Strategic Analysis of Orange UK

Chapter 1. Orange Mobile Service and its Context
Orange Mobile service contains calling, messaging, information service, mobile entertainment, mobile email, mobile data service, etc.
Key elements in service delivery

Designing the service
Ensuring that: Customer needs are clearly identified
Reasonable expectations are set
Services are easy access, responsive, timely and reliable
Where possible, some choice is provided for users
Those delivering the service have appropriate skills
Implementing the service:
Ensuring that: Service delivery is consistent regardless of where or by whom it is delivered
Services are simple to understand and receive
Services are cost effective
Assessing achievement
Ensuring that: Quality of service is regularly reviewed
Users have easy right of address for poor quality services
There is a programme of continuous improvement
Value of the service to customers
The main value of Orange mobile service to customers is to provide calling and
cost.
Orange provides not only general calling services as other communication companies, but there are also many different styles of calling service for consumers to choose. HD Voice is one of revolutionary technology Orange possesses. There will be a crystal clear HD Voice when customers making phone calls. It is a better, more natural experience, less background noise, taking any strain out of listening, no matter in the street or at the station. Orange also provides conference calling service, which can support talking to up to five people at the same. Definitely, if customers have 3G handsets and in the 3G area, they can also make video calls whenever they want.
There are also several types of messaging service for orange users to choose. Orange can guarantee customers sending or receiving photo messages and video messages as fast as text messages. Customers can also use photo messaging to send pictures to their social networking pages.
As above, orange provides UK customers a convenient and high quality mobile service. And customers can choose either “pay monthly” or “pay as you go” to obtain all the mobile service. No matter using 3G functional benefits or international communications, the price always accounts for a lower level when comparing with the other communication companies in this profession. Therefore, Orange provides a high value mobile service to customers in UK.
Assumptions
A reasonable assumption for Orange to segment customers is quite important.
Customers with different ages, occupations and family status will have different needs and usage of the service. For young people, messaging and mobile data services are their main purpose. For businessman, their main uses are calling services. For overseas students, international calls will be an important part to contact with their family. Some people are mad about music. Some people are sports fans. Some people don’t use mobile phone so much.
Orange classifies customers by their different status and demands. With these segmentations, Orange offers different bundling service packages to meet various requirements. Orange also names the different packages with the animals which are very interesting and attractive.
Monkey: The customers are mad about music. They can get free tunes and texts on Monkey, plus news, competitions which Orange think customer will like, and offers straight to their phone.
Dolphin: The customers love to socialize. They can text, poke or tweet as many times as they like with Dolphin. With their top-up, they can get free text and internet on their phone.
Canary: The customers love to chat. They can talk to friends and family for hours on Canary with free evening and weekend calls to any mobile. They can alternatively share great moments with free texts or free photo messaging every evening and weekend.
Racoon: The customer in a no nonsense talker. Racoon is a simple, low cost plan that’s great for talking and texting. Customer can get lowest call rate of just 12p per minute and send a text for only 12p too.
Camel: The customer often calls abroad. They can stay connected with friends and family in more than 50 countries with free minutes on Camel. Plus, even when they run out of their free minutes, they will still get great rates starting from as low as 5p.
As above, the five packages will be suitable for most of the customers. Orange also has a lot of other bundling services which satisfied all their customers.
Service from a customer’s viewpoint
From a customer’s viewpoint, Orange not only offers great services on calling and messaging, but also stands in consumer’s angle to furnish many humanized services.
The most popular one may be the Magic Number. Magic Number is based on an old-fashioned chat but is a new way to “help you stay in touch with those who matter to you most.” There is another intimate design in all of callings which received a widespread praise — Network Performance Promise. Orange is the only network to give customers up to a minute of talk time back, in the unlikely event that you’re cut off during a call. It means if the calling between A and B is cut by some reason, and A calls B again within five minutes, Orange will credit 1 minute to A’s account to cover A’s loss just now. Call Barring is also a useful service to users. Customers could block either incoming or outgoing calls whenever they like, and Orange won’t charge for this. Orange Chat and Orange Messenger enable the consumers to enjoy immediate chatting fun as well as BlackBerry mobile service.
