MBA # 2 Advanced Strategic Management Assignment 2

Group 432JGB02 26 April 2004  


Executive Summary

“We believe our product portfolio, our customer base, our people, and our continued investment and focus on network resource management, service provisioning and activation position us well to provide end to end service fulfillment capabilities to both leading and emerging communications service providers around the world.“ This mission statement is all encompassing and succinctly relays MetaSolv’s raison d´etre.

MetaSolv is a leading global provider:

  • Of operations support systems (OSS) software solutions that help communications service providers manage their business better;
  • The environment for marketing OSS software solutions to communications service providers remains challenging;
  • MetaSolv’s acquisitions of new products, customers, personnel, and sales territories have been key factors that resulted in significant increases in market share;
  • In the fast-cycle industry that it operates in, its performance has been extremely strong;  
  • Its acquisitions, mergers and joint ventures have built it into a powerful force;
  • MetaSolv’s successful expansion into international markets further reinforces their effectiveness in their chosen environment.

There are many ways to evaluate whether a business strategy has been successful or not. Most of them cover four areas namely; Financial, Customer, Internal and Learning and Growth. 

Financials

All of MetaSolv’s revenues come from; the sale of software licenses related professional and services software support. Financial ratios are used to do a financial health check of the company, in conjunction with other techniques for analyzing business performance. The limitation experienced in this analysis is that industry comparisons are not available, and efforts to locate the financial data for the years ended 31 December 2002 and 2003 were unsuccessful.

The results of the financial years ended 31 December 1998 to 2001 tabulated below, gives a good indication of the direction of MetaSolv.

MetaSolv has continued to enjoy a steady growth in gross profit over the past 4 years. The net profit percentages reflect considerably high (although it is remarkable to note that research and development costs as well as marketing and sales constitute the bulk of operating expenses).

The return on equity (ROE) ratios indicate that the company is not yet sufficiently profitable for its shareholders, hence no dividends have been declared for the past four years.

Customer

MetaSolv’s customer growth from 5 to 150 indicates that their products are well embraced by new customers. This is evidenced by several testimonials available on their website, , where customers praise their software for bringing costs under control, the excellent service offered, and for being the only available system in the market that supports the entire network. With MetaSolv, communications providers can reduce costs through more efficient management of network resources and rapid deployment of next-generation applications and services as business needs change. MetaSolv’s customers successfully use its products to: 

  • Introduce new services more easily;
  • Reduce service delivery times;
  • Reduce operating expenses.

Internal

The quality of the workforce is of the highest calibre which is reflected in the numerous awards that MetaSolv has received – for e.g., the InfoVision Award 2000. CEO James Janicki was recognized for his leadership at MetaSolv through the 2000 Ernst & Young Technology Entrepreneur of the Year award, which honours entrepreneurs whose hard work and perseverance, has created and sustained successful and growing businesses.

Learning and Growth

MetaSolv believes that their growth and success is attributable largely to their high-calibre employees and an experienced management team, many of whom have years of industry experience in building, implementing, marketing and selling software applications critical to business operations. MetaSolv maintains a strong corporate culture and reinforces this by requiring employees to attend an extensive orientation program to learn about their technology, the industry they serve and the company’s values.  

MetaSolv’s focus on the OSS niche market combined with its superior products has made it extremely effective in the environment in which they operate. Their globalisation strategy has opened up new markets in which to expand. They do, however, need to be cautious about competitors, especially one of the global telecoms giants, moving into their niche market. They need to continue spending money on R&D in this fast moving industry if they wish to maintain their lead. A diversification out of their niche market might need to be considered in the future.


Table of Contents

1.        Introduction        

2.        Strategic Management Inputs        

2.1        External Environment        

2.1.1        Segments of the General Environment        

2.1.2        Industry Environment Analysis        

2.2        Internal Environment        

2.2.1        Resources, Capabilities, Core Competencies and Competitive Advantages        

2.2.2        Value Chain Analysis        

3.        Strategy Formulation        17

3.1        Business Level Strategy        17

3.2        Competitive Rivalry and Competitive Dynamics        18

3.3        Corporate-Level Strategy        19

3.4        Acquisition and Restructuring        20

3.5        International Strategy        21

3.6        Cooperative Strategy        23

4.        Strategy Implementation        24

4.1        Corporate Governance        24

4.2        Structure and Control        24

4.3        Strategic Leadership        24

4.4        Strategic Entrepreneurship        26

5.        Conclusion        27

Bibliography        29


  1. Introduction

Founded in 1992, MetaSolv started with 5 customers and has grown to over 150 customers worldwide. With deregulation of the Telecommunications industry in 1996, MetaSolv was in a position to increase its revenue and apply growth and expansion strategies to enter the international market. In order to go global, MetaSolv needed extensive funds and chose to move from a privately owned company to a publicly held entity in November 1999.  This move generated the necessary funding required to aggressively concentrate on growth through product development, market penetration and global expansion. Since then MetaSolv has moved from the one core MetaSolv Solution™ product to having a comprehensive range of enhanced products. Its customer support services enable them to deal effectively and efficiently with their customers thereby improving relationships throughout the supply chain.

MetaSolv expects an increasing demand, on a worldwide scale, for its products and services. MetaSolv has continued to invest significantly in research and development, particularly in the areas of network resource management and service activation capabilities, in order to meet the customer requirements and be well positioned for future growth.

To achieve its objectives, the company will leverage its core strengths, which include: 

  • A strong, diverse customer base of more than 150 leading global service providers;   
  • A comprehensive service fulfillment product portfolio that serves both traditional voice service providers, and those focused on delivering next-generation IP and mobility services;   
  • Established strategic partnerships that position MetaSolv for opportunities to work with leading service providers around the globe.

Analysis Limitations

  • We have applied many techniques, to the best extent possible, using the information that is available (case study and research);
  • Industry comparatives are difficult as there are few competitors that are similar,  but none of whom are focused on the niche OSS market;
  • Financials are limited to the data available and kept within the period of the case study.

Techniques and Models used in analysing the case study:

  • BCG Growth / Share Portfolio Matrix;
  • Industry Analysis;
  • Strategic Group Analysis;
  • SWOT Analysis;
  • Value Chain / Value Network Analysis;
  • Competitor Analysis;
  • Functional Capability and Resource Analysis;
  • Management Profiling;
  • Macro environmental (STEEP) Analysis;
  • Experience Curve Analysis;
  • Patent Analysis;
  • Growth Vector Analysis;
  • Product Life Cycle Analysis;
  • S-Curve (Technology Life Cycle) Analysis;
  • Financial Analysis.
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  1. Strategic Management Inputs
  1. External Environment

The telecommunications industry is changing dramatically and has become increasingly competitive as a result of deregulation, convergence of services and capabilities, new technologies and global industry consolidation.  The OSS industry is worth over $23 billion.  This makes it a very lucrative industry in which to operate. MetaSolv is fortunate in that there are very few rivals capable of offering the complete OSS solution that it does. The deregulation of the telecommunications industry in America and worldwide opened the door to many opportunities. The US Telecommunications Act of 1996 changed the ...

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