Customer Value Creation in the South African Mobile Telecommunications Industry

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How to cite this thesis

Surname, Initial(s). (2012) Title of the thesis or dissertation. PhD. (Chemistry)/ M.Sc. (Physics)/ M.A. (Philosophy)/M.Com. (Finance) etc. [Unpublished]: University of Johannesburg. Retrieved from: https://ujdigispace.uj.ac.za (Accessed: Date).

Customer value creation in the South African mobile telecommunications industry

ELDON PHUKUILE

A dissertation submitted in fulfilment for the Degree

Magister Philosophiae

Business Management

Faculty of Management

UNIVERSITY OF JOHANNESBURG

Supervisor: Prof G Goldman

Co-Supervisor: Prof M Roberts-Lombard

2015

DECLARATION

I certify that the dissertation submitted by me for the degree Magister Philosophiae (Business Management) at the University of Johannesburg is my independent work and has not been submitted by me for a degree at another university.

______Eldon Phukuile

DEDICATION

To Jordan, Nicole, Joseph, Donavine, Irwin, Zelia and Angeline – thank you for the love, support and patience.

For what you all have meant throughout, this endeavour is dedicated to you.

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ACKNOWLEDGEMENTS

Primary acknowledgement is to the most important people in my life, my family. Jordan, Nicole, Donavine and Joseph – my dad, thank you for the love, support and patience.

To my Supervisor, Professor G Goldman and Co-Supervisor, Professor M Roberts- Lombard at the University of Johannesburg for the guidance, direction and input that were coupled with long hours of work.

Elsabeth Marnitz performed academic editing. We are extremely obliged to you for the distinction with which this task was performed.

To supportive friends, Andrew and Sam in particular, who played a role in inspiring me to focus on the bigger vision. There is now a mantra in the head: “Just get it done.” This piece of advice-cum-instruction was annoying, necessary, helpful and at times, incriminating.

To colleagues within the Mobile Telecommunications and Consulting industries, as well as the research participants who contributed to the study.

Appreciation goes out to the anonymous academic reviewers for their role in shaping the final product.

Thank you very much for the help, support, encouragement, inspiration and the prayers. At times it felt as if the resilience was failing, perhaps that the stretch of road ahead was too far. Glad that there was a realisation that these were not unique challenges. Now the journey is complete, and new opportunities arise.

In life, it seems that things, events happen for a reason, and that everything happens at the right time. This has been a challenging, albeit rewarding journey.

ABSTRACT

The purpose of the research was to explicate business competitive challenges through increasing scientific knowledge relating to the effect of Value Chain on the Customer Experience within the South African Mobile Telecommunications industry. Operators display a tendency of commoditised competition, offering little differentiation that Customers value. The qualitative and time bound study analysed the perspective of sixteen interviewees, representing the full Value Chain from respective operators. Following the aim to understand the participants’ perception of how the Value Chain impacts Customer Experience, the Content Analysis method of analysis was utilised for the gathering of insights. Findings reflect a lack of maturity in the understanding of Customer Experience and Value Chain, and a resulting incapability to maximise the effect of the Value Chain on the Customer Experience. Notwithstanding, there exists an opportunity to apply a Value Chain perspective in order to improve the Customer Experience and enhance mutual value.

TABLE OF CONTENTS

DECLARATION ii DEDICATION iii ACKNOWLEDGEMENTS iv ABSTRACT v TABLE OF CONTENTS vi EXECUTIVE SUMMARY xiii CHAPTER 1: INTRODUCTION AND BACKGROUND 1 1.1 Introduction 1 1.2 Orientation of the main concepts under analysis 2 1.2.1 The Mobile Telecommunications Industry in South Africa 3 1.2.2 Value Chain 3 1.2.3 Customer Experience 5 1.3 Rationale and problem investigated 7 1.4 Research objectives 10 1.5 Significance of the research 10 1.6 Theoretical framework 12 1.7 Research methodology 13 1.8 Overview of chapters 15 1.9 Conclusion 16 CHAPTER 2: LITERATURE REVIEW 18 2.1 Introduction 18 2.2 Delimitation 19 2.3 Overview of the world under research scrutiny 19 2.4 Introducing the Value Chain concept 20 2.4.1 Definitions of the Value Chain 20 2.4.2 Generic elements of the Value Chain 23 2.4.3 A historical perspective on the Value Chain framework 25 2.4.4 The significance of the Value Chain 26 2.4.5 The Value Chain as a delivery mechanism for Customer 27 Value 2.4.6 Emerging trends in the Value Chain framework 30 2.4.7 The Value Chain and its linkage to Customer Experience 31 2.5 Introducing the concept of Customer Experience 32 2.5.1 Definitions of the concept “Customer Experience” 33 2.5.2 Generic elements of the concept “Customer Experience” 35 2.5.3 The evolution of Customer Experience 40 2.5.4 Customer Experience touchpoints 42 2.5.5 The significance of Customer Experience 43 vi

2.5.6 Different approaches of Customer Experience 45 2.5.7 Emerging trends in Customer Experience 50 2.5.8 Customer Experience as a differentiator 52 2.6 Introducing Mobile Telecommunications 53 2.6.1 Definitions of Mobile Telecommunications 54 2.6.2 Generic elements of Mobile Telecommunications 56 2.6.3 The evolution of Telecommunications 57 2.6.4 The significance of Mobile Telecommunications 58 2.7 Customer Value in the South African Mobile 59 Telecommunications Industry 2.8 Significant events in the Mobile Telecommunications 63 Industry in South Africa 2.9 Conclusion 66 CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY 68 3.1 Introduction 68 3.2 Overview of the research process 69 3.3 Research objective 70 3.4 Research metatheory 71 3.4.1 The Positivist tradition 72 3.4.2 The Interpretive tradition 73 3.4.3 The Critical Theory tradition 74 3.4.4 The choice of the metatheory tradition for the research study 75 3.5 The research approach 75 3.5.1 Qualitative research approach 76 3.5.2 Justification of a qualitative research approach for the study 78 3.6 Research design 78 3.6.1 Types of research design 80 3.6.2 Choice and justification of research design 81 3.7 Sampling 82 3.7.1 Stages in the sampling process 83 3.7.2 Target research population and sampling frame 84 3.7.3 Sampling method 84 3.7.3.1 Probability sampling 84 3.7.3.2 Non-probability sampling 85 3.7.3.3 The choice and execution of the sampling technique 85 3.8 Participant selection 86 3.9 Fieldwork and data collection method 87 3.9.1 The choice and justification of the data collection method 88 3.10 Data analysis 88 3.10.1 The choice of data analysis technique 90 3.11 Important interview decisions to support the research 91 3.12 Research ethics statement 92 vii

3.13 Qualitative research trustworthiness 92 3.14 Discussion on the research process 93 3.15 Reflections 97 3.15.1 The challenges with understanding of the research process 97 3.15.2 The challenge with stakeholder approval of the planned 98 research 3.15.3 The challenge to obtain suitable research subjects 98 3.15.4 The time taken to execute the research project 99 3.15.5 The challenge to select the evidence for the research report 100 3.15.6 The challenge of the snowball effect 100 3.15.7 The challenge of the research tools 101 3.16 Conclusion 102 CHAPTER 4: RESEARCH REPORT AND DISCUSSION 104 4.1 Introduction 104 4.2 Relating the findings to the research objectives 105 4.3 Steps in conducting the research and compiling the findings 106 4.4 Summary of the research codes 107 4.5 Research findings on the Telecommunications industry 108 perceptions, growth and products 4.5.1 How the industry has played out 109 4.5.2 Whether operators are doing the right things in response 110 4.5.3 Recommendations for changes in the industry 111 4.5.4 Leading / directing the change 112 4.5.5 What the industry will look like in 10 years 113 4.5.6 Growth 114 4.5.6.1 Elements that will grow the company 114 4.5.6.2 Elements that will grow the Customer Experience 115 4.5.6.3 What the metrics are to measure growth 117 4.5.7 Products 117 4.5.7.1 What the core product is 117 4.5.7.2 Elements that attract a Customer to a provider 118 4.5.7.3 Elements that drive the creation of products 119 4.6 Research findings on the Value Chain and the impact 120 thereof 4.6.1 Definition of Value Chain 120 4.6.2 Description of the Value Chain for my company 121 4.6.3 How the Value Chain impacts the Customer Experience 122 4.6.4 Whether the Value Chain adds value to the Customer 123 4.6.5 How the Value Chain adds value to the Customer 124 4.6.6 Areas of the Value Chain that add the most value to 126 Customers 4.6.7 Areas of the Value Chain that add the least value to 127 viii

Customers 4.6.8 Theoretical frameworks are great. Application may need to 128 be different 4.7 Research findings on Customer Experience and the status 129 quo 4.7.1 How Customers view company functions 129 4.7.2 The view of a company for the value that it adds to the life of 130 Customers 4.7.3 Description of Customer Experience 131 4.7.4 Different approaches used by firms to measure Customer 132 Experience 4.7.5 Approaches used by Customers to alert operators about 133 their Customer Experience 4.7.6 Recommendations for changes to the manner in which the 134 firm is managed 4.7.7 Assessment of a link between the Value Chain and 135 Customer Experience 4.7.8 Definition of the link between the Value Chain and Customer 136 Experience 4.7.9 Functional areas where there is a Customer Experience 137 4.7.10 How the market views service from operators 138 4.7.11 Where Customer Experience starts and ends 139 4.8 Research findings on the structure of business units 140 4.9 Research findings on strategy 141 4.9.1 Assessment of strategic initiatives that are in 142 implementation 4.9.2 Link between strategic initiatives and company strategy 143 4.9.3 Link between strategic initiatives and Value Chain 144 4.9.4 The understanding that Customers have of strategy 145 4.10 Research findings on the interplay between the Value 145 Chain, Customer Experience and strategy 4.11 Research findings on brand engagement and a personal 146 Customer philosophy 4.11.1 Where brand engagement starts and ends 147 4.11.2 My personal philosophy in dealing with Customers 147 4.12 Conclusion 148 CHAPTER 5: DISCUSSION EMERGENT FROM THE STUDY 150 5.1 Introduction 150 5.2 Telecommunications industry 151 5.2.1 Congruence between scientific literature and research 151 findings of the Telecommunications Industry 5.2.2 Divergence between scientific literature and research 153

findings of the Telecommunications Industry 5.2.3 Insights and interpretation regarding the 154 Telecommunications Industry 5.3 Value Chain 156 5.3.1 Congruence between scientific literature and research 156 findings of Value Chain 5.3.2 Divergence between scientific literature and research 159 findings of Value Chain 5.3.3 Insights and interpretation regarding Value Chain 162 5.4 Customer Experience 164 5.4.1 Congruence between scientific literature and research 164 findings of Customer Experience 5.4.2 Divergence between scientific literature and research 167 findings of Customer Experience 5.4.3 Insights and interpretation regarding Customer Experience 171 5.5 Conclusion 172 CHAPTER 6: CONCLUSIONS AND RECOMMENDATIONS 174 6.1 Introduction 174 6.2 Overview of the study 175 6.3 Satisfying the research objectives 177 6.4 Findings of the research 179 6.4.1 The dynamics within the South African Mobile 179 Telecommunications Industry 6.4.2 The interplay between Value Chain and Customer 180 Experience 6.4.3 The maturity of the South African Mobile 182 Telecommunications Industry in employing the Value Chain to deliver on Customer Experience outcomes 6.5 Principal conclusion resultant from the study 183 6.6 Principal recommendation resultant from the study 183 6.7 Discussion on conclusions emanating from the study 183 6.7.1 The Mobile Telecommunications Industry 183 6.7.1.1 Mobile Telecommunications Industry implications 184 6.7.2 Value Chain 184 6.7.2.1 Value Chain Implications 185 6.7.3 Customer Experience 186 6.7.3.1 Customer Experience implications 186 6.8 Discussion on recommendations emanating from the study 187 6.8.1 Recommendations in terms of literature 187 6.8.1.1 Challenges found in contemporary literature 188 6.8.1.2 Recommendations to address gaps identified in literature 188 6.8.2 Recommendations in terms of research approach 189

6.8.3 Practical recommendations 190 6.8.3.1 Practical Recommendation 1: Establish Value Chain clarity 190 6.8.3.2 Practical Recommendation 2: Implement smart 191 segmentation and business development 6.8.3.3 Practical Recommendation 3: Build deep understanding of 191 the big picture and the role that each member plays 6.8.3.4 Practical Recommendation 4: Deliver the drivers of loyalty 192 6.8.3.5 Practical Recommendation 5: Measure the right things that 193 the Customers value 6.8.3.6 Practical Recommendation 6: Implement a customer-led 193 operating model 6.8.3.7 Practical Recommendation 7: Blend and integrate 194 technology into the Customers’ life in an enabling way 6.8.3.8 Practical Recommendation 8: Develop high service 195 standards and expert knowledge 6.8.3.9 Practical Recommendation 9: Involve the Customer in 195 decision-making 6.8.3.10 Practical Recommendation 10: Reduce barriers to entry and 196 use 6.8.3.11 Practical Recommendation 11: Accentuate the message 196 around operator uniqueness 6.9 Evolved model for delivery of Customer Value 197 6.10 Graphical summary of the research study 199 6.11 Limitations of the study 201 6.12 Proposed future research 202 6.13 Conclusion 203 REFERENCES 204 ANNEXURES 222 Annexure A Glossary of terms 222 Annexure B List of abbreviations 225 Annexure C Interview schedule 226 Annexure D Categories and codes extracted from the data 227 Annexure E Sample interview invitation letter 229 Annexure F Planned interview questions 231 Annexure G Planned interview transcript template 234 LIST OF FIGURES Figure 1.1 The Generic Value Chain 4 Figure 1.2 Graphic depiction of the scope and boundary of the 12, research study 197 Figure 2.1 The Customer Experience Value Chain 32 Figure 2.2 The full Customer Journey (Telecommunications) 36 Figure 2.3 The Customer Experience Journey 37

Figure 2.4 Customer Journey map 1 49 Figure 2.5 Customer Journey map 2 49 Figure 3.1 Steps to execute the research project 69 Figure 3.2 The relationship between meta-theories, methodological 76 approaches, and the real world Figure 3.3 The design process: signposting the outcomes 79 Figure 3.4 A classification of research design types 80 Figure 3.5 Stages in selection of a sample 83 Figure 6.1 Organisational Levers to improve and deliver Customer 198 Value Figure 6.2 Graphic depiction linking objectives, findings and 200 conclusions of the research study LIST OF TABLES Table 2.1 Definitions and explanations of Value Chain 20 Table 2.2 Definitions and explanations of Customer Experience 32 Table 2.3 Definitions and explanations of Mobile Telecommunications 54 Table 3.1 Tools employed during the research process 101 Table 4.1 Research themes and indicators resultant from the study 108

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EXECUTIVE SUMMARY

Mobile Telecommunications in South Africa has been a fascinating case study as it fundamentally impacts culture and practices for business and consumer Customers respectively. There have been regular, behavioural shifts within the industry from regulatory, technology and market perspectives. Notwithstanding, there is a lack of understanding of the industry’s drivers of Customer Value.

This research study evaluated the strength of the Value Chain perspective in impacting the Customer Experience as one of the strategic differentiators for the industry. Customer Experience creates a platform for the outcome of Customer Value, and underpins sustainable organisational profitability by influencing Customer loyalty.

The Value Chain framework from Michael Porter is a strategic tool to analyse the competitive strengths of an organisation and establish pockets of strength and competitive advantage. This research study has identified a lack of maturity in the understanding and implementation of a Value Chain perspective in order to deliver Customer Value within the Mobile Telecommunications Industry in South Africa.

Mobile Telecommunications launched in South Africa in 1994 and speedily became a successful industry that quickly and repetitively surpassed growth projections. As a result, it is sometimes said that the industry is ‘printing money’. This reality has, however shifted with the recent events that highlight competitive and financial pressures, a higher Customer Experience expectation from Customers and a realignment of business models and strategies for future survival for the operators.

Historically, the industry has practised ‘gifting’ of products and solutions to Customers. This was based more on the internal capability of the organisation, and less on the Customer need. This approach reflects a lack of maturity, or a lack of will to use the Value Chain as a delivery mechanism for Customer Value.

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This research study employed a qualitative research approach through in-depth interviews to investigate the degree to which the activities of the Value Chain affect the Customer Experience. Qualitative research exhibits loose control of variables but richness in the insights that explain social interactions. The ‘insider’ perspective allows the researcher to engage with the research world as a counterpart, seen through the purposive selection of interviewees. This approach and accompanying methods were selected to fulfil the research aims in the most suitable manner.

A content analysis technique for data analysis provided an interrogative approach to engage with the research responses. Meaning and theory were deduced through textual coding. Findings and insights shared were used to form the basis of new theory, as a process of analysis of responses was performed against academic literature. What emanated from this process were insights that showed congruency, divergences and significant insights about the concepts under research scrutiny.

The outcome of the data analysis and discussion process confirmed the following: • The Mobile Telecommunications Industry is dynamic and reconfiguring for a new reality. What Customers value is contextual, and therefore evolving. • Value Chain is the delivery mechanism to deliver Customer Value. Notwithstanding, this needs to be implemented in a customer-focused manner. • Contemporary business and competitive approaches result in weak strategic differentiation and inadequate delivery of emotional Customer Experience connection. This results in weak loyalty and less than ideal sustainable profitability.

The study concludes with specific recommendations for academic theory and literature, as well as methodological research practice recommendations. However, the pinnacle of this research is the practical recommendations for operators to adopt, and the supporting models reflecting the multidimensional levers to deliver Customer Value.

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CHAPTER 1 INTRODUCTION AND BACKGROUND

1.1 INTRODUCTION This research study endeavours to increase the scientific understanding of the Value Chain impacts on the Customer Experience – within the Mobile Telecommunications Industry, and within South Africa. The study will analyse the interplay between activities of the Value Chain and assess their respective impacts on the Customer Experience. The rationale is to evaluate the relevance of a periodic assessment of the Value Chain. This may enable industry operators to measure and make proactive, strategic adjustments. This can enhance the realisation of industry objectives, improve the Customer Experience, and derive value.

