UTStarcom in China
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Case Details:
Case Code : BSTR184
Case Length : 15 Pages
Period : 2001-2005
Organization : UTStarcom
Pub Date : 2005
Teaching Note :Not Available
Countries : China
Industry : Telecom Equipment
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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EXCERPTS
Capturing the Chinese Market
In 1988, it was estimated that China had 4.7 million fixed line phone subscribers and 10,000 mobile subscribers. The teledensity in China was just 1.5 percent. The Chinese Ministry of Information Industry (MII) realized the importance of telecommunication in the economic development of the country and prepared a plan to develop China's telecommunication infrastructure.
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MII targeted installation of more than 110 million lines by the year 2000 so as to improve the teledensity to 10% in rural areas and 40% in urban areas. MII also planned to have over 35 million mobile subscribers in China by 2000. The rapid expansion of China's telecom infrastructure increased the demand for telecom equipment, most of which was imported. The telecom boom in China was of great interest to major telecommunication equipment manufacturers around the world. Many entered the Chinese markets through joint ventures (JVs) with Chinese companies. Siemens' JV, called Beijing International Switching Equipment Company (BISC), was one such venture...
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Managing Growth
UTStarcom's revenues grew from $10 million to almost $2 billion over an eight year period. This explosive growth in revenues could be attributed to the company's focus on exploiting market opportunities through a single product (PAS) in a single market (China).
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PAS accounted for about 75% of the company's total revenues. Further, mainland China contributed 80% of the company's total revenues. The single product, single market strategy was critical to UTStarcom's success. It led the company to concentrate its resources, both financial and human, on the targeted market segment and exploit the opportunities to the fullest extent. The strategy also prevented UTStarcom from pursuing wrong strategies that could have hindered its growth. UTStarcom's
strategy also enabled it to effectively manage its growth. The company
focused solely on those activities that satisfied the need for limited
mobility to fixed-line subscribers... |
Excerpts Contd... >>
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