy the
other services as well at a lower cost (Jeston and Nelis 2014). The tie up with the banks will help
the company in providing the customers necessary information regarding the banks that they are
seeking so that the banks can also benefit from the customers.
PEST Analysis
Political
- Stable government
- Relation with major powers
- Government policy
- Terrorism
Economic
- Spending globally on IT
- Spending domestically on IT
- Fluctuation rate of currency
- Attrition
- Cost of labor
Social
- Spoken language
- Education
- Age of working
Technological
- Telephony
- Internet
- New technologies
(Source: Created by Author)
Political
The political system that is present in India is very stable and is one of the largest
democratic nations of the world and the elections are held at a gap of five years. All the parties
that are present in the country are firm believers of democracy. The Indian government maintains

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strong relationship with the major powers of the world, which helps them in being included in
the process of tendering. The government has taken a decision in awarding more number of IT
projects that are being taken up by them so that it can help in the creation of employment.
Terrorism is another factor that needs to be controlled, which is causing problems for most of the
Indian states. This has even lead to the fallout between many international companies.
Economic
The financial crisis on a recent manner is due to the level of recession that is cutting
down the spending capacity of the IT firms, which is meant for the growth of the industry. The
domestic market has grown by 20 percent and has maintained this same rate of growth due to the
interference of the governmental agencies due to the process of digitization (Lin 2014). There is
an increasing rate of fluctuation in the local currency that is rupee with respect to dollars and
pounds, which has led to the decrease in the level of profits as well. The layoffs and cutting of
jobs have increased, which has led to the low rate of attrition.
Social
The Indian employees are comfortable in speaking in English Language and will try to
increase the rate of profit, as they are well-versed in the language. Most of the technical institutes
and universities that are present in the country helps in providing education related to
information technology (Cusumano, Kahl and Suarez 2015). The working age of the employees
also affect the industry, as they have varied lifestyles, attitudes and levels of satisfaction.
Technological
The Indian subcontinent has one of the lowest call rates in telephones in the world and it
has a base of subscribers that crosses more than 500 million. The telephone network is the

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second largest after China in the world (Wang et al. 2017). The use of internet has risen to 19
percent over the past years and is expected to reach more in the coming years as well. This will
help the company in benefitting as most of the employees will be well-versed with the use of the
internet. The new technologies are being adopted in the Indian system, which has helped the
companies in cutting their costs for more number of years. Technologies like cloud computing,
software that will help in business analytics and other platforms related to social media has
helped the system in developing new methods so that the process can be easy for the employees
(Deane et al. 2015).
Part 3
Financial Analysis
The function of BPO can be related with the outsourcing function. The main theme of
BPO is to make a contract between the parties for manufacturing or performing a particular
service. Therefore, all the financial aspects should be discussed thoroughly. However, it is very
difficult to evaluate the specific estimation or specific fees that are to be levied on every
customer. Financial planning and analysis is an essential part of the integration system. A BPO is
providing various services to the customer and the value prices are depending on each service.
Further, costs analysis is necessary to provide facilities, give power costs, property taxes and
other essentials (Kahveci et al. 2016). However, this company is new in market and therefore,
the authority should lower the rates to attract the customers.
A BPO has to deal with various kinds of clients and therefore, it is required to provide
different mediums of payment options such as payment via check, online payment and payment
by transferring the money through bank.

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A budget should have to be prepared to standardize the process of business and to
understand the start up expenditure. Following things should be included in the budget:
 License, permits and legal services;
 Maintenance of the software of the BPO;
 Insurance policy;
 Salaries of the staffs;
 Renovation of the centre;
 Marketing promotion expenses;
 Payment of the utility bills;
 Buying office vehicles;
 Website launching;
 Miscellaneous.
The financial policies should be adopted to facilitate the process of cost estimation and
the objective of the same should not only to thrive but to make excel as well. Financial policy
will help to standardize the base of the structure and get loyalty from the customers. The running
process of the business is depending on the financial structure and therefore, proper analysis over
the financial sectors is required.
Cost Estimations
Particulars
Amount(GBP
)
Amount(GBP
)
Sources of income
Financial help from banks 150,000.00
Financial help from government 60,000.00
Total income 210,000

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Sources of expenditures
Office rent 6,000.00
Taxes 1,500.00
Human resource 20,000.00
Advertisement cost 10,000.00
Electricity 5,000.00
Administration charges 4,000.00
Equipments 30,000.00
Maintenance 5,000.00
Communication charges 50,000.00
Miscellaneous charges 3,500.00
Vehicles 15,000.00
Total expenditure 150,000
Surplus budget 60,000
Table 1: Budget of Manchel Telecom
Source: Author
Cost estimation of start-up expenses
Start-up expenses Amount (GBP)
Legal requirements 2,000
Brochures 6,000
Consultants 20,000
Insurance 500
Rent 700
Renovation cost 1,800
Equipment charges 4,000
Salaries 50,000

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Others 6,000
Total start-up expense 91,000
Required assets
Cash balance on starting date 500,000
Other short-term assets 7000
Total short term assets 507,000
Long-term assets 0
Total assets 507,000
Total requirements 598,000
Table 2: start-up expense of Manchel Telecom
Source: (As Created by the Author)
Part 4
Value Propositions Statements
The term value proposition consists of certain statements, which are used to analyze the
potentiality of customers and point out the reason for use the service of the company. The main
objective of this term is to find out the particulars so that the service of the company can be
utilized with highest priority and to resolve any dispute quickly (Osterwalder et al. 2014). To
sum up, it can be stated that the value proposition is a statement promised by the company to the