Chapter 1 will provide an overview of the Mobile Telecommunications Industry in South Africa that is characterised by a dynamic operating environment, coupled with a need to protect market position by creating loyalty within their Customers. Telecommunications infrastructure is an important variable for conduciveness of growth and it is cheap to acquire (Lee, Levendis & Gutierrez, 2012:469).

Emphasis is placed on the history, growth, success and changes within the industry. Additionally, the discussion highlights that the level of Customer Experience could be poised as the next big differentiator to provide competitive advantage within the industry.

Chapter 1 will also introduce the Value Chain framework. This model describes how a firm or industry can perform analysis of its structure, as well as determine areas of strength that provide the firm with a platform to produce Customer Value and achieve its business objectives (Mascarenhas, Kesavan & Bernacchi, 2004:486). This is because the Value Chain design reflects the strategic direction of the firm, whilst the effectiveness of execution provides value to Customers. A Value Chain creates links 1

that originate with upstream suppliers and connects to Customers through the products and services that are delivered (Gereffi & Fernandez-Stark, 2011:2).

The chapter will also introduce Customer Experience as a business strategy (Reimann et al., 2009:3), and simultaneously as an outcome. As stated by Maklan and Klaus (2011:4), “the link between customer satisfaction and favourable business outcomes is well established”. Customer Experience is the emotion within a Customer (Temkin, 2014; Hinshaw, 2014) after interactions with an organisation. This is a fairly new business topic for which maturity of understanding is still developing (Klaus & Maklan, 2011:1). This is because of the need to view service and interactions from the Customer’s perspective, and not from the perspective of the organisation. When understood maturely, and when implemented effectively, Customer Experience Management delivers benefits that Customers value, and resultant business value (Shaw, 2008:4; Foreman, 2013:96).

Chapter 1 will further denote the rationale for the research. The research problem statement is identified by deductively analysing the dynamic interplay between the perception of the Value Chain and the objective of Customer Experience improvement within the South African Mobile Telecommunications Industry. Linkages are established between the research problem statement, the research objectives, and the supportive theoretical framework / research methodology to realise the research objectives.

1.2 ORIENTATION OF THE MAIN CONCEPTS UNDER ANALYSIS This section will briefly describe the pillars of the research study. This will establish the context, which is the physical business environment wherein the study is performed.

The discussion commences with the Mobile Telecommunications Industry in South Africa. Secondly, the Value Chain framework is introduced, described by its ability to

act as a structured mechanism to bring value to Customers through strategic decision-making that balances organisational goals with market needs and internal capabilities.

Lastly, Customer Experience is positioned as the primary marketing focus in many organisations today. Improving the Customer Experience is now an important strategic objective that is employed to gain and retain Customers – beyond communicating product features and marketing organisational strengths.

1.2.1 THE MOBILE TELECOMMUNICATIONS INDUSTRY IN SOUTH AFRICA This industry is technology-driven and fast-paced. In future, Customer delight and experience will be a key differentiating factor. Some of the strategic objectives for the three largest Mobile Telecommunications operators within South Africa are to continue to achieve growth in revenues, maintain market position, as well as to continuously improve and delight Customers (Cell C, n.d.; MTN, n.d.; Vodacom, n.d.).

It is of scientific significance within this research study to understand the areas of the Value Chain that contribute to, or impact on Customer Experience, impact the bottom line, and have bearing on the stakeholders’ investment. This leads to an understanding of elements that provide competitive advantage for the industry to deliver ‘Customer delight.’

1.2.2 VALUE CHAIN The Value Chain concept by Michael Porter (1985) enhanced earlier theory pioneered by Adam Smith (Scientific Division of Labour), Frederick Taylor (Scientific Management), Henry Mintzberg (Strategy) and others – as a framework to analyse an organisation strategically to determine how Value is added, and how differentiation is obtained over industry rivals.

Michael Porter’s Generic Value Chain framework as illustrated in Figure 1.1, is documented as follows:

Figure 1.1: The Generic Value Chain Source: Porter (1985:37)

Theory around Value Chain indicates a shift from a firm-level analysis to industry- level ecosystems, or global Value networks (Nord, 2005:1; Xie, 2008:6). Mobile Telecommunications operators are balancing this new reality as technology evolves, needs evolve, and competition takes on new forms that point to a need to approach Customer lifetime value and innovation differently. This includes co-creation with Customers (Helm & Jones, 2010:580). Value Chain design reflects the strategic direction of a firm, and the better the execution of the Value Chain, the better the ability of the organisation to deliver the right product, cost, quality and turn-around time to Customers (Salim, 2012:3).

Value Chain is concerned with the strategy and steps to bring value to Customers by linking suppliers, production steps and Customers together (Mitchell, 2012:465) and analysing the handovers for competitive position. Customer Experience is concerned with the ‘how’ of the Value Chain delivery so that this brings long-term loyalty from Customers (Helm & Jones, 2010:580), repeat business over a Customer’s lifetime, and thereby better profitability coupled with lower costs.

Value Chain enables the attainment of strategic direction and differentiation for competitive advantage by building focus on activities that add value and prioritising

those activities. Value is added by solving Customer problems. The ‘vehicle’ to transfer the Value comprises the products that are created and sold to Customers. Notwithstanding, attention should be paid to the way the Value Chain is executed as this creates an emotional outcome for the Customer. Business should aim to deliver a positive Customer Experience to lower costs and enhance retention and loyalty.

Value Chain is an abstract framework that establishes virtual linkages between suppliers, production and Customers as a mechanism to coordinate activities. As a tool to observe interactions and handovers, Value Chain analyses the value and costs that are contributed by activities. This is a wider definition than Supply Chain (concerned with manufacturing and may actually limit the Customers’ accessibility to products), as elements such as demand planning, market definition and establishment of Customer needs exist within Value Chain.

In summary, Value Chain supports the technical capability to commercialise products. Products are the vehicles that transfer value by providing a solution to a Customer’s problem. Good Value Chains incorporate elements of co-creation with rivals or Customers and thereby better meet expectations. The value delivered exists as tangible value through products and intangible value through emotions that results in an emotional response within the Customer. This emotional response is termed the Customer Experience. Customer Experience, as an important, strategic differentiator will now be deliberated.

1.2.3 CUSTOMER EXPERIENCE Customer Experience Management is simultaneously a business strategy (Malviya & Varma, 2012:4) and an outcome (Chang & Horng, 2010:2401) that produces three important benefits – retained business, Customer loyalty and differentiation (Drotskie, 2009:143). The outcome perspective of Customer Experience is the emotional reaction that Customers have as a result of interactions (Shaw & Dobrev, 2012:17) with an organisation over a period of time.

Customer Experience evolved from the Service Quality drives in the 1980s through the Customer Service focus in the 1990s (Drotskie, 2009:93; Maklan & Klaus, 2011:785). Customer Experience is either delivered deliberately, or ignorantly through all the touchpoints within a company. Increasingly, Customers are interacting across different touchpoints as part of their overall steps to interact (Kirkby et al., 2003:5). Customer Experience Management captures Customer sentiment so that visible changes can be made (Markey et al., 2009:44; Verint, 2014).

Customer Experience should be seen from the Customers’ perspective, not from the internal company perspective (Nasution & Mavondo, 2008:204). Analysis of Customers interactions with organisations has shown that there is an established and repetitive life cycle. This is referred to as the Customer Journey (KPMG International, 2013:4) – a framework that codifies the flow of the Customer Experience. The Customer Journey is unique for each Customer, or for Customer segments. Elements and dimensions of the Customer Journey can be analysed and designed to deliver a positive emotional outcome and improve the Customer Experience.

Customer Experience initiatives should be designed (Pine & Gilmore, 1998:102) to reduce the chasm between Customer expectation and the Customer perception as a result of service received. Measurements are key to these steps, and should be performed to measure operations and Customer sentiment (Meyer & Schwager, 2007:123). Emphasis must be on measuring what Customers value (Dixon et al., 2010:7), and improvements must be designed and implemented from the Customers’ perspective.

Mobile Telecommunications operators are not renowned for the delivery of great Customer Experience (Shaw, 2012). As competition and market dynamics evolve, this realisation that Customer Experience is a differentiator (Drotskie, 2009:2), is sinking in. South African operators are showing signs of maturing towards understanding and implementation of Customer Experience strategies. Over time, this could produce benefits to Customers by providing them with intangible value.

This could translate into loyalty and repeat purchases (Shaw, 2008:12), and in that way reciprocate value back to the organisation.

1.3 RATIONALE AND PROBLEM INVESTIGATED Service industries are expanding and transforming, and continue to do so at a rapid pace. From a Customer perspective, there is commoditisation and modest separation between the technological capabilities and costs of Mobile Telecommunications operators. This raises a question about what drives differentiation and a preference for Customers to choose one provider over another. Chang, Yuan and Hsu (2010:122) argue that the competitive position of a firm lies in generating impressive experiences through innovative delivery and co-produced experiences that ‘connect’ with Customers.

Mobile Telecommunications operators have well documented core business descriptions. “The traditional business model in Telecommunication was a vertically integrated model where one party owned the network infrastructure, operated the network, and delivered the services over the network” (Bose, Saha & Huang, 2012:226).

Emphasis is placed on strategic focus areas to grow business, and focus on core business. Plans are often made to ensure that this fits into the Value Chain. Networks, such as Indonesia’s PT Indosat have divested of tower assets in order to fund expansions, explains Bushell-Embling (2010:12) as well as Vodacom’s disposal of the non-core carrier unit of Gateway Carrier Services that it had acquired only four years earlier, states Mawson (2012).

Information and Communication Technology (ICT) industry evolution through legislation, competition, partnerships, saturation and Customer preferences, will require changes to business models, business strategies and Value Chains to remain competitive. Glazier (2007:15) believes that South Africa and the region are taking correct policy / regulatory steps to increase competition, create space for new

entrants, and create more opportunities for smaller companies by stating that “our policy framework and the technology-neutral licensing and regulation are creating an environment for convergence.”

How does this affect the Customer? Are the impacts on the Customer positive or negative? How will this impact the overall Customer Experience? Bose et al. (2012:227) comment “the open access business model allowed consumers to choose between SPs to meet their individual demands at a lower tariff… there was a need to change the business model and try to move up the Telecommunication Value Chain by providing additional services.” There are declining revenues in traditional Telecommunications services due to competition and Customer preferences. Business Model changes are required to provide value to the Customer that he will pay for, and as a worst case, allow the operators to remain in business.

Mobile Telecommunications operators also need to identify the areas that will affect future revenue streams. Historical Customer trends and past company performance are no guarantee, or indication of likely future performance. This risk occurs for both fixed-line and mobile operators. “Telkom recognises business models in the ICT sector are changing at an increased intensity. This is forcing Telecommunications operators to develop new business models, says CEO Reuben September… Customer demand, technology advances and a changing regulatory environment are driving change in ICT business models. He also noted that mobile operators are under the same pressure experienced by fixed-line operators” (Senne, 2007:1).

It is the Customer who determines the success or failure of an operator because they choose to buy its products. The provider must therefore understand the Customer needs and supply it timeously, and at the right cost. In this way, the operator has an indirect, yet important influence over its own success. Regardless of the regulatory climate, only customer-centred convergence suitably filtered down into the new Value Chain will bring any significant benefits. “With the legacy business model running out

of runway, the operators have to rethink their revenue channels and modify their approach to business innovation” (Savitz & Norton, 2012:57).

Innovation itself needs to be relevant to the needs of the end consumer. Pynnönen, Hallikas and Ritala (2012:1) describe a customer-driven business model innovation in order to bring Customer Value. This is because the firm is part of a larger system. “Lack of understanding of Customer preferences and the value of technologies leads to the creation of services with no users… The aim of customer-value analysis is to integrate the Customer into the firm’s R&D processes” (Pynnönen et al., 2012:1). This will help firms develop solutions that meet Customer needs and eliminate the tendency to supersede advancing technology above Customer Value.

“Customer insights have value” (Kumar & Bhagwat, 2010:15). Tapping into the knowledge of Customers improves engagement and experience. Firms who listen to their Customers can identify needs and gain competitive advantage over rivals. Bringing Customers into the Value Chain as co-creators to help with the research and product innovation activity gives a sense of co-ownership.

Value Chain analysis and optimisation play a role in mobile operator re-invention to ensure Customer loyalty. Vyas (2010:34) discusses the role of back-office systems in driving Customer Experience by stating that the Operations and Billing Support systems (OSS and BSS) are being invested in heavily, so that new services are enabled while simultaneously improving the quality of experience to new levels.

Michael Porter’s Value Chain framework can be used to create strategic differentiation (Porter, 1985:36), specifically relating to Customer Experience (Malviya & Varma, 2012:5). The misalignment of stakeholder perceptions regarding the impact of Value Chain design, and what Customer value potentially impacts the Customer Experience undesirably. This detracts from the resultant value and sustainability that the operator will derive.

The background and rationale discussion leads to the following problem statement: There is insufficient strategic differentiation between Mobile Telecommunications operators in South Africa. A tendency of commoditised competition results in inadequate delivery of Customer Value and customer-centric Experience.

Given the above discussion as well as the problem statement, the research question therefore is: How do, and to what extent do the activities of the Value Chain affect the Customer Experience in the South African Mobile Telecommunications Industry?

1.4 RESEARCH OBJECTIVES Following on from the problem statement and research question, the primary research objective of the research project is to: Analyse the understanding of the Value Chain within the South African Mobile Telecommunications Industry against the backdrop of industry changes in order to establish the perception of the degree to which the various areas of the Value Chain contribute to, or affect the Customer Experience.

The secondary research objectives listed will ensure that the primary objective is met: • To analyse the dynamics at play within the South African Mobile Telecommunications Industry. • To obtain an understanding of the perceived interplay between the Value Chain and Customer Experience within the South African Mobile Telecommunications Industry. • To assess the maturity of the South African Mobile Telecommunications Industry in utilising the Value Chain to deliver on overall strategic objectives as well as the desired Customer Experience outcomes.

1.5 SIGNIFICANCE OF THE RESEARCH This research study endeavours to increase the level of scientific knowledge relating to the effect of Value Chain on Customer Experience, specifically within the South African Mobile Telecommunications Industry.

The contemporary landscape within the Telecommunications sector is rapidly evolving, becoming more exposed to competition and diversified product offerings 10

from previously unknown competitors. A key differentiating factor for keeping Customers, maintaining / growing market share and ensuring company growth – outside of network quality and reliability, or brand – is the total Customer Experience that the mobile operator provides as an outcome of its Value Chain design.

The South African Mobile Telecommunications voice market is saturated. According to Bornman (2012:486), South Africa has a 92.67% penetration rate – following the trend in developed countries where almost every person already has a mobile phone. Operators have turned to complimentary, evolved and diversified product offerings such as mobile television, internet, e-mail and fixed-line communications, all bundled together into “converged” solutions in order to bring, and derive more value.

Theoretically, and from a technology perspective, these may be good solutions for Customers. However, it may be relevant to establish whether forcing these strategies to ‘fit into’ the Value Chain pays off for the company, truly satisfies the Customer, and provides Customer Value.

Does the Customer’s primary, transactional interest lie with technology-driven products, or in after-sales product support, product training and configuration? What about services such as hardware repairs? Do the activities of the Value Chain affect the Customer negatively when constraints are affected to save budget, or achieve stretched internal targets while delaying customer-centric projects? Is this being done at the expense of the Customer Experience with the operator?

This research will conduct a qualitative study of the abovementioned critical themes in order to assess the focus on strategic differentiation and Customer Experience aspects of business within the evolving ICT industry. The Customer environment where the Customer is “King” and the provider marketplace is his kingdom. This is an environment where the Customer feels cherished and willing to spend his valuable money to consume the benefits offered to him by the operator, because the Customer Experience is valued.

1.6 THEORETICAL FRAMEWORK The research study interrogates Value Chain and Customer Experience within the Mobile Telecommunications Industry in South Africa. The theoretical framework that underpins the study is illustrated by Figure 1.2, and depicts the perspective of the researcher (as informed by both literature and real-world experience) on how the “Operator World” and the “Customer World” relate:

Figure 1.2: Graphic depiction of the scope and boundary of the research study Source: Researcher’s own construct

The Value Chain is a tool used by businesses to uncover competencies and differentiation over competitors. Competitive advantage can be obtained through the delivery of a memorable, personalised and contextually relevant Customer

Experience. Given that the study interrogates how Value Chain impacts Customer Experience, Customer Experience is positioned as the focus point of the research.

Mobile Telecommunications operators in South Africa are seeking competitive advantage. Moreover, the Mobile Telecommunications Industry seeks to attain loyal, satisfied Customers, and ultimately, sustainable profitability through this loyalty. Therefore, the South African Mobile Telecommunications Industry is the industrial paradigm delimiting the research. The objective is to understand Customer Experience within this theoretical framework and understand the interplay with the Value Chain. Research study conclusions drawn will be interpreted to highlight significance and establish recommendations for the industry.

1.7 RESEARCH METHODOLOGY This is a qualitative research study through which the thoughts, opinions and understanding of the research participants in the world under research are sought for scientific understanding and analysis. Simultaneously, the researcher is an “insider / passive participant” to the research world under scrutiny. This occurs within the following contexts: • A consumer / Customer of Mobile Telecommunications services. • A Customer Experience consultant / practitioner. • A participant in the Mobile Telecommunications Industry for 12 years, having worked across the functional business areas of Information Technology, Customer Relationship Management, Business Process Optimisation and Customer Experience Management. • An academic interest in the wider areas of Business Strategy, Customer Experience as well as the components of Human Psychology and Emotion that trigger emotional responses. • Personal thoughts, perceptions and background life experience.

A key intended outcome of the research is to make practical recommendations for business managers within the Mobile Telecommunications industry to solve business 13

challenges relating to competition and Customer Experience. The theoretical framework, research approach and methods followed are based on decisions to support this outcome. This includes the decisions to adopt the phenomenology research tradition and supporting qualitative research paradigm. The process will emphasise significance of participant perspective for social meaning over statistical validity.