In the Insurance and protection aspect, Orange Care has exempted customers’ worrying about lost, stolen, damaged or develops a fault on their phones.
Orange also provides a useful service named Payforit, which is the trusted payment service developed by Orange and the other networks, and operated and provided by approved payment service providers known as Accredited Payment Intermediaries. Payforit is the easy way to buy goods and services using customer’s mobile phone and charge the amount directly to bill or pre-pay credit. Other services that make consumers to relish are Orange Wednesday, Reserve Tank and Tiny Top Up, ect. Orange customers could buy 2 for 1 cinema tickets and 2 for 1 pizza on Wednesdays.
And if someone runs out of his/her credit on the phone and does not have means to top up, he/she could text and call Orange customer service to apply for extra 2.50 pounds to continue the important business. Therefore, in the customer’s viewpoint, Orange provide a series of humanized services to convenience and perfect the whole mobile experience in customer’s daily using.
Skills and knowledge a customer need
To gain maximum value from the service, customer needs to be familiar with Orange services, know exactly what the service include and choose a most suitable service which is Consistent with their usage. As mentioned, Orange has many kinds of service package for different types of customers. Customers can go to the Orange shop and talk to the salespeople about the service they want. A personalized service will be more emotional and acceptable to customer. Customer can also call to the customer service or visit Orange website to find any latest new service and changes. Subscribing to Orange E-mail tips about their news will be an efficient way.
Nature of competition in the market
Currently market competition in the communications industry is already very fierce. The core of competition is no longer a contest of mobile communication technology or price, the customer service is the aspect both mobile service companies and consumers most focused on. Nowadays, 3G technology is widespread, and 4G technology is under developing, so there is nearly no technical differences between major communications companies such as O2, Vodafone, Orange, T-Mobile and 3. However, the relatively fixed market structure makes these companies have no much choice space and leeway in the pricing because the cost is little different. Hence, the customer service of a company becomes the most valued quality in consumer’s view. The number of retail stores and the attitude and steps of telephone customer service determine the quality of service of this company. Mobile service companies should divert the competitive focus to the bottom level, which means making more investment in the expansion of retail stores, enhanced the function and convenience of telephone services, employee training and so on. By improving these services motioned above to enhance competitiveness. And at the same time, improve customer satisfaction, thereby improve Customer Loyalty.
Terminals and end-user devices
Handsets are terminals and end-user devices for Orange mobile service. In Orange shops, the display of different kinds of mobile phones and to have a tryout free of charge gives customers an intuitive image about the services. Queries, orders and complaints handling can also be dealing with in Orange shops. It makes customer understanding the service better
Chapter 2. The Service Supply Chain
As a mature telecommunication company, Orange UK has a complete supply chain in delivering service, which is in order to provide better and more comprehensive mobile services to customers. Therein, Orange cooperates with Cisco and HUAWEI to set up infrastructures, and shares 2G Network with T-mobile to expand the signal coverage, and also cooperates with some handset manufacture, banks, post office, cinema and other companies to Improve and expand the business scope. Orange constructs and operates Retail stores, Telephone customer service and website to provide customers more various and more convenient service.
Structure of Orange UK mobile service supply chain
As the supply chain show above, Orange cooperates with infrastructure suppliers, such as Cisco and HUAWEI, to construct base stations and lay basic cables. Orange bought large switches and some other core devices from these companies and signed the agreement on the daily operations of the maintenance. In addition, this part cooperation in the supply chain is one of the most basic and important parts which could not be elided in further alternative structures.
On October 2010, the merger of Orange and T-Mobile is formal implemented. 30
million customers’ phone will phones would automatically switch to whichever of the two networks has the strongest signal mid-call. And the underlying system is similar to that used when a phone “roams” on a different network abroad. The first practical benefit from this cooperation is the advantage of network coverage. Though the cooperation at this stage is limited to 2G network, it has been praised by experts and consumers. In addition, this part is one of the alternative structures in the Orange mobile service supply chain.
