KT CORPORATION CASE STUDY-Service Analytic
Please make sure you answer the questions below and highlight them in the text. They should be under the Analysis section
- Think about KT Corporation’s success and the practices that underpin it. To ensure the continued success of KT Corporation (both in the short-term and the long-term), what do you believe the company should be measuring?
- Be sure to consider both the tangible and intangible. Also, be sure to make it clear in your answer to how measuring each of those variables would benefit the company and support its competitive advantage.
Introduction
K.T. Corporation is a company that was built on the basis and core value of customer satisfaction. Therefore, for many years the company made sure that it had concrete plans such as customer value management. In doing so, the company was able to increase customer satisfaction and comfort. However, the main issue was if the company strategy of maximizing customer value would lead to the company having an advantage in the telecommunication market. The major blow to KT company was when they experienced a decrease of shares in the telecom market to the wireless market.
Moreover, it hurt customer management. In addition to that, the company had been affected by a decrease in sales, which had been experienced since 2013. The existence of saturation in the communication market, KT company’s profit, was not commensurate with the cost and efforts it had expended. The problem was linked to the company focusing more on internal performance indexes, and customer satisfaction research was more superficial and quantitative.
The telecommunication sector existed in a competitive environment. Therefore KT company faced tough competition from companies like S.K. and L.G. U+, who are its fierce competitors. Hence, it was very hard for KT to dominate the market, which had a direct impact on its sales. Moreover, the market in which KT company was operating was monopolistic, hence one company was known for offering certain services to the consumers. That can be seen in the case where KT company’s biggest weakness was the wireless market, where the company faced a decrease in sales, which hurt the company. Even though the company fairly doing well in other sectors of the services and products offered by the company. They were unable to maximize their potential on the wireless market fully.
Arguments
The company is focused on customer value development, but the strategies in place have not given the desired results. That can be linked to the company focusing more on internal performance indexes and customer satisfaction research, hence being considered as more superficial and quantitative. The existence of such failed strategies in KT company was the key cause for the company facing drops in sales and not gaining the estimated or expected profits. According to the KT company case, KT company’s profit was not commensurate with the cost and efforts it had expended.
The only existing solution to the problems that the company is facing is coming up with concrete strategies that will see customers consuming more of their products. Since, as much as the company strategies were not prioritized perfectly, the lack of customers to consume their wireless products was the main cause of fall in sales. KT company establishing quality innovation systems to maximize customer satisfaction by investigating how customers feel about their services and products is essential in restoring the company. Since the customers are the main consumers and trying to get to know their feedback about the services and products being offered by the company will be key in helping the company to notice their strength and weakness.
The other key aspect the company should consider while trying to handle the existing problem in the company is through getting to know the advantages the competitors have over the company. In doing so, the company will be in a better place to know the new aspects that they should incorporate in their products and services, hence giving them a competitive advantage in the telecommunication market.
Analysis
Rule of Five
Uncertainty in a business can affect its productivity. In capital-intensive firms, individual unclear decisions can cost the company a fortune because the decisions are irreversible. K.T. has a customer base that keeps it operational in the long run, although that seems to be changing from the shifts in its revenue and customer base. The rule of five concepts can help K.T. demystify, the uncertainties in the market trends, and aid in decision making, using less data (Hubbard, 2010). The company can use current consumers, potential consumers, and members of the public to get a random five and conduct its analysis on issues regarding the company products and services. It is cheaper and takes less time than sending employees out there to conduct the surveys.
Monte Carlo Experiments
Stammers (2019), businesses can use the Monte Carlo model to come up with new product ideas and financial management on investments made. From one outcome, K.T. can make a comparison from other alternatives and make a final stance. The company should group its products into four fundamental portfolios. The last two are products that do not generate much income and hold investment money. A decision to drop them can provide space for better products and services to take their place, through redesigning. With the model, the company can brainstorm with other key players and experts in customer experience before commencing the process. Moreover, the company should go to crucial products that make profits for t Whether it is rebranding, marketing campaigns or customer focus, the company must be known for something that it does better than the rest.