Notwithstanding, elements of research trustworthiness are addressed through the empirical research process and the steps taken to ensure visibility of individual interview transcripts and various research outputs to the interested academic community. The research sample was selected conveniently and purposively, but represents diverse and cross-functional perspectives. Research subjects were fully informed about the research, and the steps to record and transcribe the research interviews. Finally, the transcribed text was provided to each interviewee for completeness and transparency. The interview itself was semi-structured and flexible – although specific areas of interest were delved into, away from the core interview structure.

The method used to analyse the research data collected and draw findings and conclusions, centred on qualitative Content Analysis whereby the raw data was coded for significant research meaning to emanate from the raw data. This allowed the raw data / interviewee participants to collectively determine the research theory base. The research findings are self-defined through the methodological design and research activities.

Coding was performed using a qualitative research analysis software tool – Weft QDA. Linking of texts into concepts followed a case-oriented approach to form a view of the interplay between Value Chain and Customer Experience within the South African Mobile Telecommunications Industry.

Finally, to complete Chapter 5 as a discussion / analysis of similarities and differences between academic theory and the empirical research findings, a 14

spreadsheet software programme was used to summarise paragraphs, link and compare sentiment.

1.8 OVERVIEW OF CHAPTERS Chapter 1 introduces to the research study. The chapter defines the research scope and boundaries by introducing and describing the pillars under research analysis – Value Chain and Customer Experience, while positioning their context within Mobile Telecommunications. The chapter deductively defines the research problem, research delimitation, research aim and scope of the research study. The theoretical framework that underpins the study is graphically depicted as the researcher’s perspective regarding Strategy and Customer Value.

Chapter 2 documents a theoretical overview of Value Chain, Customer Experience and the Mobile Telecommunications Industry. It is a detailed theoretical scanning of the available scientific, authoritative and seminal literature sources. The disciplines are defined and contextualised through the use of journal articles and relevant popular press covering Value Chain, Customer Experience and the Mobile Telecommunications Industry. The theoretical interplay between Value Chain and Customer Experience is summarised against the backdrop of the South African Telecommunications industry.

Chapter 3 specifies the Research Methodology as the approach to research study. Focus is on research design, sampling technique, data collection steps and data analysis methods. The “Three Worlds Framework” is presented and the research tradition, research approach and supporting methods are selected and justified as the methods that will deliver on achieving the aim and objectives of the research study.

Chapter 4 is the research findings report. The steps taken to perform the research are documented and the research codes that emanate from the data gathering are specified. Findings of the research study are summarised, providing direct evidence

for the claims reached. The collated research insights are the primary source for qualitative analysis, and for logically deducing the research findings and conclusions.

Chapter 5 provides a comparison between the research findings and the literature review to highlight common understanding and divergence of views between the research subjects and literature. This chapter establishes insights and builds theory, while forming the basis of arguments presented in the conclusions and recommendations of Chapter 6. Each research pillar topic is discussed separately to confirm congruence between Literate Review and research interviewee perspectives. Thereafter, a discussion takes place to interpret the above and establish the insights.

Chapter 6 delivers research and actionable recommendations that are based on the findings, the evidence, and the insights that are presented in Chapters 4 and 5. Conclusions are drawn for each of the respective research pillars. Thereafter, recommendations are made. These fall into three areas – recommendations for theory / literature, recommendations for research approaches and methods, as well as practical recommendations aimed at business managers to solve business challenges. A final logical linkage of research objectives to research findings and recommendations is made. Suggestions for possible, complementary future research areas are proposed.

The report includes a reference list as a record of sources consulted, as well as appendices containing samples of communications and artefacts used in executing the research study.

1.9 CONCLUSION Chapter 1 has set the scene for the research project by introducing the research problem. Michael Porter’s concept of Value Chain is introduced as a tool for strategic differentiation that has an impact on the Customer Experience. The Mobile Telecommunications Industry in South Africa has been introduced as the industrial paradigm that delimits the study. The Problem Statement, Research Aim and the

Significance of the research have been summarised. The researcher’s perspective on the interplay between Strategy and Customer Value, or the organisational view and the Customer view is documented to frame the researcher’s understanding of theory.

Chapter 2 will provide a basis for the understanding of the relevant business environment, academic context and the boundaries that govern the research. A discussion of Value Chain, Customer Experience and of Mobile Telecommunications is presented. These concepts are integrated theoretically, and within the context of the South African Mobile Telecommunications Industry.

CHAPTER 2 LITERATURE REVIEW

2.1 INTRODUCTION Chapter 1 introduced the research project by discussing the research problem within the Mobile Telecommunications Industry in South Africa. An overview of the Value Chain as a tool for strategic differentiation was provided. Customer Experience was described as a business objective, as well as a desirable outcome that leads to Customer Value and organisational value. Chapter 1 specified the research problem that flows from the high-level overview of the research pillars, and specified the research objectives for the research study.

Chapter 2 provides the basis for the understanding of the relevant business environment, the academic context, the research context, and the boundaries that govern the research. The chapter will document an overview of the available authoritative, scientific, and academic literature on the concepts of the Value Chain, Customer Experience and the Mobile Telecommunications Industry. These pillars will be defined and contextualised with each other so that the “golden thread” of their interplay is clarified. This confirms the business / industrial context for the research study within the South African Mobile Telecommunications Industry.

Each of the three topical pillars of the research is introduced and explained, using definitions from various sources. This allows the common and consistent elements between definitions to be highlighted. Furthermore, the history behind the pillars is explained before the research and business significance of the element is documented. Emerging and future trends are discussed so that the full evolution of the discipline can be understood. Importantly, the three pillars are integrated to provide an understanding of how Customer Value emerges within the Mobile

Telecommunications Industry – where the Value Chain and Customer Experience intersect.

The South African Mobile Telecommunications Industry is dynamic and evolving. Selective events are unpacked to clarify their impact on the industry, as well as on the Customer Experience.

2.2 DELIMITATION The research study focuses on the perceived contribution and impact of Value Chain activities on Customer Experience within the South African Mobile Telecommunications Industry. Notwithstanding, the study is limited to the three largest South African Mobile Telecommunications operators, which account for 80% of market share.

The literature review of the fundamental, salient academic points is limited to the following themes: • Value Chain. (Michael Porter’s Value Chain framework includes a financial contribution / margin element. Interrogation of margin is excluded from the scope of the research.) • Customer Experience. • Mobile Telecommunications.

2.3 OVERVIEW OF THE WORLD UNDER RESEARCH SCRUTINY Mobile Telecommunications in South Africa began operations in 1993. Now, 20 years on, there are changes in the industry. These changes range from political / legislative / regulation changes, to changes in market needs, to technological enhancements, to new marketplace competitive pressures. Incumbents in the industry need to adapt, innovate, and look for ways to differentiate themselves in order to stay ahead of the pack. Michael Porter’s concept of Value Chain provides a framework / method to evaluate a company strategically. 19

Strategic management is about creating and carrying out resolutions that enable an organisation to achieve its stated goals. This study will appraise different stakeholder opinions on the Value Chain of the Mobile Telecommunications operator industry within South Africa, and deduce the significance of these opinions from the perspective of Customers and their Customer Experience with their chosen operator.

2.4 INTRODUCING THE VALUE CHAIN CONCEPT This section will introduce and investigate the management framework, Value Chain. Michael Porter (1985) introduced the Value Chain concept in the book entitled “Competitive advantage: creating and sustaining superior performance.” Porter described the generic Value Chain and described it as a way to break up the functions of an organisation into strategically relevant activities that allow the analysis of each activity for its ability to create sustainable competitive advantage.

2.4.1 DEFINITIONS OF THE VALUE CHAIN Michael Porter’s seminal work on Value Chain was introduced in the 1985 book, Compete Advantage: Creating and sustaining superior performance. Porter’s framework serves as the point of departure for the literature review. Beginning with Porter’s own definition, the following are explanations of the Value Chain.

Table 2.1: Definitions and explanations of Value Chain DEFINITION SOURCE Value Chain disaggregates a firm into its strategically relevant Porter activities in order to understand the behaviour of cost and the (1985:36) existing and potential sources of differentiation. A firm gains competitive advantage by performing these strategically important activities more cheaply or better than its competitors. A firm’s Value Chain is embedded in a larger stream of activities, the value system.

Every firm is a collection of activities that are performed to design, produce, market, deliver and support its product… A firm’s Value Chain and the way it performs individual activities are a reflection of its history, its strategy, its approach to implementing its strategy and the underlying economics of the activities themselves.

DEFINITION SOURCE Traditional telecom industry era: Telecom operators mainly Wei, Jianming, provide basic telecom services, which are voice-based, relatively and Yang simple and also completely dependent on telecom network. All (2013:243) telecom services are provided by the telecom operator alone, and all revenues remain with the telecom operator… basic telecom operators are responsible for building and operating the basic network, terminal manufacturers are responsible for providing terminal devices, such as mobile phones and fixed telephones, Customers are at the end of industry chain and are the end users of the service.

Post 3G era: Evolution to a mesh structure – Value stream becomes complex and relationship of telecom industry with cooperation, strategic alliances, resource sharing and process connection. The value centre of the industry chain is transferred – The contribution to value creation of each link in the telecom industry chain is redefined, moreover, the value and profit of the industrial chain are transferred. The correlation between telecom industry and others is strengthened, and the industry chain becomes a dynamic opening – As the telecom service continuously penetrates into all fields of daily life, business integration between the telecom industry and other industries becomes deeper and deeper. The trend of alternatives and the overlap relation among industries are increasingly obvious.

Value Stream of Telecom Industry Chain in Post-3G era: Telecom operators are facing the alternative competition from Internet enterprises on the aspects of business, resources, the business model… Mobile applications, such as Mobile IM, occupy Mobile network signalling and data channel for long hours, replace SMS and voice services, and make telecom operators face the danger of being “dump pipe”… Overall, the role of the industry chain is being substituted, and the value in the industry is decreasing, thus making telecom operators face enormous threats. The GVC approach tries to understand how the input of supplies, Khara and production, trade, consumption and disposal of goods and services Lund-Thomsen are co-ordinated on a global scale in inter-firm relationships as well (2012:262) as how local firms may engage in different industrial upgrading strategies in such chains. Describes the full range of activities required to bring a product or Mitchell service from conception, through the different phases of (2012:465)

DEFINITION SOURCE production. The product life cycle. Here the system consists of the individual Skaar and Fet processes in the Value Chain… The term ‘Value Chain’ here refers (2012:229) collectively to the two last systems: the extended Supply Chain and the product life cycle. Value Chain analysis describes the activities that take place in a Salim (2012:1) business and relates them to an analysis of the competitive strength of the business. The Value Chain analysis Model by Michael Porter in 1985 is the initial motivation of this paper. According to Porter (1985), the Value Chain analysis describes the activities the organisation performs and links them to the organisation’s competitive position. In a fast-changing competitive environment, the fundamental logic Acharyulu and of value creation is also changing and in a way that makes clear Shekhar strategic thinking to survive the global competitive environment. (2012:91) Every firm occupies a position on a Value Chain. Upstream suppliers provide inputs. The firm then adds value to these inputs, before passing them downstream to the next actor in the chain, the Customer. Value activities are related by linkages within the Value Chain. Tallon Linkages are relationships between the way one value activity is (2011:13) performed and the cost or performance of another… linkages can affect firm performance through optimisation or coordination. Optimisation refers to potential trade-offs between activities… Coordination refers to the physical hand-off of products or services between processes. Best practice organisations use a process that focuses on function, Kaczmarek cost and quality; one that replaces "want" with "need" and that (2011:72) encourages objectivity. That best practice is Value Analysis. They see Value Chain analysis as providing a basis for making Walker and visible the interactions and interdependencies within the activities Scott (2011:42) of an organisation. Co-creation also implies that a firm’s internal Value Chain, rather Helm and than being its source, is only one part of a larger system in which Jones value is created by managing a virtuous cycle of stakeholder (2010:580) expectations, successful brand delivery, satisfaction and loyalty that combine to generate sustainable and superior industry returns. A value-adding process in which an organisation might engage… Xu and Bernard researchers mainly organised the knowledge Value Chain by (2010:963) arraying different levels, describing the stages of an organisation’s activities, from acquiring knowledge to using it… knowledge value increases during its evolution process and the value is greater when the knowledge is ‘closer’ to the end (target). 22

DEFINITION SOURCE Differentiation usually arises from one or more activities in the Drotskie Value Chain of the organisation that create a unique value (2009:83, 242) important to buyers… The focus of Customer Relationship Management has evolved from Customer Satisfaction to creating value for the Customer. In a model of value creation, Customers are viewed as active participants in the Value Chain and not just recipients of goods and services. A Value Chain is made up of a chain of activities… A most simple Xie (2008:6) case where a product is produced within one organisation. The product gets some value at each activity along the chain. The value-adding activities are categorized into primary activities and support activities… The Value Chain analysis describes those activities a business organisation performs and relates them to the company’s competitive position… The Value Chain concept can be extended beyond individual organisations, as to make up an industry-wide Value Chain or value network. Organisations are elements of a value system.

2.4.2 GENERIC ELEMENTS OF THE VALUE CHAIN There are salient elements defining the respective descriptions of a Value Chain. Michael Porter’s definition of the Value Chain mechanism / framework may be used to identify strategically relevant activities in order to find strategic and sustainable competitive advantage for the firm - relative to industry rivals.

Value Chains within the Mobile Telecommunications Industry are evolving as technology evolves and disintermediation occurs. Mobile Telecommunications operators now grapple with a reconfiguration of the Telecommunications ecosystem, and need to identify different opportunities for competitive differentiation. These could play out in cost control in networks and systems, in collaboration with rivals or partners – working together in new ways, through different value propositions that reflect Customer understanding and a focus on lifetime value, as well as through innovation (Rouffaert, Tucker & Bultema, 2012:1; Meier, Friedrich & Blankenstein, 2004:5). These are elements that reflect a firm’s approach or design of the Value Chain. 23

Porter’s model was essentially a “firm-level” model that described the workings of an organisation as a “process” model. The design of the Value Chain of a firm reflects the firm’s strategic objectives and approach to implementation of the strategy (Porter, 1985:46). Nord (2005:27) states that certain activities within an organisation need to be aligned in order to achieve the organisational strategy. Berndt (2003:1) describes Value Chain as a tool for a firm to analyse strategically relevant activities for sources of Customer Value.

Porter’s generic Value Chain describes activities and relationships between activities. These are specifically related to develop products and deliver value to end- Customers. Primary activities of the Value Chain are inbound logistics, operations, outbound logistics, marketing and sales as well as service. Secondary activities include infrastructure, human resource management, technology development and procurement. Value Chain Initiative (2004:1) defines Value Chain as: “collaborating vertically to achieve a more rewarding position in the market.” Importantly, the connected links are recognised between activities, and value is increased at each stage.

The better the execution of the Value Chain, the better the competitive capability of the company to deliver value to the Customer. Value Analysis – if executed objectively – allows a firm to better match Customer needs. Kalyanaram and Gurumurthy (2008:5) specify that the holistic Value Chain should create a value- adding “ecosystem” that provides tangible and intangible benefits to the consumer. They claim that the ecosystem will enhance the total Customer Experience.

Internal co-creation and bringing Customers closer into Value Chain participation, enhances the ability to deliver value to Customers. Donaldson, Ishii and Sheppard (2006:174) argue for the involvement of the Customer as a stakeholder in the development of products – especially a new product. This builds support for the fundamental need to understand Customer needs, and elements that are valued.

The Global Value Chain incorporates multiple Value Chains across organisations – respective suppliers or industry-wide / global value networks. Nord (2005:1) describes the solid wood Value Chain within the Swedish saw milling industry. This is an industry-level Value Chain that incorporates ‘actors’ in the form of the various stakeholders from sawmill, to industrial end-user, to retailer, to builders merchant to end-user. This description incorporates respective ‘independent’ stakeholders who form a holistic industry Value Chain. This differs from the original Porter model that focuses on the Value Chain of a firm.

Gurría (2012) remarked that Global Value Chains have emerged as parts of the Value Chain occur across different countries. This follows the trend of increased international trade and investment – most notably in emerging economies. This impacts the strategic approach of firms as well as the policy environments at government levels. Globalisation has an impact on the Value Chain of an organisation.

The Value Chain supports this technical capability to commercialise products. “In many business strategies, the concept of Value Chain management plays a central role… The Value Chain is composed of activities and a margin, which is achieved by these activities… Porter differentiates between primary and support activities… Primary activities are those which are directed at the physical transformation and handling of the final products which the company delivers to its Customers… Support activities support these primary activities” (Van Wheele, 2005:9).

2.4.3 A HISTORICAL PERSPECTIVE ON THE VALUE CHAIN FRAMEWORK Earlier incarnations for scientific approaches to value creation stem from work by Adam Smith – in 1776 – primarily his work on the scientific division of labour for advantage, as well as by Frederick Taylor’s specification of the scientific management principles. Henry Mintzberg did pioneering work in defining strategy as

a process to determine long-term goals and then acquire and align the resources to reach the goals (Nord, 2005:24).

Michael Porter entered the fray in 1980 with a model on the generic strategies for differentiation. This was followed later by Porter’s Value Chain mechanism for viewing the firm from the strategic activities to create value in product creation, marketing and support (Institute of Management Accountants, 1996:1).

Significant theoretical developments to Value Chain are the emergence of industry- level Value Network, as well as Global Value Chains. The example by Nord (2005) has illustrated this. Wei et al. (2013:244) further extended this by developing models for the Value Stream of the Telecommunications industry as a result of technological advancement and the disintermediation of the traditional Telecommunications business model, which continues.

Xie (2008:71) details two distinct waves of migration of value within the Mobile Telecommunications Industry. Shift one is characterised by emergence of specialist suppliers to the Mobile Telecommunications operators. This slightly changed the structure of the industry by reducing the R&D expense for operators. The second wave of value migration is a greater challenge. This is characterised by the higher cost of network maintenance, coupled with commoditisation of service and a Customer demand for exchange of information and value-added services. These are challenges for the Mobile Telecommunications Industry to deal with – traditional revenues are falling fast and the traditional Value Chain will need to evolve into a Value Stream where such Wave Two suppliers are incorporated into the mesh to deliver on Customer Value.