Orange has a long cooperation with many handset manufacturers to provide Orange customers a variety of mobile phones to be paid monthly or “pay as you go”. There are Blackberry, HTC, Nokia, Motorola, LG, Sony Ericsson and some other brand mobile phones for customers to choose. Customer could get the phone he/she liked for free and enjoy bundling package calling discount if sign a contract to pay monthly. Customer could also choose “pay as you go” to get phones in a lower price than the market price. The most popular pay monthly plan is iPhone, with which customer can enjoy iPhone applications, music and games by installment payment, greatest experience with low price. As for the SIM only plans, in addition to the variety of different specified packages designed for different groups (introduced in Chapter 1), Orange also provides Orange Business for small and medium companies or groups. On the basis of the general package plans, Orange Business adds free calls and texts between sharers within the group, which is convenience and cheap for business. In addition, various plans are the main service and steady income of Orange, so it could not be elided in further alternative structures.
Orange also has other cooperation projects with some companies in other area to get win-win and offer users more services. For example, on Wednesdays, customers can enjoy 2 for 1 in cinemas and Pizza Express; customers can pay by their SIM card account by Payforit; Orange also cooperates with BT Landline to provide home broadband service, ect. In addition, these extra services are alternative structures in the Orange mobile service supply chain.
As discussed in the Chapter 1, another important competition factor in the communications industry is customer service. Orange constructs and operates over 300 retail stores in UK and 24 hours telephone customer service system. Retail stores are around the streets in major cities with complete sales system, plenty of mobile phones and other goods and well-trained employees, which can reach customer’s requirement. Services in retail stores are mainly focus on sales, and follow-up services almost rely on the telephone customer service system. Complete automated voice service system can help users solve problems themselves 24 hours. Plenitudinous and well-trained employees ensure the manual telephone service can satisfy customers quickly and accurately. In addition, customer service is too important for a telecommunication company to be elided in the supply chain.
Orange also constructs and operates the Orange website to rich the content and ways to service. Customers not only can find all information about Orange, but also can discover many useful functions on Orange website. On the homepage, there are lasted news all over the world, sport matches report, weather information and so on. The mobile entertainment page provide music download and various handset games which come from the cooperation between Orange and some music companies, pc game companies. There is also available for topping up online or ordering new SIM cards through the website. The last but not least, customers can manage their account online including check electronic bills. In addition, Orange website service could be seen as an alternative structure in the supply chain.
Shared Resource
There are still another two parts of important cooperation in delivering the mobile service, whose controller are banks and post office. Orange sign a contract with a customer must be through a bank to charge the customer monthly. And if someone uses the online top up service it is still related to the cooperation between banks and Orange. But in the telecommunication market, other companies use the same way to charge users, so banks service on mobile phone is shared by financial markets, savings business, lending business, other mobile service companies (such as O2, Vodafone, T-Mobile and 3) and so on. Orange will send paper bill every month to each contract customer by post. And if someone orders a new SIM card online or lost the handset under the insurance, orange also will deliver the package by post. As for the case of sharing resources, post office is roughly same as the Banks, which is share by postal services and also other mobile service companies. It is clearly to find out that banks and post offices are in operation or under the control of national macroeconomic regulation by the government, both banks and post office have strong business management and processing capabilities, and also the Orange only takes a little bit of these sharing resources, so there won’t be any influence on the Orange mobile service by sharing resources on bank and post office business.
Software architecture and cloud-based configuration
Figure1 [1]
Cloud-based configuration would be appropriate as Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.[2] Cloud computing provides computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that delivers the services. Parallels to this concept can be drawn with the electricity grid, where end-users consume power without needing to understand the component devices or infrastructure required to provide the service.[3] Cloud computing describes a new supplement, consumption, and delivery model for IT services based on Internet protocols, and it typically involves provisioning of dynamically scalable and often virtualized resources[4][5]
Cloud-based Configuration has many advantages. First, cloud-based configuration provides the most reliable and secure data storage center, users do not have to worry about data loss, virus attack and other problems. econdly, the cloud-based configuration requires quite low on the client devices and is most convenient to use. n addition, it is easy to share data and applications between different devices. Finally, cloud-based configuration can reduce operating costs and maximize the commercial interests. As above, Cloud-based configuration would be an appropriate architecture of this service.