Bayesian method
In a deterministic system, there is a likelihood of complacency in determining outcomes of statistical analysis. Using the Bayesian method, a company can make future predictions based on past performances. It is a probability model that uses data to make reasonable arguments that can help in understanding market dynamics, future needs, and behavior of customers (Koop, 2005). Customers have preferences and tastes that keep changing, and it is not safe to settle on the current status and deduce a predictable customer behavior in the future. Staying ahead of the game will position K.T. strategically to offer what the customers need at the right time when its competitors will be grappling to stay afloat and adapt to changes.
Measurement dysfunction
One of the great strategies that K.T. has made on its course in customer value development was engaging new employees to run the program. Any decision that is intended to help the company grow must start from the bottom and go to the top in a company setting. Everyone must believe in the process; otherwise, ideas will clash, internal wrangles, and other consequences that will derail the plan and lead to its failure (Wilde, 2016). K.T. should involve all the employees and blend the team that is tasked with customer value development, mixing experience. Fresh ideas will guarantee a well-informed data on the market and customer relations.
Transformative measures
The new CEO opened a new department called CVMD, which was essential in assessing and improving the quality of KT’s products and services. Their main aim was conducting an assessment on the viewpoint of the customer, which was key for the company’s overall growth. Moreover, understanding the viewpoint of the customers was a challenge that was affecting the company, hence the need to handle the problem.
With sales stagnating or declining over the years, the company needs strategic development programs, broken down into long- and short-term goals. Customer value development, Community Social Responsibility (CSR), donations, discounts, and weekly or monthly promotions, are some of the short-term goals. Diversification and redesigning of products and services, hiring external experts to conduct market analysis and recommendations to improve services, products, and customer relations, are long term initiatives the company can consider to pursue. Since the marketing practices are evolving, it is no longer about satisfying the needs of the customers only, but also improving customer experience. Their goal is to make their customer happy by being identified as “a company offering a new and pleasant experience.”
Any change in the organization must start with managing individual behavior, groups and blend them with the culture of the organization. K.T. top management, before venturing on the outside customers, they must ensure employees are well motivated. Employee motivation is essential in making sure that there is good service delivery towards the consumers, who are the main pillar of a business (Wood, 2006). Opening over 1600 customer service centers with employees that do not believe in the course cannot yield good results. Transformative change is vital because it prepares everyone to act as a team to realize the set goals and objectives. The CEO must realize that they need the employees to deliver on their plan. Transformative measures ensure that new ways and ideas are incorporated in the entire company, and everyone speaks the same language about the company’s plan to grow, retain customers, and acquire new customers.
Conclusion
Every organization strives to exist for the longest run, and not succumb to competition. For K.T. to remain relevant, it needs to evolve. It needs to change its strategy to improve customer experience and outgrow their competitor. Moreover, understanding the distribution of its customers and accurate market predictions is a step towards better customer management. The company should have a better strategic plan to improve customer experience or must be confident. In addition, A practical and all-inclusive team can offer more knowledge and skills in customer relationship management. Also, intense marketing campaigns targeting various niche markets are another way to forge ahead.
Moreover, the company should also hire or consult widely and get expert views on marketing improvement techniques rather than relying solely on their internal team. The company can also engage in commercial advertisements using celebrities and other influential figures in society to push their brand. It is not a guarantee that the suggested methods will work, but it is worth the chase.
The company should focus more on maintaining its consumer satisfaction; in doing so, the company will be able to maintain its customer base, which is essential in increasing company sales. Therefore, there is a need for TK to invest more on how they can get feedback from the customers. The feedback will be vital for them to be able to have a competitive advantage over their competitors in the same market.
References
Hubbard, D. (2010). How to measure anything in business
Stammers, R. (2019). Using monte Carlo analysis to estimate risk
https://www.investopedia.com/articles/financial-theory/08/monte-carlo-multivariate-model.asp
Koop, G. (2005). Bayesian econometrics. Chichester: J. Wiley.
Wilde, J. (2016). The social psychology of organizations: diagnosing toxicity and intervening in
the workplace. London; New York: Routledge, Taylor & Francis Group.
Wood, D., J., (2006). Global business citizenship: a transformative framework for ethics and
sustainable capitalism. Armonk, N.Y.: M.E. Sharpe, Inc.