2.4.4 THE SIGNIFICANCE OF THE VALUE CHAIN The significance of the Value Chain is described by Berndt (2003:3) as enabling the firm to indicate the strategic direction and identify components that can deliver a

competitive advantage. This encourages a focus on the activities that add value and prioritise those activities.

Rolland (2002:18) describes the Value Chain as creating products that act as vehicles for transferring value from producers to consumers. For the Value Chain to be successful, the supply versus demand dynamic needs to balance. Rolland (2002:19) further explains that value is derived from solving Customer problems – for example, Journalism creates value by solving Customers’ information problem. Drawing a parallel from this example, the Mobile Telecommunication industry creates value by solving Customers’ communication and connectivity problem.

The Value Chain is significant because it allows a firm, or an industry to focus on common goals to which they are all connected, and roll out a business strategy for sustainable, market-focused collaboration. (Value Chain Initiative, 2004:1). Additionally, Helm and Jones (2010:580) support co-creation with Customers in order to better solve problems, while at the same time engaging and building lasting relationships with them. “Co-creation also implies that a firm’s internal Value Chain, rather than being its source, is only one part of a larger system in which value is created by managing a virtuous cycle of stakeholder expectations, successful brand delivery, satisfaction and loyalty that combine to generate sustainable and superior industry returns.“ Collaboration can thus occur between Supply Chain partners, with Customers or at an industry level – provided that there is a common goal and value for all stakeholders.

2.4.5 THE VALUE CHAIN AS A DELIVERY MECHANISM FOR CUSTOMER VALUE The Value Chain framework is an abstract that “Describes the full range of activities required to bring a product or service from conception, through the different phases of production” (Mitchell, 2012:465). Value Chain is further described as a combination of primary actors (business functions) that perform functions such as input supply, production and retail, with secondary actors that perform support 27

functions such as transportation, brokerage and service processing. The functions transforming products add both value and costs.

Value Chain builds linkages between input suppliers, production and Customers, and provides a mechanism to coordinate activities in order to keep the Customer happy, further explains Mitchell (2012:465). Value Chains are intangible and provide a framework to observe interactions, analyse how these interaction and handovers link, as well as a mechanism to determine the value and the cost that the activities contribute. Value Chain can allow a firm to manage its competitive position. “A business which wishes to outperform its competitors through production innovation itself through higher quality, will have to perform its Value Chain activities better than the opposition” (Salim, 2012:3).

Acharyulu and Shekhar (2012:92) describe the difference between Supply Chain and Value Chain. Supply Chain is the network combining design planning, producing and delivering services, including process from suppliers’ suppliers to Customers’ Customers. Value Chain is the next step in expanding the Supply Chain to include demand planning, defining of markets, and establishing Customer needs. The Value Chain exists to deliver Customer Value.

Kaczmarek (2011:72) argues for deriving value to the bottom line through Value Analysis of the Supply Chain. Value Analysis is defined as “A process that focuses on function, cost and quality; one that replaces ‘want’ with ‘need’ and encourages objectivity.” Kaczmarek highlights a problematic process of certain Supply Chains that limit the introduction of new products, making it difficult for the Customer to acquire it unless he really values the product. However, Value Analysis asks some questions that lead to efficiency and higher quality, lower-cost products: • What is the need? • What alternatives adequately fill the need? • Which one of the alternatives is most cost effective?

Walker and Scott (2011:42) highlight a case of dairy farmers unwittingly using Value Chain techniques to make strategic operating decisions that bring about cost efficiencies as well as help achieve strategic goals. There is a strong link to business strategy and the understanding to provide value to Customers and owners, ensuring that farmers do not minimise costs, or decrease production in isolation. This may actually lead to delivering less value.

Value Chain analysis is done in the following manner according to Walker and Scott (2011:42): • Identify strategically relevant processes or value activities. • List the resources and assets for each activity. • Assign operating costs and revenues to each activity. • Determine strategic cost drivers that explain the underlying costs of each activity. • Use the information to develop competitive advantage by controlling strategic cost drivers or reorganising the Value Chain and improve the product.

Value Chain analysis allows managers to build linkages between suppliers, operations and Customers. It is a broader analysis than Supply Chain. Value Chain analysis aims to deliver value, while Supply Chain analysis seeks to meet demand, yet contain cost.

Emphasis and buying power are shifting in line with consumer emancipation and their clear understanding of value. Helm and Jones (2010:584) note: “competing for value in the market-place therefore becomes based on the ability to deliver an experience that is superior, but by criteria that Customers themselves determine.” This indicates that firms need to deliver value on the Customer’s terms through having an outward- in perspective.

South African Mobile Telecommunications operators should work to enhance their understanding and maturity of the Value Chain execution in order to deliver relevant value within the highly competitive environment.

2.4.6 EMERGING TRENDS IN THE VALUE CHAIN FRAMEWORK There have not been any significant market changes with regard to Value Chain. It seems that organisations rarely take a Value Chain approach to conducting and managing business. Firms within the South African Mobile Telecommunications Industry focus on the technology vertical – want to roll out LTE, or Fibre to the Business / Home (FTTx). The firms want to be the first to market with new products. Each wants to scream the loudest and throw cheap shots at other operators. This kind of marketplace activity shows an aggressive side of competition, and seems a little distant from management methods based on a framework to provide value and sustainable differentiation through products and service to Customers.

The industry has traditionally piggybacked off the advancing technology as a platform to develop products and services for the market. This method of innovation has been in the form of “gifting”, where the product is developed based on the technology and capability – and possibly due to a market opportunity. What the gift model of innovation does, is take an introspective look at the firm, its resources and capabilities, and develops something it hopes and expects that the market will embrace.

What this model of innovation lacks, is the opportunity to deliver real value to Customers – value that may sit outside of the standard operations of the company, and value that can drastically shape the lives of Customers through being more in tune, more enabling of the Customer’s life.

Rather than focusing on the effectiveness and the efficiency of the Value Chain, the industry should shift focus to how value can be added to the Customer, how life can be simplified for the Customer. The Customer needs to be understood. The necessary resources, core competencies and capabilities need to be built. The necessary and correct leadership and business strategies need to be developed. This is a better, more sustainable and less risky approach – albeit one that pushes the industry towards being indispensable, and to being valuable for the Customer.

2.4.7 THE VALUE CHAIN AND ITS LINKAGE TO CUSTOMER EXPERIENCE There is an Experience impact on the Customer as a result of the design and execution of the Value Chain. The Value Chain exists to deliver value to Customers. This happens at each link of the chain. Value is not limited to monetary value alone, as intangible value is also included (Value Chain Initiative, 2004:15). The way the Value Chain is executed results in an emotional outcome for the Customer – referred to as the Customer Experience.

Bassett (2013:1) links Customer Lifetime Value improvement back to improvement in Customer Experience. This works because the value of a Customer is enhanced when the length of the business relationship is longer. Improving efficiency and the Customer Experience lowers acquisition costs, lowers support costs, and lowers retention costs while increasing loyalty, advocacy and tenure.

Bruce Temkin is a Customer Experience Transformist and one of the world’s leading authorities on Customer Experience improvement. Temkin (2005:3) identified a Customer Experience Value Chain – the “organisational culture and process for consistently delivering superior Customer Experiences.” Importantly, the Customer Experience Value Chain slightly mimics the Generic Value Chain by Michael Porter in that there is a set of “primary-like” activities – the Experience Design processes and a set of “support”-like activities – the customer-centric DNA. Firms can derive more value by adopting the Customer Experience Value Chain.

Figure 2.1: The Customer Experience Value Chain Source: Temkin (2005:4)

Customer Experience has three important benefits – short-term improvement in retained business, improvement in Customer loyalty over the longer term, and creation of competitive differentiation (Kirkby et al., 2003:6). As the Value Chain also seeks to derive competitive differentiation, the disciplines of Customer Experience and Value Chain are linked.

Value Chain is concerned primarily with the high level steps to bring value to Customers. Customer Experience is concerned primarily with the “how” of the Value Chain delivery as to evoke an emotional response within the Customer, thereby bringing long-term loyalty and lifetime value.

2.5 INTRODUCING THE CONCEPT OF CUSTOMER EXPERIENCE Customer Experience is a business issue that has gained prominence in the last decade. It is an approach, and an outcome to create loyalty within Customers so that the likelihood of future purchases can be enhanced. Every interaction that a Customer has with a firm generates a thought or emotion. Customer Experience is the consolidated feeling that an individual Customer has towards a company.

2.5.1 DEFINITIONS OF THE CONCEPT “CUSTOMER EXPERIENCE” The following are published definitions or explanations of Customer Experience.

Table 2.2: Definitions and explanations of Customer Experience DEFINITION SOURCE Customer Experience improvement should be an enterprise-wide Malviya and initiative closely aligned to a service provider’s business goals... Varma (2012:4) Many CSPs struggle with developing a common organisation-wide definition of Customer Experience, which is the first step towards undertaking a Customer Experience improvement program. In the absence of an organisation-wide definition of Customer Experience, different departments in a telecom organisation, such as marketing, network and Customer service, often create their own definitions based on a blinkered view of organisational goals. This leads to a lopsided treatment of Customer Experience improvement initiatives. The Customer Experience is by its very nature a personal one that Gilstrap includes the many ways people communicate with the world (2011:74) around them. Managing this experience includes how the operators handle the services Value Chain – from finding a service to using it and at the end, paying for it. Having a Customer Experience management framework and its adherent Customer life cycle helps operators to better understand and meet user needs at each Customer touchpoint. Customer Experience improvement results in higher Customer Capgemini satisfaction and ultimately a higher NPS and Customer loyalty, Consulting leading to top and bottom line financial benefits. (2011:1) Experience is likely to arise across channels, the cumulative effect Maklan and of numerous encounters rather than being driven by a single Klaus episode… Experience is far broader and less bordered than the (2011:777) concept of product or service quality. Consumption experiences have become increasingly important for Chang and Customers and are considered as offerings, which can be created Horng or customized to fulfil Customers’ individual needs… Experience is (2010:2401) the ‘take-away’ impression or perception created during the process of learning about acquiring, using, maintaining, and (sometimes) disposing of a product or service. Practitioners have become increasingly aware of the need to Lywood, Stone create value for their Customers in the form of experience, and and Ekinci creating superior Customer Experience has become a strategic (2009:208) necessity for firms to survive in competitive business environments… Customers’ experiences result from the

DEFINITION SOURCE interaction with a company or use of the company’s product or service… One dimension is the level of Customer participation (from passive to active) and the other is the level of connection (or depth of relationship) between the Customer and the performance. Exceptional Customer Experience creates, on average, a 5% Ojiako and increase in Customer loyalty… the physical perception or Maguire knowledge Customers and users of business services can gain (2009:181) from an interaction with product and service. It is about creating a consistent and personalized WOW! factor. In this scenario, any organisational objective becomes a secondary driver in terms of determining how the organisation responds to the Customer. It is critical to understand where the experience is enhancing or Hollyoake destroying value (in the mind of the Customer), and what (2009:133) Customers remember after the experience… Customer Experience is actually influenced by and through the expectations the organisation creates for its brand, service and products. The experience the organisation then delivers will be evaluated by the consumer to determine how closely it matched the expectation. It starts with the Customers and their emotions and behaviours Drotskie when interacting with an organisation… Customer Experience (2009:118) incorporates service quality and Customer service. Customer Experience and service have moved from a “nice to Kalyanaram and have” category to a “strategic asset.” Firms are now developing Gurumurthy operating models to use Customer Experience as a true (2008:1) differentiator… This development of a new “dimension” of total and integrated Customer care, experience, and service for value creation and delivery has been a true corner stone of several corporate turnaround stories. The total Customer Experience is integrative of all the processes, and it should not be piece-meal.

Generally, research, practice and discussion on Customer Experience thus far have been limited by two aspects. One, the attention has been more on some narrower measure (e.g. brand loyalty, market share) of Customer satisfaction than on total Customer care and experience. Two, the research and practice have focused on individual activities / events (e.g. post-sales or product performance), rather than on the total and integrated Customer Experience… Customer Experience is a function of parameters that goes beyond direct experience from the core product…. Customer Experience is impacted by all customer- contact / touchpoints from pre-sales process to post-sales service and support… Customer Experience needs to be managed and enhanced across the entire delivery Value Chain. 34

DEFINITION SOURCE A Customer Experience is an interaction between an organisation Shaw (2008:4) and a Customer. It is a blend of an organisation’s physical performance, the senses stimulated and emotions evoked, each intuitively measured against Customer Expectations across all moments of contact. Customer Experience encompasses every aspect of a company’s Meyer and offering – the quality of Customer care, of course, but also Schwager advertising, packaging, product and service features, ease of use, (2007:118) and reliability… Customer Experience is the internal and subjective response Customers have to any direct or indirect contact with a company. Direct contact generally occurs in the course of purchase, use, and service and is usually initiated by the Customer. Indirect contact most often involves unplanned encounters with representations of a company’s products, services, or brands and takes the form of word-of-mouth recommendations or criticisms, advertising, news reports and re- views. The Customer Experience is the delivery of the brand promise. It Kirkby et al., happens at touchpoints – the intersection of the Customer and the (2003:5) enterprise… The Customer’s experience is filtered through the Customer’s expectations of the enterprise, which is determined by the publicized Customer Value proposition and feedback from other Customers.

2.5.2 GENERIC ELEMENTS OF THE CONCEPT “CUSTOMER EXPERIENCE” Customer Experience, as a discipline, has evolved through permutations of maturity. Drotskie (2009:93) describes the evolution from Service Quality in the 1980s, to Customer Service in the 1990s, to Customer Experience (CEM) from 1999 onwards. Service Quality is a marketing concept for services that combines characteristics of the services with quality and marketing during the Customer consumption process. At the time, companies viewed quality of service as a competitive differentiator.

Meyer and Schwager (2007:120) tabulate the difference between Customer Relationship Management (CRM) and CEM. CRM captures transactions, with lagging

relevance to future performance. CEM captures what Customers feel at touchpoints and determines that it is more proactive to identify gaps, and improve experience.

Customer Service is seen as the service that a company provides in support of its core products (Drotskie, 2009:117). Customer Service shifted focus from internal product or service quality to external Customers. Meyer and Schwager (2007:118) agree on the quality of Customer care, and include every aspect of the company’s offering as contributing to Customer Experience.

Customer Experience, as per Drotskie (2009:118), is about the Customer and their emotions and behaviour in their interactions with an organisation. It is delivered across distribution channels or touchpoints, and strives to create an emotional connection by Customers to the provider’s brand. Meyer and Schwager (2007:118) call it the internal, subjective response within Customers that interact with a brand – direct (Customer initiated) or indirect through other exposure.

The Customer Experience, described through the way a Customer interacts with a company, has a decipherable life cycle. Experience is the perception that a Customer has when interacting with a company to obtain and consume goods and / or services. “Experience is the ‘take-away’ impression or perception created during the process of learning about acquiring, using, maintaining, and (sometimes) disposing of a product or service” (Chang & Horng, 2010:2401). Meyer and Schwager (2007:119) state that a Customer’s experience begins long before the first use of a product.

Examples of the life cycle of the Customer’s interaction with a provider, have been documented by KPMG International and Avaya International as follows:

Shop for products Get started / and oﬀers Purchase acvate Use

Customer care / Recharge top-up support Migrate / churn

Figure 2:2: The full Customer Journey (Telecommunications) Source: KPMG International (2013:4) 36

Figure 2.3: The Customer Experience Journey Source: Shockley (2013:16)

Customer Experience is a personal and emotional response that Customers have after a series of planned or unplanned interactions with a brand or its products. It is important to understand Customers’ evaluation of the experience, state Chang and Horng (2010:2401). Drotskie (2009:132) states that experience should be enhanced over time and stay in the Customer’s memory.

Customer Experience is delivered across channels and is less bordered / defined than products or service quality. There are dimensions of Customer experience that include physical surroundings, service provider interaction, other Customers’ feedback, and the Customers themselves (Chang & Horng, 2010:2401).

Customer Experience is a strategic tool to create Customer loyalty and thereby, create financial benefits for the organisation (Lax, 2012:26). Customer Experience has evolved into a strategic asset with supporting, holistic business model designs that impact and deliver value across the entire Value Chain. Chang and Horng (2010:2401) state that consumption experiences are increasingly important to

Customers – these meet Customers’ individual needs. Firms can use these for differentiation and competitive advantage.

Customer Experience improvement programmes should span the entire organisation to eliminate silos and enhance success. Drotskie (2009:124) alludes to Customer Experience that is “Total” in its criss-crossing of distribution channels and interaction points.

Exceptional Customer Experience can be quantified and measured in terms of the Customer’s emotions, behaviours, loyalty and profitability. Meyer and Schwager (2007:118) explain that companies measure Customer satisfaction – a collection of Customer Experiences. This, however, does build understanding of how to achieve Customer satisfaction.

Customers attach meaning to the experience of their consumption of products. Firms are increasingly aware of the need to create a deeper level of connection with Customers. According to Chang and Horng (2010:2403), sensory and emotional aspects of experience outweigh the physical characteristics of a product.

The Customer evaluates Customer Experience by comparing the expectation of service to the reality of the service received. Meyer and Schwager (2007:120) explain that this creates a gap between Customer delight and something less. Managing all the aspects of Customer Experience appropriately can assist to reduce the chasm between Customer expectations and Customer perception. The perception is resultant from the Customer Experience delivered – the “service quality gap.”

Drotskie (2009:125) details the following aspects as important, and comprising the Customer Experience: • Strategy – a set of objectives that create a unified vision of Customer Experience. • Culture – values and a way of doing things that lead to delivery of a high level of service to Customers.