Chapter 3. Governance Structures
Quality of service
Quality of service in the field of telephony is formed by 6 primary components: Support, Operability, Accessibility, Retainability, Integrity and Security.[6] Bit rate, bit error rate, jitter, delay and packet dropping probability should meet the required standard. Voice call quality directly reflects the quality of service. Stable signal should be guaranteed to customers.
A communications network forms the backbone of any successful organization. These networks transport a multitude of applications and data, including high-quality video and delay-sensitive data such as real-time voice. The bandwidth-intensive applications stretch network capabilities and resources, but also complement, add value, and enhance every business process. Networks must provide secure, predictable, measurable, and sometimes guaranteed services. Achieving the required Quality of Service (QoS) by managing the delay, delay variation (jitter), bandwidth, and packet loss parameters on a network becomes the secret to a successful end-to-end business solution. Thus, QoS is the set of techniques to manage network resources. [7]
Responsible for ensuring the service
The QoS is ensured by the Infrastructure. More base stations can provide a better network. Now Orange shared their 2G network with T-mobile. It means Orange customer can use T-mobile network and better to be connected. Central switch(Cisco, HUAWEI) with fast speed and powerful processing capability can also improve the QoS by reducing the packet dropping probability. Orange customer service accesses their network quality by being contacted to the customers directly and getting the feedback. Then Orange R&D department solve the problems which are collected by customer service, upgrade the network system and develop new ways to access to the network better. Therefore the quality of service are ensured to meet the standards.
SLAs between suppliers for offering this service
A Service-Based SLA is needed for offering this service. Service-Based SLA is an agreement for customer to use the service which is delivered by suppliers. It is consist of a definition of services, the levels of availability, warranties, problem management, billing, performance measurement, disaster recovery, customer duties and termination of agreement.[8] Penalties may be agreed upon in the case of non-compliance of the SLA. It is important to note that the “agreement” relates to the services the customer receives, and not how the service provider delivers that service.
Types of variability
The basic type of variability is contractual agreement to be changed or terminated. The contract which has been signed between customer and provider would be terminated in certain circumstances. For example, the poor performance of the network and customer service will dissatisfy customers. In this case, Customer has the right to terminated the contract and change to another supplier. Once customer find their usage is always outside of contact allowance, or customer’s status has been changed and need a more suitable bundling package service, they will also want to terminate the current contract and change to a more adaptive contract.
To manage the above variability, Orange needs to make a precision performance measurement and keeps improving their network. A patient and efficient customer service will give customer a good impression and increase the customer loyalty. New contract and bundling package service which is advance in time can attract both current customers and potential users.
Alternative ways to define/measure quality of service
In a telephony system, quality of service can be divided into two parts, “human” and “technical”. Human factors include: stability of service, availability of service, delays, user information. Technical factors include: reliability, scalability, effectiveness, maintainability, Grade of Service, etc.[9]
QoS is not only referring to the ability to reserve resources, but also referring to the level of quality of service, for example, guaranteed service quality.
An alternative definition of quality of service is requirements on a metric that reflects or predicts the subjectively experienced quality. In this context, QoS is the acceptable cumulative effect on subscriber satisfaction of all imperfections affecting the service.[10]
Dealt with problems
In this case, customer service becomes a great section to do deal with problems. The attitude of the customer service will be a decisive factor. A patient and friendly customer service will be helpful in contacting with customers. Most of customers get confused in automation services during the endless pressing the number keys to find the solution of their problems or to access to the manual service. Establishing an easy way to access to the manual service and reducing the fare rate will be considerate. Submitting the problem via official website or by email is also convenient for customer.
