Macroeconomic is on industrialization. With the recent gas

Macroeconomic factors

Social political:
Tanzania’s contemporary culture, piece, and political stability makes it an
ideal place in which MultiChoice Tanzania introduces a broad range of premium
products, international and African programming through DStv, whilst catering
for all income levels through its range of DStv banquets tailored to suite
different income earners.

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While
Multichoice Tanzania offer the best technology, content and service sets the
company apart from its competition. It also has strong relationships with its
customers. All these have helped MultiChoice Tanzania to achieve the
exceptional growth levels over the past twenty years which it still enjoy currently.
The company has established MultiChoice Resource Centres (MRCs) in twenty
schools in the country as a social responsibility initiative. The MRCs have
been rolled out in partnership with the Ministry of Education. The MRCs play an
important role in providing access to information to schools, in particular
rural schools, thereby helping to bridge the digital divide between schools
with access to information and those without. The company is proud that today
Tanzanians have access to the same world-class technology and sophisticated
content that their contemporaries in Europe and the Americas enjoy.

GDP: The Tanzanian economy
has been growing at 7% for the last two decade. Same pace is expected in the coming
years. Key economic sectors being construction, communication, finance and
transportation (Source: IMF) and current emphasis is on industrialization. With
the recent gas exploration and invention in the southern Tanzania it is
expected to see improved infrastructures and enhanced the company’s operating
environment.

 

Inflation:
Average inflation is around 5% – 6%. This will hold provided the price of
commodities especially remain low.(Source: IMF) Inflation has been detrimental
to many corporates as it erodes purchasing power of  consumers.

 

Foreign Exchange:
Expected to be stable with depreciation of not more than 1.5% estimated in the
next 18 month.(Source: IMF) Given volatility of local currency, movement in
exchange rate has been unfavorable to corporates including MultiChoice Tanzania
as it reduces profitability through loss on foreign exchange,

Michael Porter’s Industry Analysis Technique

Michael
Porter’s Industry Analysis Technique use the Industry analysis technique to
understand the five forces acting on an organization from within its industry
to determine how the organization may be re-engineered to gain a competitive
advantage. The technique
examines the five competitive forces that determine industry profitability:

·        
The entry of new
competitors-address the potential for new entrants into their industry,

·        
The threat of
substitutes- address the
potential for new entrants into their industry,

·        
The bargaining power of
buyers- be cautious of products from other industries that perform the same
functions as their products,

·        
The bargaining power of
suppliers-compete with their customers’ ability to force down their prices,

·        
The rivalry among the
existing competitors- resist
their suppliers’ efforts to drive up the cost of their supplies

SWOT analysis

Strengths

Market share:
MultiChoice Tanzania is leading on revenue market share* holding 37% of the
total share followed by Azam (34%), Startimes (27%) and Zuku (2%). It is the
third on subscriber market share holding 12% of the market.

Competition analysis

MultiChoice
Tanzania face competition in the market of Star Times, Azam, Zuku and others
like cable operators. The strength of the competition is low pricing, cheap
technology such as DTT, Local premium league, local content while MultiChoice
Tanzania has decided to differentiate its products by offering rich, high
quality and current content at affordable prices, high quality technology(DTH)
and high quality decoders. For this matter MultiChoice is perceived as expensive. Since a company has to choose between being
a price leader or differentiate its
product MultiChoice has chosen
the latter and is addressing the completion as detailed below:

Contents:
Local content will gradually continue to be the drivers of numbers specifically
on the bottom of the segment.

Subscribers:
Subscriber profile for growth will be middle and low income.

Sales and Distribution:
Channels need to be streamlined and expanded to cater for mass market.

Costs: Continuous cost
management to improve profitability.

Retention of subscribers: Retain
our Premium, and Compact plus subscribers.

Win – Over and new acquisitions: Win
over Azam subscribers to its Bomba, and Family bouquet, which are cheaper
through aggressive promotion

Response to new entrants and existing competition:
Kwese expected to be in Tanzania in January 2017 with focus on low pricing,
streaming technology, and Basketball. To respond to this the company will promotion of its DStv now product
to disrupt Kwese, and see possibility of open up DStv now up to Bomba. Azam
will continue to drive news and local sports as its crown jewel contents. MultiChoice
will capitalize in new local content on Maisha Magic Bongo (MMB). As piracy
will continue to be rampant, MultiChoice will continue aggressive
anti – piracy campaign, involving the regulators-COSOTA.

Conclusion

The
company is committed to hold onto its revenue market share, and grow its active
subscriber base to attain number two position on subscriber market share in the
forthcoming financial year. The  plan is
to achieve this by effective retention of the top tier subscribers(Premium,
Compact+), and aggressively growing middle and lower tier subscribers(Compact,
Bomba) through its value strategy II proposition which entails package price
reduction and thus presenting affordability, more content and quality to these
segments.

On
the lower end subscriber segment new local content presented by Maisha Magic
Bongo, La Liga and SS4 availability to its Bomba (Access) bouquet will be the
game changer on acquisition and winning subscribers from competitors. This
value proposition to its customers combined with effective promotion,
streamlined sales and distribution, together with renewed anti – piracy drive
will make its growth ambitions a reality in the next three years

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