• Customer expectations – the level of service and accompanying emotions that Customers expect when dealing with a provider. • Processes – the actions and tasks that take place in order to deliver to a Customer. • Channel approach – the ‘place’ where Customers can obtain service benefits. • Marketing and brand – the clues that an organisation sends to Customers as well as the attitude that prevails. • Systems – Information Technology that integrates the Value Chain to align production with Customer orders and needs and creates efficiency. • People – personnel perform actions to interact with Customers and provide service. The above elements are deemed important for management in the delivery of a Total Customer Experience.

Kaleka (2011:42) supports service quality by expanding on logistics service quality in order fulfilment and physical distribution. These elements play a role in adding value to the Customer perception. Process optimisation efforts utilise numerical measures to assess performance and improvement of logistical processes factually. Graeml and Peinado (2011:9) state that logistics has few tools to measure logistics process performance. Nevertheless, a tool should be used to measure and internalise performance improvements.

Janiszewski (2010:5) argues for differentiation in consumer experience as a source of competitive advantage. This needs to be researched in order to extend theory within the discipline, as well as develop insights into Customer behaviour. Chakravorti (2011:123) reports that 85% of senior business managers see Customer Experience management as the next battleground for sustainable competitive advantage, and references Frederick Reicheld from the 2006 book entitled ‘The Ultimate Question. Driving Good Profits and True Growth’, stating that extraordinary positive experiences create a 5% increase in Customer loyalty.

Steve Ballmer, former CEO of Microsoft quoted in 2008: “In the competition between PCs and Macs, we outsell Apple thirty to one. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience.” This is recognition of the Customer’s preference for value on their terms. How firms respond to this is an outcome of strategic Value Chain analysis.

A report by Dibeehi (2009:1) entitled Customer Experience friendly process explains the roots of process design in making operations more efficient. While efficiency is branded as being good for the Customer, it is very often a cost-cutting exercise. It occurs that Customers do ultimately benefit as a result of streamlined processes. As firms understand that Customer Experience is the next competitive battle ground, the understanding will also come that half of Customer Experience is emotional, and that process design only deals with the rational side of interactions.

Colin Shaw is recognised as one of the top 150 LinkedIn business influencers in the world (Beyond Philosophy, 2012), and is an international author of four Customer Experience books. Shaw blogged that in research of over 40 telecoms companies globally, nobody stood out for delivering a good Customer Experience. This is because Telecoms companies are inherently inward focused. This does not support values that claim to ‘put the Customer first.’ “Cost cutting, internal politics, profits and the need for positive analyst briefing always outweighed the Customer. Senior managers said they were interested in the Customer but their actions showed they weren’t” (Shaw, 2012). This attitude spills over into all aspects of operations, as well as employee behaviour.

2.5.3 THE EVOLUTION OF CUSTOMER EXPERIENCE Customer Experience is the contemporary marketing practice focus. Over the last 25 years, focus has shifted from creating product brands, to service marketing for Customer relationships, and now to creating compelling Customer Experiences

(Maklan & Klaus, 2011:771). Previous marketing practice methods are not enough to remain competitive and Customer Experience should be seen as an important strategic objective.

Maklan and Klaus (2011:785) described an evolution in marketing focus that moved from product, to service, to experience. Experience is complex because it is broader and less bounded than service and quality measures. Customer Experience has now become, and should be seen by managers as an important strategic objective. South African mobile operators have responded in this way – as reflected in strategy frameworks and vision statements: • Cell C: “The possibilities provider that really puts the Customer at the centre of everything that we do… we are making a tremendous effort to positively transform the lifestyle and livelihood of our Customers.” (Cell C, n.d.). • MTN: “Vision – To lead the delivery of a bold, new digital world to our Customers” and “Mission – To make our Customers’ lives a whole lot brighter.” (MTN, n.d.). • Vodacom: “Our vision – To make every Customer smile” and “Our purpose – Connecting YOU, creating possibilities, changing lives” and “Our strategy – Doing more to improve the Customer Experience.” (Vodacom, n.d.).

Customer Experience has seen two types of evolutions in maturity – the science of the Customer Experience discipline, as well as the maturity of organisations in their view thereof. Drotskie (2009:8) describes the evolution of Customer Experience between the 1980s where Quality was the differentiator to the 1990s where Brand was a differentiator to the current Customer Experience as the differentiator. This is the evolution in the scientific discipline. Shaw and Dobrev (2012:7) document the path of organisational maturity as: • Naïve – Initial support for Customer Experience. Usually verbal, as a result of Customer attrition or complaints. There could also be resistance to change, as well as financial constraints.

• Transactional – Initial investment of a pilot or a small Customer Experience team and collection of metrics. Involvement in product development and a say in what kind of people get hired, characterise this stage. • Enlightened – A Chief Officer with cross-functional oversight over operations and a significant voice in the organisation’s culture. At this stage, Customer Experience fulfils a unified and strategic mandate across the organisation. • Natural – Customer Experience DNA is embedded and the role of a dedicated department is not required. Customers are put before short-term profits.

2.5.4 CUSTOMER EXPERIENCE TOUCHPOINTS Customer Experience is delivered across touchpoints. For Mobile Telecommunications, the main touchpoints are network quality, retail, contact centres and online. KPMG International (2013:8) specifies components and best practice for good Customer Experience across touchpoints (Network quality is excluded here).

Retail components are consistency, concierge and queuing tokens, personalisation, soft skills and sales knowledge, as well as closure. Online components are simplification and optimisation, online chat, real-time rating, cross sell / up-sell, as well as transparency. Contact centre components are simplification and optimisation, setting expectations and follow-up, 24/7 service and adequate language options, first-call resolution, as well as knowing and valuing the Customer. Product components include simplicity, stock levels, packaging, loyalty and services.

According to Forrester Consulting in Keightley and Lai (2013:71), delivering the right Customer experience is difficult to achieve with few organisations delivering it well. However, it delivers good returns for business. Richard English, also in Keightley and Lai (2013:79), promotes the concept of managing organisations’ capabilities as the maturity of an organisation evolves to the delivery of Customer Experience. Specifically, English notes four categories of capability – business process alignment, talent management, Customer interaction and care infrastructure.

Evolving Customer preferences for service across touchpoints also blurs the traditional segmentation lines. The emergence of multichannel, or omnichannel service, coupled with self-service delivers organisational benefits such as increased sales, increased productivity and reduced costs. Customer benefits include satisfaction, mixing self-service with queuing, providing choice, better first-call resolution and differentiation in personalised service, writes David Butler in Keightley and Lai (2013:113).

2.5.5 THE SIGNIFICANCE OF CUSTOMER EXPERIENCE Customer Experience is subjective and emotional – which is why it is a driver of loyalty. Service providers should endeavour to perform, and exceed the expectation of the Customers. The best way to earn and keep loyalty, according to Lax (2012:25), is to exceed the Customers’ expectation through a unique value proposition and supporting business models and channel strategies. A generic / cookie-cutter approach will not bring loyalty.

Customers tend towards doing business with operators who provide what they value. Value lies in the tangible product that is delivered by the Value Chain, and value lies in the delivery of a Customer Experience that is delivered through process design. “In the experience economy, businesses strive to achieve a high degree of product differentiation and mass customisation. The resulting transactions are viewed as theatrical spectacles, aiming to provide Customers with unique experiences” (Kociatkiewicz & Kostera, 2012: 474).

Ojiako and Maguire (2009:179) specify that strategies that brought success are not enough to maintain it, and that it is important for a company to develop key competencies to rethink its business philosophy and ensure its future survival. Customer Experience is a business strategy, and it plays a role in defining the environment in which an organisation prioritises for its future survival. “Competitive strategies create value through the enhancement of Customer Experiences” (Ojiako & Maguire, 2009:179).

Chang and Horng (2010:2402) state that consumption experiences have increased in importance for Customers. Brands like Starbucks have adapted offerings that are customised to individual needs. This means that Starbucks does not sell coffee, but a personalised consumption experience that is meaningful to the Customer. The core product may not be the most important element any longer – the sensation and fulfilment of the Customers’ inner sensation is.

Lywood et al. (2009:208) define Customer Experience as a result of interactions along the dimensions of levels of Customer participation and connection. Customer Experience is personal, emotive and subjective, and it is a key driver of loyalty and profitability. It has been shown that companies that focus on Customer Experience are more profitable than those who do not. Hollyoake (2009:133) states that it is critical to understand where the experience creates or destroys value for the Customer.

Total Customer Experience is captured in its three essential interactive elements as described by Mascarenhas, Kesavan and Bernacchi (2006:1) as physical moments, emotional involvement moments and Value Chain moments. Physical elements are typified by physical and transactional attributes. Examples include product, brand, availability, support service and media. Emotional cues are elicited during the execution of transaction and classify what customers feel, such as commitment, prestige, excitement, surprise and perception of resolution. Value elements are the underlying goals that consumers have, and expect to be satisfied. Value of goals such as the right motivation, right advice, right product or right solution can be measured by subtracting the cost of the consumer’s relationship from the perception of value obtained.

Considering the above, it is important for an organisation to design, and then implement and deliver the appropriate Customer Experience because Customers will pay for the experience that they value. There exists a danger that a good experience

is not valued because a competitor with a lesser Customer Experience undercuts it on price, yet fulfils the Customer’s need.

Customer Experience management creates the ability for companies to build on CRM capabilities, and is an integrated way to foster sustainable loyalty (Drotskie, 2009:134). While CRM brings the ability to track and analyse interactions and transactions, CEM captures subjective perceptions through Customer responses (Meyer & Schwager, 2007:121). Pine and Gilmore (1998:97) state that Customers desire experiences more, and organisations are designing them.

Shaw and Dobrev (2012:4) posit that 92% of Telecom executives view Customer Experience as an important strategic objective, yet rate themselves as very low in execution. Furthermore, they share that the Telecommunications industry is the worst industry in Customer Experience delivery, followed by Banking.

KPMG International (2013:6) postulates that Telecommunication operators are striving to create the optimal Customer Experience across the Customer life cycle, so that the Customer feels positive about the engagement. This could lead to better loyalty, higher spending and purchasing of additional products.

2.5.6 DIFFERENT APPROACHES OF CUSTOMER EXPERIENCE Customer Experience needs to be designed and measured. Pine and Gilmore (1998:102) state that Customer Experiences need to be designed and could be made memorable by theming, or engaging all the senses. Meyer and Schwager (2007:123) have a framework for measuring Customer Experience patterns in the past, present and potential. Past patterns capture sentiment from recent experiences through short surveys. Present patterns aim to identify future opportunities through periodic deep and moderated studies. Potential patterns are special, purpose-driven studies to test future opportunities or unpack specific problems with experience.

Shaw and Dobrev (2012:12) show success by Maersk Line where regions scored 10% uplift in NPS through a Customer Experience Council programme. This forum is 45

chaired by the leader of the CEM team and brings together all departments that impact the Customer Experience to work as a team, understand dependencies and gaps or overlaps, and ensure that everyone is creating the desired experience.

Customer Experience is designed through a process of Journey Mapping. Rawson et al. (2013:92) detail research showing that Customers are rarely unhappy with an isolated experience with a provider at a specific point of interaction, or touchpoint. The approach to improve overall experience is by managing different interactions across multiple touchpoints and multiple channels over time – a Customer journey- led approach to crafting the Customer Experience. An example given is to design the full Customer on-boarding process that encompasses multiple interactions and multiple touchpoints. A white paper by Adobe Customer Experience Management Solutions (2011) states, “A consumer purchase is often the result of a complex journey of many touchpoints. As consumers move from search engines to social media to call centres, their shopping journey blends many experiences.”

Temkin (2008) described the organisational perspective of embarking on a journey to improve the Customer Experience. The report described senior leader attitudes, as well as states of organisational readiness maturity towards implementation and integration of Customer Experience outcomes. It is unclear when the definition of Customer Journey evolved towards a more customer-focused definition, whereby it refers to the high-level steps that a Customer goes through in order to achieve a particular outcome.

Norton and Pine (2012:1) define Customer Journey as “the sequence of events – whether designed or not – that Customers go through to learn about, purchase, and interact with your offering.” Importantly, this definition concurs with others on the definition of the Customer Journey, however adds the perspective of the design of the Customer Experience across the life cycle of the Customer’s interaction. Additionally, Norton and Pine (2012:1) argue that enhancement of the Customer

Experience requires a strategic plan that defines what needs to be done to deliver value to Customers, sustainable profitability, as well as competitive differentiation.

Kirkby et al. (2003:5) state that Customer Experience management consists of strategic design and continuous improvement. Norton and Pine (2012:2) highlight the relevance of Customer Journey design in helping companies innovate, allocate resources and transition business to provide economic value to Customers. This could include experiences that engage Customers in a very personal and engaging way. Temkin (2005:3) details the Customer Experience Value Chain with two components – customer-centric DNA and the experience design process. The following steps perform the design: • Understand what Customers value. Perform research about their experience, wants and needs. • Design the Customer Experience in storyboard form. Do this for each segment and include the design in the future value proposition. • Perform touchpoint analysis and Customer life cycle process mapping. Overlay this with the storyboard to identify “moments of truth” where the experience makes the most significant emotional impact to Customers. • Perform a gap analysis between the ideal and current experience from a Customer and employee perspective. Devise and implement a plan to deliver the ideal experience through recruitment, training, process improvements, as well as emphasis on, and realignment to brand values. • Build feedback and actionable insight systems that measure the appropriate Customer Experience metrics for Customers and employees.

An approach to Customer Journey design is shared by Quality Improvement Agency for Lifelong Learning (2007:2) involving these steps from the Customer’s perspective: 1. Identify the ‘moments of truth’ – the points of interaction between the Customer and the business. 2. Identify the ‘hotspots’ – opportunities where a permanent impression can be made in the eye of the Customer. 47

3. Map out the journey steps – the high level, grouped processes for the Customer. Tie the critical “make or break” hotspots to the journey steps. 4. Define the ideal actions and experience that the Customer should have. 5. Identify and implement actions such as training, process improvement and communication in order to improve the Customers’ experience.

Managing Customer Experience through the full Customer journey of interaction with a provider is important for Customer Service delivery, as well as for improving Customer profitability states Shockley (2013:18) in his article “What is Customer Experience and Why is it Important?” The steps to improve Customer Experience that may include what is specified by Forrester Consulting (2013:74) comprise the following: • Compile or enhance the Customer Experience strategy. • Identify and enhance the customer-facing processes so that there is consistency and effectiveness across channels and touchpoints. • Choose and implement suitable, enabling technology to execute / deliver on requirements. • Address the people and culture components that impact Customer Experience delivery – including measurement and rewards.

The Customer Journey can be captured in a Customer Journey map design (Davey, 2014). Different Customer Journey map design templates have been used that express the ideal Customer Experience by organisations. Importantly, the design must reflect the spirit, strategy and steps that Customers must go through for the ideal Customer Experience (Touchpoint Dashboard, n.d.). Optionally, the internal steps, processes and enabling capabilities may be specified for the various touchpoints and channels of interaction. Good Customer Journey map designs show the emotional experience level of the Customer throughout the design.

Figure 2.4 and Figure 2.5 are examples of Customer Journey map designs by Quality Improvement Agency for Lifelong Learning (2007) and Service Design Tools (n.d.) 48

respectively. These Customer Journey map design templates reflect the components as defined by Quality Improvement Agency for Lifelong Learning (2007:2) to identify the moments of truth, specify the hotspots, define the journey steps, and define the actions and experience that the Customer should have:

Figure 2.4: Customer Journey map 1 Source: Quality Improvement Agency for Lifelong Learning (2007:5)

Figure 2.5: Customer Journey map 2 Source: Service Design Tools (n.d.) 49

KPMG International (2013:3) shows three prevalent investment areas for Telecommunications Customer Experience: • Single custodian of the Customer and the customer-centric culture. • Implementation of ‘closed loop’ initiatives to gather Customer feedback and measure advocacy cross touchpoints. • Using analytics to identify root causes of poor Customer Experiences.

Rich (2012:5) notes the characteristics of products and processes that drive Customer Experience as productivity enhancement, simplicity, convenience, risk, cool factor, green factor and respective potential for improving Customer Experience across the Customer life cycle.

2.5.7 EMERGING TRENDS IN CUSTOMER EXPERIENCE The discipline of Customer Experience has made advancements since 2010. There have been a few scientific advancements, and the large-scale adoption of strategic initiatives by South African companies – in recognition of Customer Experience as a sustainable differentiator.

During the interview / data gathering process, very little mention was made of Net Promoter Score (NPS) as a methodology to measure Customer Experience. Now, NPS is measured regularly within South African Industries (Cook, 2013), including the Telecommunications industry. A whole new industry of management consulting seems to be evolving with conferences, consulting services and intra-industry benchmarking to index and publicise the winners and losers in Customer Experience delivery.

When monitoring and analysing Customer verbatim, there is an ever increasing awareness of a lack of Customer Service. What Customers see and feel when interacting with a brand is the level of Customer Service. It remains to be seen when the scale will tip, and when there will be wholesale demand for better Customer Service, and for overall Customer Experience.

NPS as a methodology brings and requires some significant business changes. The NPS scale is skewed towards poor performance, so it requires quite an effort to score positive ratings. Additionally, supporting initiatives such as closed-loop feedback and team huddles are also needed.

The NPS survey aims to determine Customer loyalty – seen as the ultimate measure of Customer Experience. Mentz (2011:185) explains the mechanics of NPS whereby Customers are asked the single question: “On a scale of 1 to 10, with 1 meaning least and 10 meaning most, and with 5 as neutral, how likely are you to recommend company X to your friends and family?” If the Customer answers between 1 and 6, this is seen as “detractors” – the Customer is not loyal. Ratings of 7 and 8 are seen as “neutral”. Only the scores of 9 and 10 are “promoters.”

The overall NPS score is calculated as a percentage of the number of promoters, less the number of detractors. NPS survey can be done across touchpoints (Cesconi, n.d.:6) – website, SMS and rating after a telephone call. What is important is that the survey is performed while the experience is still fresh in the mind of the Customer – preferably within 24 to 48 hours after the engagement with the company.