Processes/systems for dealing with faults
A quick reaction system should be established based on an internal platform. Once a fault has been informed to the customer service, it should be immediately classified to the defined types and passed to the maintenance department. Then the maintenance department can solve the faults according to the priority which is determined by the types of problems. Once the faults has been solved, the details of the faults and the methods used should be recorded in data-base. If the same fault occurs next time, it takes no time to find a solution, instead, just need to check the faults data-base and find the prior method to deal with it. As above, this system provides a quite efficient way to dealing with faults.
Chapter 4. Service Management Systems
The service management system can be split into four sections, order taking, provision of service to customer, billing, fault management.
Order taking
Orange customers can order their there service directly from the retail store or over the website. A mature order taking system should have the ability to respond to customers’ requests quickly.
The order taking system can show the storage of each retail store. It is a real-time monitor. In some case, once a retail store is out of stock, the nearby store can support it immediately. The system can also make a prediction based on the past sales status and then provide a reasonable sales strategy. Order taking trough Orange website needs to deliver the service in a limit time which is also controlled by the system.
The system has an efficient mail order service and attracts and keeps customers. It can also increase accuracy of order details, miss no more sales orders and enhance security. The ultimate aim of the system is to ensure services are accessible to customers.
Provision of service to a customer
A system is established to support and manage the service provision. Orange customer can contact the call centre, and then call centre will record the request and distribute it to the related department. For store management and work-force management, they offer technician support. For network management, it provides the maintenance and test service and network capacity assignment. The aim of the system is to ensure service in a high quality.
Billing
Orange provides both paper and electronic bills. It clearly shows the usage of the service and helps customer manager their uses. Billing systems is used to collect information about telephone calls and other services that are going to be billed to the subscriber. It can be divided into two parts, call detail record system and call accounting system.[11]
Call detail record system is the computer record produced by a telephone exchange containing details of a phone call that passed through it. It can be used for supporting the operations by providing information on faulty calls, and measures of the amount of traffic taken along particular routes.[12]
Call accounting system captures, records, and costs telephone usage events. Call accounting systems can detect outbound and inbound calls, call ring outs, call routings, abandoned calls, and other activities.[13]
Orange provides both paper and electronic bills. It clearly shows the usage of the service and helps customer manager their uses.
Fault management
Fault management system can detect, isolate, and correct malfunctions in Orange network. It can examine and maintain errors. Once a fault appears, the system will send a notification to the network operator. Then it will carry out a series of automatic test to correct the faults. A mature system can automatically correct potential problem-causing conditions and resolve actual malfunctions. Details about the system see above 3.7.
Orange has cooperation with other companies which interact with the service management system. For fault management system, if the core switch is broken, it needs experts from the manufacturer to deal with it. A contract about a series of after-sales service is needed.
Chapter 5. Risks involved in launching Orange UK mobile service
In the past three decades, mobile communication industry has completed development, progress and popularization. The advances in technology, the increase in consumer demand and the exacerbated competition among communications companies made it difficult to estimate the risk about this industry. Not only because it has high requirements for technology updates, but also due to the large customer group leads to the required standards of service quality is inconsistent.
Risks during Orange UK design stage prior to its launch
Orange UK was founded in 1994. [15] Before that, there were lots of difficulties and risks during the service definition and design stage prior to Orange’s launch. At that time, communications market was underdeveloped, and the market was mainly occupied by landline telephones. The citizen preferred to use public telephones than bought expensive mobile phones themselves. As a beginner, the first risk of Orange was the huge investment on developing Infrastructure, constructing retail stores and telephone customer service, cooperation with other companies to provide service and advertisement. The payback period and the profit were both unsure. Second, the popularization rate of mobile phone was decided by the price of handsets and monthly fee to use, which were big challenges to citizen. Third, O2 UK had been founded for 10 years and already had a complete service system and a fixed customer group; [16] One2One (which is T-Mobile UK now) was launched in September 1993 and had already started normal operation; [17] Vodafone is the originator of mobile communication, as early as 1980, began its operation. [18] Hence, as a new company, Orange must faced to the competition and found ways to occupy a certain market share. Finally, there perhaps were unspecified risks in the development.
