Man 4720

Case Analysis-Matav

1. What is Matav’s Strategy? Has it been successful?
Matav restructured into four business area which is business services, residential services, Internet and mobile. The mid-term strategic plan of Matav has expanded in the Hungary and in regional penetration organic. Business units operate separate management teams, which are allowing each unit to focus on their areas of enterprise. They develop mobile services to attract customers in order to pick their product over competitors. Also, Matav was keen to expand through the Balkan region and southeastern regions of Europe such as Bulgaria, Romania, Serbia, due to its well performance in getting the controlling interest of MakTel. Their second target is Montenegro Telecom because Montenegro is very small and it is only fixed line operator. Yes, Matav has been successful. Matav has registered a gradual growth after the implementation of this strategy. They changed to a customer-oriented company, which offered all telecom service to both individuals and corporations? As the monopoly telecom company in Hungary, Matav had a very high percent market penetration. Also, regional expansion in Mack Tel received huge revenue and became the biggest employer in Macedonia. Performance measures showed Matav in the Internet area that the number of subscribers growth of over 40 percent in 2 years.
2. Does Matav have any competitive advantages in its domestic markets?
No. I think domestic competitors were the reason Matav lowered their price. They did not offer any packages or services to get customers eyes on them. After T-Mobile offer services with lower prices, Matav were forced to decrease the prices. They could have done that before T-Mobile enter the market. In all the services that Matav can offer, they have not done anything for competitive goals, like in internet services and in mobile services. They once offer tariff packages and they saw the results. It turned out good.

3. Do Matav’s international expansion plans make sense? Yes, because Matav was not doing well internationally and by bidding on MakTel and actually winning it, they expand their international market. Maktel was not doing well in Macedonia. Matav saw a good opportunity in Macedonia. Only 25 per cent of the country had fixed telephone lines, five percent have mobiles and less than one per cent had Internet. That they have good experience in Macedonia, in 2005 they went after Montenegro which is a small country. It can turn out to be a better market.

4. If you were a member of the strategy group, what would you recommend to Andras Balogh?
I would recommend Andras Balogh to put more thought in new technologies. Like look more into Fiber Optics. Fiber Optics may look like a faster but I believe more people in the world will get high speed internet, television network and telephone lines with Fiber Optics. Investing in Fiber Optic will defiantly work out in the long run. If you offer a reasonable price in service then market can be offered in more international countries. Not many countries have Fiber Optics services to offer but it has been done and wroth trying again.