Optionally, the company may decide to contact Customers and find out why they rate as promoters – in order to keep doing that. Similarly, contacting detractors for feedback and taking actions to address the concerns have resulted in visible results, return sales from detractors, and increased revenues. This process is termed Closed- loop feedback (Verint, 2014). The store manager selects a sample of respondents from the previous day’s NPS survey and asks in detail why the rating was given. This feedback is shared with the team and results in process changes, coaching and training interventions where required. Importantly, the Customer is provided with a safe environment to voice his concerns, and is able to see how his feedback results in actions (Markey et al., 2009:44).

A select few companies implement team huddles (Barnes et al., 2012:892), an informal early morning short, energetic and stand-up meeting where the previous day’s NPS results are shared. The team can then debate, discuss and come up with a strategy for that day – in order to keep the NPS stable, or to improve it. This is an opportunity for encouragement, motivation, coaching and learning.

The South African Customer Satisfaction Index (SACSI) published the first general and industry-specific reports (South African Customer Satisfaction Index, 2013). SACSI is a measure of Customer satisfaction and loyalty towards the provisioning of products and services. The model for surveying Customers was developed by Claes Fornel and commercialised through Fornel’s American Customer Service Institute’s and the periodic American Customer Service Index. The aim of the index is to provide insights across the entire Customer Experience.

2.5.8 CUSTOMER EXPERIENCE AS A DIFFERENTIATOR Drotskie (2009:143) argues for Customer Experience as a contemporary strategic differentiator. Previously, in various industries including Mobile Telecommunications, differentiation occurred within product, price, brand and quality. However, these have diminished significance. Pine and Gilmore (1998:105) position the Experience Economy as a “business innovation that will render irrelevant those who relegate themselves to the diminishing world of goods and services.”

Positive emotions are a differentiator because Customers will never forget how you make them feel (Shaw & Dobrev, 2012:17). Organisation can adopt a “fix the basics” approach to eliminate negative emotions, or an “ideal experience” approach to identify the intended positive emotions and design the Customer Experience to deliver that.

Rich (2012:5) identified six areas for Telecommunications operators to differentiate themselves. These are product and service portfolio, marketing and sales, service quality, customer support, billing / charging and cost management as well as brand.

Customer Experience is a strategic, important business discipline that is receiving increasing attention as organisations jostle within the competitive marketplace. For the Mobile Telecommunications Industry, differentiation on price or product is easily copied as commoditisation permeates the industry.

Customer Experience management aims to increase profitability by increasing Customer loyalty. This occurs when the offer meets what the Customer values, and when the emotional reaction to all aspects of interactions is favourable to the Customer.

The aim of a good Customer Experience is to bring loyalty. The available levers for Telecommunications operators to achieve this outcome vary across the Value Chain from the Supply Chain to product innovation, to IT and billing systems to support processes. Lax (2012:25) states that great Customer Experiences solidify Customer relationships, whilst bad ones undermine these relationships. “Despite its importance, however, the Customer Experience is a means, not an end. Too often, companies view (and measure) Customer Experiences in a vacuum… Instead, experiences are to be seen in the larger contexts of Customer loyalty and business objectives.”

So far, the literature review has discussed scientific literature available on the components of the Value Chain framework, as well as on the discipline of Customer Experience. This research study occurs within the Mobile Telecommunications Industry in South Africa. Mobile Telecommunications will now be explored through analysis of available scientific literature.

2.6 INTRODUCING MOBILE TELECOMMUNICATIONS Customer Experience has been identified as an important, strategic business issue within the Mobile Telecommunications Industry. Focus shifts to understanding the industry itself. The Mobile Telecommunications Industry within South Africa serves as the context for the research study.

2.6.1 DEFINITIONS OF MOBILE TELECOMMUNICATIONS Alexander Graham Bell invented the telephone in 1870 and forever extended the ability of people to communicate (Xie, 2008:1). Telecommunications has evolved iteratively and had great impacts on business and people’s lives. This section will introduce and define Telecommunications and Mobile Telecommunications.

Table 2.3: Definitions and explanations of Mobile Telecommunications DEFINITION SOURCE A cell phone receives and sends radio waves. Those radio CTIA The Wireless waves, traveling through spectrum, are used to transmit Association (2013) voice calls and data to your Mobile device anywhere, anytime… Today’s wireless devices are actually miniature computers. Inside your wireless phone, there is a compact speaker, a microphone, a keyboard, a display screen and a powerful circuit board with microprocessors. When connected to a wireless network, this bundle of technologies allows you to make phone calls, access the Internet, engage in social networking and exchange data with other phones and computers around the world. Telecommunication: Any transmission, emission or International reception of signs, signals, writing, images and sounds or Telecommunication intelligence of any nature by wire, radio, optical or other Union (2012:5) electromagnetic systems. Communication was defined as the amount of information Hilbert and López that is effectively received or sent by the user while being (2011:61) transmitted over a considerable distance (outside the local area). This includes those transmissions whose main purpose consists in the overcoming of distances, not the local sharing of information (such as the distribution of copies at a meeting, or communication through private local area networks). Vodacom‘s operations support GSM 2G technology as a Mentz (2011:39) minimum. This technology provides Customers with voice, text messaging and basic data capabilities… GPRS and EDGE enable Mobile devices to send and receive data over a packet-based network, making services such as Internet and e-mail access possible… 3G technology provides a significant increase in data-transfer speed, compared to GPRS and EDGE. The first generation beginning in the early 1980s was Frenzel (2011:28) analog FM radio. The second generation saw the 54

DEFINITION SOURCE development of the first digital cell phone standards that helped expand subscriber capacity in the same channels. The most important 2G standards that emerged were the Global System for Mobile Communications (GSM) and the first CDMA systems. The third generation (3G) brought more CDMA developments like UMTS. ICT systems do not represent a single technology, but are Hilbert, López and the result of a combination of symbiotic technological Vásquez (2010:160) trajectories that converge into one larger technological system. Telecommunication is the communication of information International over a distance and the term is commonly used to refer to Telecommunication communication using some type of signalling or the Union (2006:2) transmission and reception of electromagnetic energy. Wireless is a term used to describe Telecommunications SearchMobileComputing in which electromagnetic waves (rather than some form of (2006) wire) carry the signal over part or all of the communication path…. More specialized and exotic examples of wireless communications and control include: Global System for Mobile Communication (GSM) – a digital Mobile telephone system used in Europe and other parts of the world; the de facto wireless telephone standard in Europe. General Packet Radio Service (GPRS) – a packet-based wireless communication service that provides continuous connection to the Internet for mobile phone and computer users. Enhanced Data GSM Environment (EDGE) – a faster version of the Global System for Mobile (GSM) wireless service. Universal Mobile Telecommunications System (UMTS) – a broadband, packet-based system offering a consistent set of services to Mobile computer and phone users no matter where they are located in the world… Wireless can be divided into: Fixed wireless – the operation of wireless devices or systems in homes and offices, and in particular, equipment connected to the Internet via specialized modems. Mobile wireless – the use of wireless devices or systems aboard motorized, moving vehicles; examples include the automotive cell phone and PCS (personal communications services.)

DEFINITION SOURCE Portable wireless – the operation of autonomous, battery- powered wireless devices or systems outside the office, home, or vehicle; examples include handheld cell phones and PCS units. IR wireless – the use of devices that convey data via IR (infrared) radiation; employed in certain limited-range communications and control systems.

2.6.2 GENERIC ELEMENTS OF MOBILE TELECOMMUNICATIONS As defined by the International Telecommunication Union (2006:2), Telecommunications refers to communication over a distance. This makes use of technology – analogue or digital signals that transmit information between two points. Alexander Graham Bell is credited with registering the first patent for the telephone in 1876. The components of a Telecommunications system are a transmitter, a transmission medium and a receiver.

Telecommunication is the sending of information over a medium and over a distance – either a fixed connection or a wireless connection. Telecommunications happened before the telephone states International Telecommunication Union (2006:2). A definition by Wireless Telecommunication Services in New Zealand (2013:7) of the wireless Telecommunications market includes cellular, pagers and any other wireless or cellular Telecommunications.

Multiple technologies converge to comprise a Telecommunications system / network. International Telecommunication Union (2006:2) details a matrix of towers, pivoting blades and paddles that form a system to transmit visual signals. As explained by Hilbert et al. (2010:160), ICT systems are a combination of technologies as a system.

Telecommunications technologies have evolved, bringing new capabilities and services that Customers value. Wireless Telecommunication Services in New Zealand (2013:14) state that wireless communication improves communication and social integration in health, education, agriculture and contributions to GDP uplift.

Fixed Telecommunication networks transmit signals over physical mediums, whereas Mobile Telecommunication networks transmit signals over free space. The South African Telecommunications industry consists of two fixed-line Telecommunication operators – Telkom and Neotel, as well as four Mobile Telecommunication operators – Cell C, MTN, Telkom Mobile and Vodacom. With a 99% digital network consisting of infrastructure for fixed, wireless and satellite communications, South Africa has the most developed Telecommunications network in Africa (South Africa Online, n.d.).

The Mobile Communications industry has overtaken the fixed-line communications industry because cellular phones are cheaper to install, are Mobile. This provides a more cost effective and beneficial use for Mobile over Fixed networks. (Lee et al., 2012:468).

2.6.3 THE EVOLUTION OF TELECOMMUNICATIONS The Mobile Telecommunications Industry is dynamic and has evolved. This trend will, and should continue. Drivers of evolution include shifts in market and competitive dynamics, changes in the regulatory environment, the release of newer technology that enables services for Customers. Finally, considerations for efficiency and overall environmental considerations such as “green”, or the management of the “carbon footprint”, influence evolution.

The future considerations for Mobile Telecommunications include: • Green technology for efficiency, cost savings and environmental considerations (Wilkinson, 2010:24). • Evolution to 4G and 5G to become ubiquitous technologies and feed the demand for speed and reliability from data-hungry Customers (Fastest Mobile Networks, 2013:94).

Dergiades and Dasilas (2010:1827) performed an econometric analysis of the Mobile Telecommunications Industry in Greece and provided important insights into the evolution of Telecommunications. Sustainability of financial margins cannot depend

on growth in Customer numbers, and new sources of profitability must be found. Inability to find sources of profitability may result in less investment and a degradation of service quality. A focus on the Customer Experience could provide a suitable solution to this problem.

ICT convergence (Hilbert et al., 2010:160) and open access business models are altering the Telecommunications landscape by allowing flexibility of service provider at the lowest possible cost (Bose, Saha & Minyi, 2012:227).

2.6.4 THE SIGNIFICANCE OF MOBILE TELECOMMUNICATIONS The International Telecommunications Union (2006:1) emphasises the importance of Telecommunications within personal lives and business transactions. Telecommunications enables personal communication, business and financial transactions, thereby playing a vital role in the global economy.

Handler (2005:2004) narrates examples of mobile phones saving lives because people are able to call the National 911 office for emergency assistance from the police, fire department or ambulance. This enables emergency assistance to be mobilised when needed.

Mentz (2011:8) describes the composition of the South African Mobile Telecommunications Industry. Vodacom is the first operator to be licenced in 1993, and has the largest GSM network in the country. Vodacom is part of the Vodafone Group. MTN South Africa began operations soon after Vodacom, and trails Vodacom in market share. Cell C was awarded a licence in 2001 and has the lowest market share of the big three.

Telkom, the incumbent fixed-line network launched a mobile network, 8.ta / Telkom Mobile in October 2010. As specified in Chapter 1, analysis of 8.ta is excluded from the scope of this research study.

2.7 CUSTOMER VALUE IN THE SOUTH AFRICAN MOBILE TELECOMMUNICATIONS INDUSTRY Mobile Telecommunications has played a pivotal role in the lives of Customers. However, there are changes to Customer needs, and this presents some challenges to the industry. Malviya and Varma (2012:3) specify the decline in core revenue streams, the falling perception of value in the mind of Customers as well as rapidly changing Customer preferences as specific challenges.

Malviya and Varma (2012:5) propose a value-driven approach to a Customer Experience improvement approach that is multidimensional across the Value Chain. The framework presented incorporates suggestions to incorporate measureable Customer Value Analysis into Customer Experience improvements in a comprehensive and phased manner.

South Africa has a population of 50,1 million and is a country rich in mineral resources. With a genie coefficient of 0.70, it is one of the most unequal countries in the world (Tolsi, 2012:28). The teledensity of South African mobile telecommunications subscriptions is oversubscribed at 70%, and together with Algeria and Nigeria, the three countries accounted for 50% of the African telecom market (Madichie, 2011:80).

Key players are Vodacom with approximately 56% market share, and MTN with 36% market share (Madichie, 2011:80). These two operators launched in 1994. Vodacom has been the market leader since inception – it was the first Mobile network in Africa, has the greater market share and introduced a number of ‘firsts’, including prepaid billing, community service telephones, a cellular mall and cellular phone towers that were disguised to fit more naturally into the environment (Superbrands, 2010c).

MTN has positioned itself as a major player in emerging markets outside of South Africa. As documented by Superbrands (2010b), this showed itself in the global sponsorship of the 2010 FIFA World Cup in South Africa. At launch, MTN hoped to

grab a portion of the estimated 500 000 Customers on offer in South Africa. After 15 years, MTN has over 100 million Customers across 21 markets.

Cell C began operations in 2001 and differentiated on value for money, simplicity and choice (Superbrands, 2010a). Innovations from the third network operator centred on pricing and affordability with products such as a friends and family discount plan, a R5 recharge voucher and per-second billing for prepaid Customers.

There are two fixed-line operators in the South African Telecommunications industry. Telkom is a former parastatal that was part of the South African Post Office in the early 1900s already (Journey – 1900 to 1990, n.d.). In 1989, a recommendation was made by Wim de Williers to split operations between the Post Office and Telkom, and in 1991, Telkom was founded (Telkom Journey – 1991 to 1999, n.d.). Telkom has played a role in Mobile Telecommunication through two different entities – Vodacom and 8.ta / Telkom Mobile.

The second fixed-line operator, Neotel began operations in 2006 (Flannery, 2010) and defines itself as the first converged communications network operator. Because they are new, Neotel have the advantage of new, IP-based technology and can deliver voice, corporate data and Internet through a single fibre connection. “As a relative newcomer to South Africa’s Telecommunications market, Neotel is unburdened by the outdated legacy technology that characterises older market players” (Flannery, 2010).

Neotel was accused of subtly ignoring the consumer market in favour of the corporate ‘low-hanging fruit’. This was seen as a snub of its mandate to compete against the fixed line monopoly held by Telkom – in order to benefit the consumer. “Neotel’s SNO licence came with a firm mandate to tackle the monopoly of Telkom… profit for the sake of profit has become a rising ethos for corporate SA and Telco companies” (Dingle, 2010:15).

In 1993, Telkom was awarded 50% of the license to operate a Mobile operator. Telkom partnered with Vodafone UK to form Vodacom (Telkom Journey – 1991 to 1999, n.d.), until Telkom unbundled Vodacom in 2009. Vodafone acquired a further 15% while the rest of Vodacom was listed on the JSE. (Telkom Journey – 2000 onwards, n.d.). This allowed Telkom to re-enter the Mobile industry directly. Telkom launched 8.ta in October 2010. This occurred at a time when Mobile penetration was oversubscribed at 126% in 2011 (Telkom SA limited SWOT analysis, 2013:8).

Vodacom is the leading operator in South Africa, and Vodacom was the first network to begin operations (Mentz, 2011:29). Kruger and Mostert (2012:41) indicate that the brand was voted the second favourite brand in the country. The study found that Vodacom Customers had the highest on-going relationship intention at 93%. MTN followed with 68.3% and Cell C with 55.6%. This mirrors the order of market share split between the three established operators.

Mentz (2011:7) reported Vodacom market share at 54.5% with MTN at 31.8%. This leaves approximately 13.7% market share between Cell C and Telkom Mobile. The study found favourable perceptions towards Vodacom over MTN in distribution (outlets), overall performance, adding value to lifestyle, understanding needs, customer service, personality and caring for the environment. MTN leads Vodacom in the areas of being a local / South African brand, prestigious / upmarket brand, warm and caring, as well as sincere / down to earth.

Vodacom continues investments in network investment. Daynes (2013) reported on a first-to-market launch of LTE in South Africa as well as investments in the 3G and voice networks to support higher Customer usage. Competitor networks continue investing in the same ways. The competitive and operating environment is tough and operators need to find ways of differentiation through service quality and experience. Consumer needs are evolving – as can be seen by the uptake in smartphone penetration coupled with data usage growth and voice usage stagnation. Daynes

(2013) reports a 36% increase in data usage per smartphone Customer to 138MB per month.

MTN has adjusted its mission to: “To make our Customers’ lives a whole lot brighter” and aims to better satisfy Customer needs, deliver a differentiated and branded Customer Experience and transform the operating model to bring down costs and efficiencies (O’Hanlon, 2013). The report found that MTN CEO, Sifiso Dabengwa believes that telecom services have become commoditised and that in future, Mobile networks will become enablers for digital lifestyles and business.

The South African Department of Communications recently deregulated the ICT industry. This brings potential liberalisation of services and diverse / converged offerings. MNP and GNP have been introduced. Operators can compete and campaign for the same Customers. The core business of a Mobile Telecommunications operator is to manage a wireless network over which Customers use Mobile services – voice services, messaging services, or data services. Data services enable Mobile Internet and email, Blackberry service, Tablet computing and cloud computing.

Technological advancements enable convergence and the disintermediation of traditional services. The capabilities of data services also enable making voice calls – known as VOIP. Skype, Microsoft Lync, Google Talk and a range of other products are implementations of VOIP. This reality brings both an opportunity and threat for Mobile Telecommunications operators through declining revenues of traditional services and grappling with response to overall market changes.

The South African Mobile Telecommunications market is saturated, but there are still opportunities. Financial services and m-banking comprise such an area (Product focus-mobile phone banking in South Africa, 2006:2).

Competition exists in technology capability – such as Neotel’s ability to offer converged offerings over their modern, IP-based network. “If Neotel has an

advantage to capitalise on – despite entering the market years later than indented – then it must be the ability to offer converged services from day one” (Anderson, 2008:62).