Orange’s on-going risks and the ways to be ameliorated
Although orange is now under well functioning and has a complete customer service system, there still are two main risks existing. First, the stability of cooperation with the companies in the service supply chain decides whether the whole mobile service could be continued. Second, more and more fierce competition in the communication market nowadays affects Orange’s profits directly. There are several methods to avoid and reduce these risks. First, accelerate the pace of new technology research. Second, expand the cooperation with T-Mobile from sharing 2G network to 3G network or even other technologies. Third, Increase the quality of mobile service to improve customer satisfaction which is order to improve customer loyalty. Finally, make contingency plans to reduce other potential consequences.
Chapter 6. Improvements to the Service
Improve customer service
Contact with customers on a regular frequency. Collect the feedback from customers and see if they are satisfied with the service. Solve the customers complaints quickly and successfully. Offer as many contact methods as possible and make it easy for customer to contact to Orange. Give customers more than they expect. E-mail them online greeting cards on holidays or birthdays. Always be polite to your customers. Build strong relationships with your customers.
Improve quality of service
Update the equipment and system to obtain fast speed and high stability.
Use new technology to have a high quality service
Deal with the fault within a limit time.
Make change to service
Orange should develop new service to customers which is more suitable for different kinds of customers. Some new bundling package can be set to meet customer’s needs.
More cooperation with other companies or organizations
Orange can cooperate with other companies to extend their service. An existing example is the cooperation with MSN, Orange customer can use their account to send instant message on their phone with MSN. In this case, Orange can attract more users and keep their existing customers.
Predict changes
The changes in technology will cause the need for enhancements. Changes from 3G to 4G network is the future of Orange. This new technology will provide customers better service which has more functions and applications.
Orange now has an industrial project, “conquests 2015”, which is involved in four parts, employee pride, networks, customers, international development
The aim is to: Offer its employees a beneficial working environment. Increase coverage and bandwidth for both fixed and mobile networks, in both mature and emerging countries. Offer a superior customer experience compared to other operators. Sales are expected to double over the next five years in emerging markets.[14]
Finally, Orange plans to grow from close to 200 million customers at present to 300 million by 2015 across its entire footprint.
Chapter 7. Reference
[1]http://www.hill2dot0.com/wiki/index.php?title=Image:G2407_GSM-Architecture.jpg
[2]“NIST.gov–Computer Security Division–Computer Security Resource Center”. Csrc.nist.gov.
http://csrc.nist.gov/groups/SNS/cloud-computing/cloud-def-v15.doc.Retrieved 2010-08-2
[3] http://www.wikipedia.org/
[4]“Gartner Says Cloud Computing Will Be As Influential As E-business”. Gartner.com.
http://www.gartner.com/it/page.jsp?id=707508 Retrieved 2010-08-22.
[5] Gruman, Galen (2008-04-07). “What cloud computing really means”. InfoWorld.
http://www.infoworld.com/d/cloud-computing/what-cloud-computing-really-means-031
Retrieved 2009-06-02
[6]Defined in 1994 in the ITU-T Recommendation E.800
[7]http://www.cisco.com/en/US/products/ps6558/products_ios_technology_home.html
[8]An outline of the core elements of an SLA. The Service Level Agreement.
http://www.sla-zone.co.uk/
[9]Peuhkuri M., IP Quality of Service, Helsinki University of Technology, Laboratory of Telecommunications Technology, 1999.
[10]http://en.wikipedia.org/wiki/Quality_of_service
[11]http://en.wikipedia.org/wiki/Billing
[12]http://en.wikipedia.org/wiki/Call_detail_record
[13]http://en.wikipedia.org/wiki/Call_accounting
[14]http://www.orange.com/en_EN/press/press_releases/cp100705en.jsp
[15]http://en.wikipedia.org/wiki/Orange_uk
[16]http://en.wikipedia.org/wiki/O2_uk
[17]http://en.wikipedia.org/wiki/T-mobile_uk
[18]http://en.wikipedia.org/wiki/Vodafone

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