Competition also exits in product offerings in response to market demand. Vodacom reported data traffic growth of 42.5% in 2012 (Hubbard, 2012:28). In 2009, Finweek published an article detailing new offerings from iBurst, WirelessG, Neotel, MTN and Vodacom to compete for Customers (Dingle, 2009:16). Each provider works to equal the price and service offering of competitors in competing for Customers.

Firms can position themselves to compete through business model design and process efficiency / execution. Amonini, McColl-Kennedy, Soutar and Sweeney (2010:32) describe three bases of competition by service-centric firms. Relationship building is the first. This is a people-intensive and requires fluid, interactive processes. Service / product quality and value is the second basis of competition. This is achieved through high customisation, supplementary value-added services and better responsiveness. Brand positioning is the third, albeit a less process- oriented basis. Brand reputation is earned as a result of consistent execution in past relationships.

2.8 SIGNIFICANT EVENTS IN THE MOBILE TELECOMMUNICATIONS INDUSTRY IN SOUTH AFRICA The data gathering process was executed in 2010. The process to analyse and code the research findings started in 2011 and continued in 2013. During this time period, there are some interesting trends that have emerged and evolved in the industry.

Subsequent to the finalisation of the data gathering process in 2010 / 2011, there have been some significant and important developments in the South African Mobile Telecommunications Industry.

The first significant event is the sale of Vodacom shares by Telkom, and the decision to launch their own Mobile network named 8.ta. At the end of March 2013, Telkom announced that there has been a formation of a Telkom Mobile company, and that 8.ta will continue to exist as a subbrand of Telkom Mobile.

It is not clear what the market reaction and expectations were to the initial 8.ta launch. Neither is it clear to the researcher what the projections and performance of 8.ta have been. Nevertheless – for the first few months, 8.ta seemed to launch some innovative and affordable products. In the end, it seems insufficient to lure Customers away (en-masse) from the incumbent mobile operators – Cell C, MTN and Vodacom.

The second significant event was the appointment of Alan Knott-Craig to the position of CEO Cell C in April 2012. Mr Knott-Craig is the founder and former CEO of Vodacom (Stork & Gillwald, 2012:3). Soon after the appointment, the newly appointed COO of Vodacom, Siphon Maseko resigned – most likely in a totally unrelated reason. A few months thereafter, the Vodacom Group CEO, Pieter Uys also resigned (Muller, 2012).

Shameel Joosub, who previously served as Managing Director of Vodacom SA prior to a deployment to Vodafone Spain, succeeded Mr Uys (Mawson, 2014). Undoubtedly, Mr Knott-Craig wants to disrupt the market. In some cases, Cell C was first to reduce prices, or to restructure the product portfolio. This has definitely energised and changed the market. Competitors were forced to respond to, or ignore the lower prices and the overall aggressive approach from Cell C under their new CEO (McLeod, 2012).

The third significant event in the industry is the resignation of the MTN Group CEO, Phutuma Nlheko. Mr Nlheko is widely recognised as a visionary and an astute businessman (Techcentral, 2011). Under his stewardship, MTN adopted a strategy to grow in the emerging (and often risky) markets in the Africa and Middle East regions. This paid off handsomely, with MTN reaching 552 million Customers across 21 markets and growing to R253-billing in market capitalisation (Van der Merwe, 2011). 64

Sifiso Dabengwa succeeded Mr Nhleko as the MTN Group CEO (Techcentral, 2010). Over the last few years, there has been little news of further expansion from MTN, and the company has been in the news for reasons outside of the boardroom – allegations of fraud, corruption and collusion had to be dealt with in South African and American courts (Mochiko, 2013; Nyambura-mwaura, 2013).

The fourth significant event is the appointment of Roy Padiyachee as the Minister of the Telecommunications portfolio. The wider industry responded positively to this announcement. Sadly, Minister Padiyachee was reshuffled to another ministerial portfolio after only a few months and was replaced by Minister Dina Pule, who oversaw a problematic and scandal-ridden period as minister (McLeod, 2014). Over the last few years, a few events have created uncertainty about whether the policy and regulation from the Department are going in the right direction.

There have been delays in allocation of spectrum (Mungadze, 2013). South Africa seems behind with the switch to digital Television broadcasting (Patel, 2013). Yet again, the deadline for local loop unbundling seems like it may be missed (Barker. 2013). For these reasons, market analysts and commentators appear to be pessimistic about Minister Pule’s capability to steer the ship, with some even calling for her removal. What is evident, is that when the Minister of Telecommunications changes, it takes a few months – even years for the market to understand what the new direction is (McLeod, 2014). South African technology industries can ill afford more such uncertainty and delay.

The fifth significant event is the response from Vodacom to the price wars. Mr Joosub seems to be intent to attack – rather than defend. To this effect, Vodacom has participated in the dangerous and unsustainable price war. It is a means to an end – an unavoidable cost of business that is required in order to maintain market share (PC Tech Magazine, 2010).

In the period from 2012 forward, the local market trends seem to be the saturation of the market teledensity, as well as the decline in voice usage and revenue 65

(Mzekandaba, 2012). Data usage is increasing and mobile operators are rolling out fibre networks (BpeSA, n.d.) and consolidation is occurring. This is seen by the Vodacom acquisition of Neotel (Bowman Gilfillan, 2014), the MTN acquisitions of Verizon Business and Afrihost (Serandos, 2014; Roos, 2014), as well as the rumours of MTN interest in Telkom. Finally, there is focus on solutions and services for business sectors including SME, international connectivity for corporates as well as local cloud and fixed-line communications solutions over the fibre networks (Van Zyl, 2014).

2.9 CONCLUSION Chapter 2 evaluated the three pillars of the research study – the Mobile Telecommunications Industry within South Africa, the Value Chain framework and the Customer Experience discipline. Each pillar has been investigated to clarify the definition, history, and implication in the contemporary world. Value Chain and Customer Experience, in particular, have been viewed from various perspectives, including the academic and business perspective.

The discussion on the history of the Mobile Telecommunications Industry has provided insight into the understanding of the explosive industry growth. Saturation and lack of Value Chain differentiation have resulted in questions around sustainability and growth. There is, however, still scope for growth in Mobile Telecommunications – but the approach and skills that are required are unique and evolved in order to satisfy the future of personalised, individualised Customer Value.

Chapter 3 will specify the research approach and framework for undertaking the study. A research study occurs within the boundaries of assumptions and decisions that support the objectives of the study. This includes decisions about the research approach, research design, sampling decision, the data gathering technique, and the limitations on the research.

Chapter 3 will further discuss available options about the research approach and design at the respective levels that define the relationship of the researcher to the world under analysis. Decisions will be documented and defended so that there is an overall, coherent strategy to execute the research and achieve the research objectives.

CHAPTER 3 RESEARCH DESIGN AND METHODOLOGY

3.1 INTRODUCTION Chapter 2 provided the reader with a summary of seminal literature on the concepts of Value Chain, Customer Experience and Telecommunications. These management concepts / philosophies were described historically – indicating the origin, evolution, possible future direction, and resultant impact within the context of the Mobile Telecommunications Industry. The discussion was approached from the academic perspective and contextualised within the contemporary business environment of Mobile Telecommunications within South Africa.

The choice of framing the literature review in this manner, was to provide the reader with a detailed understanding of the concepts under research scrutiny as well as their historical evolution. It also helps frame the research context and arguments.

Chapter 3 will describe the research paradigm, approach, design, and methods that were adopted for this research study. The research objectives are reconfirmed and expanded upon so that the research aim and research question are re-established. This is an important dependency for the research design to adequately fulfil the research objectives and obtain an answer to the research question. The actions, activities and methods employed needed to be suited to the research objective and desired outcome of the study. This could only occur if the appropriate decision- making and planning were executed methodically.

Chapter 3 further discusses research methodology considerations such as research metatheory, or research traditions, and justifies why Interpretivism is more appropriate than Positivism or Critical Theory in enabling the research objectives to be met. Research approaches are summarised next and the qualitative approach / research paradigm is selected and motivated. This supports the aim of understanding 68

social behaviour as an insider through the use of the semi-structured interview technique for data gathering.

The research design decisions define the decisions and actions to sample research subjects as well as the data gathering and data analysis techniques. Various options are summarised and the decision to employ a purposive selection of research participants is explained. This is coupled with the semi-structured data collection method and the Content Analysis technique to classify, group and analyse responses that brought about the research insights.

Chapter 3 discusses the important decisions taken around the entire empirical research process, including the steps taken to observe a high level of research ethics and ensure research trustworthiness. Lastly, the challenges that occurred during the research project are summarised.

3.2 OVERVIEW OF THE RESEARCH PROCESS The steps to execute the research project will take place as follows:

Conduct Compile Select & Conduct & Prepare research literature research Compile invite transcribe objecves quesonaire review methodology interviewees interviews

Draw Document conclusions & Complete & Analyse & code Document discussion of reﬁne interviews ﬁndings recommenda- theory document ons

Figure 3.1: Steps to execute the research project Source: Researcher’s own construct

A detailed description of the steps followed in executing the research project is provided in section 3.14.

3.3 RESEARCH OBJECTIVE Babbie and Mouton (2001:xxi) described social sciences research as the observation of social life for the purposes of establishing and interpreting reverberations. This research project initiative exhibits multiple aims: • Personal aim: to increase personal knowledge. • Scientific aim: to execute an empirically trustworthy research study, thereby contributing ineluctably to scientific knowledge. • Business aim: to make practical recommendations for managers to solve business problems. • Research aim: to answer to the research question within the specified parameters.

Coldwell and Herbst (2004:1) defined research as practical, and finding out things about business matters systematically. Research advances knowledge and understanding, and introduces reliable work methods that managers can use to solve business problems and make sound decisions. Furthermore, Denzin and Lincoln (2005:2) defined qualitative research as “a field of inquiry in its own right. It crosscuts disciplines, fields and subject matters.” The research used this backdrop to satisfy the stated research objectives.

The primary research objective of the study is to: Analyse the understanding of the Value Chain within the South African Mobile Telecommunications Industry against the backdrop of industry changes in order to establish the perception of the degree to which the various areas of the Value Chain contribute to, or affect the Customer Experience.

The research framework engaged Michael Porter’s Value Chain as the point of departure, Customer Experience as the primary focus point, and the Mobile Telecommunications Industry as the context for the execution of the research study.

The research question is: How do, and to what extent, do the activities of the Value Chain affect the Customer Experience in the Mobile Telecommunications Industry in South Africa? 70

The decisions of research metatheory and practical execution were to support the objectives of the study, as described above. Henning, Van Rensburg and Smit (2008:15) encouraged qualitative researchers to reflect on their philosophies in order to ‘justify’ the research. This included making choices for the theoretical framework, research traditions and research approach. These decisions defined the “basic set of beliefs that guide action” (Denzin & Lincoln, 2005:183) and defined the relationship of the researcher to the research world.

The secondary research objectives are: • To analyse the dynamics at play within the South African Mobile Telecommunications Industry. • To obtain an understanding of the perceived interplay between the Value Chain and Customer Experience within the South African Mobile Telecommunications Industry. • To assess the maturity of the South African Mobile Telecommunications Industry in utilising the Value Chain to deliver on overall strategic objectives as well as the desired Customer Experience outcomes.

The secondary objectives exist at a lower level of granularity in defining the components that will obtain an answer to the research question. The secondary objectives will ensure that the research aims, and primary objective of the research are met.

3.4 RESEARCH METATHEORY Research methodology requires upfront methodological decisions about the research. This begins with the research metatheory / approach element, World 3 of the “Three Worlds Framework” research framework.

There are terminological diversions in research methodology. Certain sources referred to the research metatheory as the ‘research paradigm’, whilst others termed it the ‘research tradition.’ In line with the Three Worlds Framework, the terminology coined by Babbie and Mouton (2001:20) was adopted. In their description of a research metatheory, the writers, Miller and Brewer (2003:220) defined it as a “framework of thought that acts as a template or example to be followed.” 71

In order to have an effective and desirable outcome, the metatheory decisions needed to consider the personal and research objectives, so that the most appropriate metatheory tradition could be selected. Babbie and Mouton (2001:20) have indicated the three mainstream traditions – positivism, phenomenology and critical theory, and explained that these traditions are linked to three methodological approaches: quantitative approach, qualitative approach, and participatory action research.

The advantages and applications of the traditions needed to be understood to that the selection could serve the interest of the study appropriately. The difference between qualitative and “better known” (Henning et al., 2008:3) quantitative approach is that the quantitative approach places emphasis on control of instrumentation and repeatability – though strict control of variables. Research subjects do not have freedom to express data that the instruments are unable to capture, whereas qualitative enquiry embraces freedom of expression and the natural development of action. This enables capturing of data for trending, analysis and understanding.

A qualitative research approach exhibits less control of variables, but a richness and flexibility in the nature of the inquiry.

3.4.1 THE POSITIVIST TRADITION Henning et al. (2008:17) defined positivism as seeking and proving the truth by empirical evidence. This approach dictates that knowledge is only about what can be seen and measured scientifically through experience and observation. Knowledge beyond that is deemed impossible, thereby excluding thoughts, feelings and perceptions through using tightly controlled variables, instruments and data. Additionally, all data needs empirical verification.

Objectivity is key for positivistic inquiry. Preconceived notions are disallowed, rendering the researcher as separate from the inquiry – his world is physically separate from the world under inquiry. Knowledge obtained through positivism is

scientific because of a process of sensual verification. “Positivists do not learn from experience… scientific knowledge is held to be both accurate and certain as opposed to opinionated and emotive” (Henning et al., 2008:17).

Positivism requires scientific experimentation and discounts the impact of human understanding, reasoning, or culture on the experiment.

3.4.2 THE INTERPRETIVE TRADITION Babbie and Mouton (2001:28) viewed Interpretivism as human-centric, aiming to understand people as significant beings, as being aware, inquisitive and challenging of their world. This means that the viewpoint of individuals is important and directly relates to the construction and understanding of their world.

Emphasis of Interpretivism is on understanding the meanings that people attach to society and its practices. Babbie and Mouton (2001:28) explained that understanding – rather than explanation – is core, alongside the interpretations of the players within the social context under research scrutiny. Mohlala (2008:53) documented that Interpretivism can “capture the lives of participants in order to understand and to interpret the meaning.” The fundamental thoughts, values, behaviours and interpretations that are not observable, are significant. To capture this, the researcher should get close enough to the subject, to engage with it, and show empathy as an outsider who has the ability to ‘step into the shoes’ of the subject.

This metatheory tradition accepts that a human experiences the world through the lens of his or her own history, perceptions, beliefs and preconceived notions. The analysis should be executed from ‘within’ the situation under evaluation, so that the most empathetic, and impactful results can be elicited. Henning et al. (2008:20) recommended activities such as unstructured observation and open interviewing as methods to gather information.

It was decided that research insights obtained through the qualitative paradigm would best support the research objectives, as the research question aims to unpack the 73

nature of Value Chain activities and the perceived ability to impact the Customer Experience.

The data gathering tools used in qualitative approach allow for natural expression of the research world. This empirical evidence is deemed significant and trustworthy within the research context. Tools such as surveys, observation, artefact analysis and interviews can be used to capture actual events, sentiment and perceptions.

3.4.3 THE CRITICAL THEORY TRADITION The third significant metatheory tradition is Critical Theory. “They take up socio- political issues and research ways in which forms of activism might impact on experience and social relations” (Henning et al., 2008:23). Critical theory is action research – attempts to make radical change to the world driven by a fundamental belief that general solutions exist for real-world problems.

Some viewed critical theory as a middle ground between Positivism and Interpretivism with its most distinguishing attribute being “science becoming an emancipatory and transformative force in society… not only to explain or understand society, but to change it for the better” (Babbie & Mouton, 2001:34).

Babbie and Mouton (2001:34) further explained the difficulty in finding a practical methodological implementation of critical theory outside of action research, collaborative enquiry, or experimental research. Researchers need an involved approach that makes them equal to the research subject, requiring engagement and collaboration in order to derive disruptive research outcomes, yet provide social improvements.

A critical theory approach was seen as unsuitable for achieving the stated research objectives of the study as the Mobile Telecommunications industry is not politically charged, and does not currently need a radical social evolution. This leaves little room for participatory standpoint research.

3.4.4 THE CHOICE OF METATHEORY TRADITION FOR THE RESEARCH STUDY Interpretivism is the choice of the World 3 meta-science tradition for this research study. The aim of the research study is to uncover social meaning. The focus point of this study is Customer Experience – therefore it was fundamental that the inquiry be performed from an empathetic, insider perspective. Interpretivism supported qualitative enquiry, a tradition that was appropriate for the research objective.

Positivism was an inappropriate tradition because it drew a clear aperture between the ‘real world’ and people’s interpretation of the world. Similarly, the transformative nature of critical theory tradition exceeded the research objective – to understand the dynamics of the relationship between the Value Chain and Customer Experience. These characteristics were inhibiters for this research study.

3.5 THE RESEARCH APPROACH World 2 of the “Three Worlds Framework” is that of epistemic interest. It justifies the World 3 methodological choices. The research adopted the term research approach rather than the interchangeable term, research paradigm.

Figure 3.2 illustrates the relationships between the three worlds that comprise the research methodology:

Figure 3.2: The relationship between meta-theories, methodological approaches, and the real world Source: Babbie and Mouton (2001:48)

The World 2 research approach is quantitative, qualitative, or participatory action – each strongly linked to a World 3 research tradition and possessing a set of resultant research outcomes.

Babbie and Mouton (2001:49) advised that the selection of methods should complement the research aim. Interpretivism was selected as the World 3 research tradition. Justification of this tradition showed its support of the research objectives. Focus was on the Qualitative World 2 approach, because of the ‘natural’ fit with Interpretivism and the flexible, free nature of this approach.

3.5.1 QUALITATIVE RESEARCH APPROACH Figure 3.1 linked the qualitative approach to Interpretivism / Phenomenology meta- science tradition. This research approach evaluated human feelings about, and their interpretation of their world. Coldwell and Herbst (2004:13) defined work as qualitative if it cannot be analysed by means of mathematical techniques and 76

instrumentation. This approach was chosen in order to describe the subjective and inductive understanding of the world from the research participants.

According to Henning et al. (2008:5), the qualitative approach is the type of research enquiry where physiognomy is scrutinised for deeper understanding, and actions are documented to satisfy the enquiry: • Observation of a setting. • Inspection of significant items in the participant’s world. • Physical interaction with the participant in his world. • Conversations and interviews to uncover deeper thoughts and interpretations.

Babbie and Mouton (2001:53) explained that qualitative research takes the ‘insider perspective’ – aiming to understand and describe, rather than predict social activity. This suggested a deductive process of the data gathering through the use of techniques such as observation, interviews and documentation analysis.

The analysis emphasised a focus on the data holding the key to research theory, and the researcher became involved with the research subjects and with the world under analysis. Babbie and Mouton (2001:57) agree by citing the Bruyn (1966:1) view that the qualitative paradigm “began essentially as a technique to obtain data that could not be obtained otherwise.” Strauss and Corbin (1990:17) define qualitative research as "any kind of research that produces findings not arrived at by means of statistical procedures or other means of quantification." This could be a broad definition, as participatory action research performed without any statistical quantification, would be considered qualitative.

Interpretivism recognised different realities across the observable facts, thereby allowing for multiple realities to be dispersed through time and place. It helped us improve our comprehension of the whole, by allowing us to explore the richness, depth, and complexity of the observable facts of meaningful life.

3.5.2 JUSTIFICATION OF A QUALITATIVE RESEARCH APPROACH FOR THE STUDY The research aim is to analyse the perceptions of the Value Chain of the South African Mobile Telecommunications Industry, in order to establish the degree to which the activities of the Value Chain affect the Customer Experience. The qualitative approach allowed for the human perceptions about the relationship dynamic to be understood, for the development of an in-depth understanding of human behaviour, emotions and perceptions, as well as establishment of the drivers of behaviour. The approach helped us to gain insights by discovering meanings through the analysis of words and actions, and the meaning of these words and actions.

The qualitative approach will employ data gathering tools that gather empirical evidence, and allow self-expression from the research subjects. These insights are important and relevant in their own right. The most important consideration is the selection of the most appropriate tool to satisfy the research objective.

The researcher would like to prove proficiency in qualitative, empirical research. Coupled with this is the aim to have helped business managers to solve business problems through practical recommendations on business imperatives within the context of the Value Chain and its effect on the Customer Experience. These outcomes were additional determinants of the choice of approach. Human understanding of behaviour and emotions supersedes measurement of behavioural consistency.

3.6 RESEARCH DESIGN Research design referred to the structure of the study before the data collection process commencement. Coldwell and Herbst (2004:36) stated that the research design should answer questions about techniques to gather data, sampling methods, and how time and constraints would be managed.

Henning et al. (2008:31) used different terminology to define research design – referring to genres or methods and methodologies. The decisions about the metascientific tradition, as well as the research approach to support the research objectives needed to be clear. Only then could the research design elements be planned, with the decisions about the structure of the research.

Figure 3.3: The design process: signposting the outcomes Source: Henning et al. (2008:145)

Babbie and Mouton (2001:72) provided a cradle-to-grave explanation of the research process coded as the ProDEC framework. ProDEC stated that the research problem, then the research design, then the research process, then the evidence collected, and finally the research results / findings follow the idea. They contend that the research design is a plan of how the researcher will conduct the research. This plan must detail the tools and methods that will be used to measure, sample, collect evidence, and analyse it all.

3.6.1 TYPES OF RESEARCH DESIGN To support the delivery of the research and its objectives, the appropriate design must be selected. Babbie and Mouton (2001:76) distinguished between empirical and non-empirical studies, and indicated the types of data that may be analysed for the design, as well as typical and popular techniques for gathering the data.

The choices that needed to be made exhibit characteristics for consideration at multiple levels, as depicted in Figure 3.4.

Figure 3.4: A classification of research design types Source: Babbie and Mouton (2001:78)

Coldwell and Herbst (2004:36) shared design type descriptors that contrast observation with interrogation / communication. Next, the design may be exploratory or formalised. The design may be experimental versus ex post facto. It may be descriptive versus casual. The design may be cross-sectional versus longitudinal. It may be a case design versus statistical design. Finally, it may be field research versus laboratory simulation.

Coldwell and Herbst (2004:36) further advise on some criteria for good research design. Research must be experimental / investigational to be accepted as valid. It needs to be implementable and feasible, as well as be flexible for any incompatibilities and new approaches to be included. Finally, the process should be efficient in resources utilisation.

3.6.2 CHOICE AND JUSTIFICATION OF RESEARCH DESIGN The study was empirical, qualitative and analytical analysis of primary data gathered through interviews. Human opinions, reasoning and perceptions were collected and interrogated to arrive at logical conclusions and findings. The choice of the empirical design was to ensure that the data gathered is valid and relevant to the physical research environment and research objectives.

The research was interrogative through engagement with the research subjects, and included questions and collected responses. This provided the opportunity to be simultaneously specific and exploratory. Observation was excluded as a technique to gather primary data.

The research was exploratory and open. Main research themes were defined, however the research subjects were encouraged to freely express views regarding the research themes. This included non-related thoughts. An explanatory enquiry was seen as being able to lead to different insights, and will allow the research outcomes to shape naturally.

Research subjects were challenged on their views where relevant in order to attain a deeper understanding of the stated view, to test its validity, and to fully integrate the view if it were different from the researcher’s own experience as participant in the world under analysis.

The study was cross-sectional and time-bound, to focus on perspectives at a specific point in time. Tracking of perspectives over time was excluded from the research

scope. Any review of the research outcomes would have to be explained by the composition of the research sample, and by timing.

Research subjects were interviewed in their own familiar environment. The aim was to enhance familiarity, eliminate intimidation, and therefore allow the research subjects to express themselves openly. The mood was relaxed and open to facilitate freedom of expression.

It was expected that the research subjects might not be knowledgeable in all aspects of the research inquiry. This is primarily due to their individual role and area of focus or participation in the Value Chain. Potential unconscious ignorance was seen as an important / significant factor for the study, and such an event was captured as a significant research insight.

3.7 SAMPLING Sampling is the activity of selecting participants to become research interviewees in order to gather data. Henning et al. (2008:71) advised selecting participants who are able to shed the most light on the research subject, so the sample must include the most relevant interviewees and notes four approaches to sampling: theoretical, snowball, convenience and purposive sampling.

Coldwell and Herbst (2004:76) highlighted two problems with sampling. Firstly, sampling bias occurs when the researcher’s prejudices unduly influence the sampling process and sampling error, where the research subjects are too similar, prohibiting the inquiry from obtaining a full picture. Secondly, sampling error can occur “because of bad luck” (Coldwell & Herbst, 2004:76) that is usually out of the control of the researcher, and may be hard to predict.

Care was taken to avoid these sampling problems. The research uncovered the truth from the perspective of the research subject. The research did not serve to validate existing, presupposed notions of the researcher. Good planning of the research

sample was coupled with appropriate communication and actions to ensure suitable timing for interviews to meet the research objectives.

Planning included the need to obtain sufficient, relevant and cross-functional representation for the study. The available population for research subjects spanned three Mobile Telecommunications companies.

3.7.1 STAGES IN THE SAMPLING PROCESS The sampling process requires a series of steps and decisions. Zikmund (2003:372) illustrated a framework containing steps that reflect the decisions to determine the sampling process and units.

Stages of the sampling processes are graphically represented as follows:

Figure 3.5: Stages in selection of a sample Source: Zikmund (2003)

3.7.2 TARGET RESEARCH POPULATION AND SAMPLING FRAME The target population constituted all relevant stakeholders of the Mobile Telecommunications Industry in South Africa. Specifically, stakeholders involved in, or impacted by the Value Chain and Customer Experience, were identified.

The sampling framework defined steps to narrow down from the target population. The distinguishing factor was for the relationship between the stakeholder and the industry – each was a Customer, supplier, or employee within the industry.

The choice between a probability and non-probability sample will be discussed later. As the research aimed to select the most appropriate sampling technique to achieve the desired research outcomes, non-probability / convenience sampling was used.

3.7.3 SAMPLING METHOD The two main types of sampling methods are probability and non-probability sampling. Each method contains a set of techniques for sample selection.

3.7.3.1 PROBABILITY SAMPLING Probability sampling involves the selection of a “random sample” (Babbie & Mouton, 2001:166), in an effort to obtain a fully representative cross-section of the population. It details specific techniques for consideration: • Simple random sampling – assigns a number to each potential participant, and then uses a formula to generate a random list. • Systematic sampling – assigns a number to each potential participant and selects every fixed n’th for inclusion. • Stratified sampling – creates clearly defined homogenous groups within the research population, and then draws a random, valid, sufficiently numbered sample from each of these groups. This technique strives for representivity and reduced sampling bias.

3.7.3.2 NON-PROBABILITY SAMPLING Non-probability sampling is used when a random / probability sample is inappropriate, or in cases where a sample of a specific make-up is able to satisfy research objectives adequately. There are techniques, described by Babbie and Mouton (2001:166), which could be considered for non-probability sampling. Available subjects, the research objective due and familiarity of the research subjects with the research topic, influence the choice of technique: • Reliance sampling / convenience sampling – selects cases based on availability, or presence at a specific location at a point in time. • Purposive sampling – uses judgement and knowledge of the researcher about the available population to choose a sample. • Snowball sampling occurs when the research subjects are asked to assist in determining and locating additional research subjects. • Quota sampling – the research population is weighted according to their demographics and / or characteristics to create a sample that is an accurate representation of the overall population. The aim is for a representative, non- probability sample.

3.7.3.3 THE CHOICE AND EXECUTION OF THE SAMPLING TECHNIQUE A combination of purposive and convenience sampling was used for the research study, as this sampling technique is suited to qualitative enquiry for a defined research category. The technique focused on the views of a research sample for in- depth understanding. With the assumption that the sample was correctly selected, documented and justified, then surveyed with appropriate qualitative validity, their insights were analysed to uncover contextual, comprehensive research findings that satisfy the research objectives.

Furthermore, a non-probability research population wherein the purposive / convenience selection was performed, allowed the selection of cases who are 85

stakeholders involved with, or impacted by the Value Chain activities – whilst ensuring that there were mutual trust and sufficient understanding of the research topic. Emphasis was placed on gathering research insights through probing of the perceptions and understanding of the research sample towards the Value Chain and the impact on Customer Experience.

3.8 PARTICIPANT SELECTION The theory defined a very scientific set of techniques and steps to select the research participants. In order to keep the sample size manageable, yet representative, the aim was to target 25 potential research participants. This was to ensure sufficient, valid representation from stakeholders from all areas of the Mobile Telecommunications Value Chain, including Customers across the respective operators.

Research cases were selected from different Mobile Telecommunication operators, across functional business areas, and for the ability to freely discuss their point of view on the research topic. This resulted in a non-probable and statistically un- representative sample. It did, nevertheless, support the research objectives though the ability to obtain data from a cross-sectional and relevant sample of stakeholders.

Representivity and probability were deemed of secondary importance to the social meaning within the research context. Stakeholders for the sample included senior managers, middle managers, team leaders as well as Customers. All of these participants were known to the researcher, and represented the entire Value Chain.

To ensure participants were comfortable, each potential interviewee was formally invited by an e-mail letter of invitation. The invitation contained information on the objective of the research study, the topic of the research, as well as an overview of the planned semi-structured interview process to solicit data. The participants were not required to prepare, or familiarise themselves with the research themes. This was to gather the natural, real-life understanding of the research topics. No preparation

was required, as preparation may have clouded, or influenced the participants’ natural perspective.

The participants were informed that the interview would be recorded, so that it can be transcribed and attached to the research report as evidence. Each participant was provided with a copy of the recording and transcript within four days of the interview. These efforts were put in place to ensure that the participant was comfortable and able to contribute freely. They also served to provide as much transparency and trustworthiness of the data gathering process and the presentation and justification of the research results.

Ultimately, 16 participants were interviewed. This was still an adequate number to execute the research project, as there was sufficient representation from participants across the Value Chain activities. This provided adequate data saturation, negating a need for a larger sample size.

The list of participants interviewed is provided in Annexure C. Pseudonyms are used for participant privacy.

3.9 FIELDWORK AND DATA COLLECTION METHOD Data collection describes the methods that will be used to obtain data for analysis. Coldwell and Herbst (2004:48) tabulated methods that may chosen between, or combined in order to gather the data to satisfy the research objectives: • Questionnaires / surveys – obtain information quickly, unobtrusively, anonymously and easily. • Interviews – gather a deep understanding of perspectives or experiences through in-depth questioning. This technique also forms a bond between the researcher and research subjects. • Documentation review – allows the building of history from pre-existing documentation.

• Observation – gathers a real-world perspective of the actual workings. Focus groups allow the deep exploration of a phenomenon through group discussion. Case studies enable the examination of a phenomenon from a client’s perspective by analysing and comparing across cases.

3.9.1 THE CHOICE AND JUSTIFICATION OF THE DATA COLLECTION METHOD The study used semi-structured interviews to elicit data and viewpoints. A list of pre- drafted questions formed the basis of the interview and ensured that the fundamentals of the research themes were covered. A great deal of flexibility occurred during the interview so that the individual nuances, perceptions and insights were explored in more detail.

Each participant who accepted the invitation was interviewed. The interviews yielded qualitative data that contained insights on feelings, perceptions and behaviour from the participants. Semi-structured interviews suited the study best for supporting the research objectives. The qualitative approach sought to uncover and understand meaning and perceptions behind interpretations.

Techniques such as observation and analysis of written documentation provide facts and process-focused information. This would not have adequately supported the achievement of the research objectives – outside of theoretical background research of the research areas. Observation and analysis of written documentation were excluded from the data gathering process.

Annexure F contains the planned interview questions.

3.10 DATA ANALYSIS The data that was captured through the interviews / data collection process was electronically captured as evidence, and for the purpose of the research analysis. “Data analysis is a process of analysing and making sense of the data that has been

collected” (Mohlala, 2008:68). A methodology was needed in order to execute the data analysis and generate findings. Henning et al. (2008:101) stated that the research should fit the analysis procedures with the methodological design to make meaning of the data.

Coldwell and Herbst (2004:92) covered the steps of the analysis process to incorporate it into the planning and execution. Data must be prepared for translation into an appropriate form for analysis. This “coding” process brings efficiency in the analysis process by formatting and presenting the data in a meaningful and understanding way.

Henning et al. (2008:138) tabulated the data analysis techniques for qualitative research. These techniques uncover meaning from the raw data differently, and therefore yield different research outcomes. The two most suitable techniques for qualitative analysis are: • Content Analysis was pioneered by AR Lindesmith. The content of data is used to make meaning. The technique assumes that the findings reflect the real world in the eye of the research participant through inductive, naïve realism. Data is disassembled, coded, categorised, and reassembled iteratively until meaning is made. • Grounded Theory insists that the theory is grounded in the raw data through links between different categories of data inductively fitting it into patterns. Explanations of how they link together and what the resulting research reality is are drawn out, enabling the construction of substantive theories.

Babbie and Mouton (2004:492) adapted eight steps that constitute the process of conceptual analysis: 1. Decide on the level of analysis. 2. Decide how many concepts to code for. 3. Decide on whether to code for existence of, or frequency of a concept. 4. Decide how to distinguish among concepts.

5. Develop rules for the coding of texts. 6. Decide on what to do with irrelevant information. 7. Coding texts. 8. Analysing results.

The process of data analysis used, followed the above steps.

3.10.1 THE CHOICE OF DATA ANALYSIS TECHNIQUE The qualitative Content Analysis technique was selected for the data analysis phase. The raw data was iteratively coded until the discovery of what is being said by the content of words and sentences, was uncovered. This method required the categorisation of data into themes such as the events, behaviour and perceptions – that is to say, indicators. These themes were then investigated to establish consistencies, trends and inductive meaning.

Overall, this method allowed the data to dictate the theory behind the behaviours and perceptions by examining how the themes and codes are linked. A comprehensive overall view could then be constructed to meet the research objective, and develop an understanding of the collective interviewees’ perception of what the Mobile Telecommunication Value Chain is, and how it impacts the Customer Experience.

To perform the coding, the interview transcripts were scanned and categorised into patterns that broadly define the thinking, feelings, attitudes, and perceptions of the interviewees to form the basis of the theory that the research study will later introduce. The intention was to ensure that the research outcome has the greatest chance to self-define findings, yet satisfy the research objectives and answer the research question.

The Weft QDA qualitative research analysis software program was used to explore, code, and categorise the data, and to combine the data sets across the different dimensions and extract meaning relevant to the aims of the research study. This software is free / open source and easy to use software for the categorisation and 90

analysis of textual data – such as transcribed interviews. Transcripts could be imported, and selected texts from different transcripts could be linked into a unit easily for coding.

The relationships between units were based on a number of different criteria. Theories that supported or opposed the sentiments set out in the research question were grounded in the data. In order to draw meaningful conclusions, the data was probed, dissected, and studied in this case-oriented approach. Meaning and theory were deduced when the themes / indicators were interrogated and juxtaposed to construct a view of Customer Experience of the Mobile Telecommunications Industry Value Chain.

The research report that articulates the insights gathered, was then compiled. The research evidence will be documented in Chapter 4. The research codes are documented in Annexure D.

3.11 IMPORTANT INTERVIEW DECISIONS TO SUPPORT THE RESEARCH There were a few steps and decisions in the approach to the data gathering that were taken to bind the behaviour and approach by the researcher. Firstly, the interviewee should be free and comfortable to participate in the research. Secondly, there should be no barriers to participation. This was achieved by clearly communicating the objectives, process and arrangements for the interview, the recording and transcribing.

The researcher is more than a casual observer, and should be able to see things from the insider perspective by putting himself into the natural environment and into the shoes of the interviewee, as argued by Babbie and Mouton (2001:271). This was achieved by ensuring that the interview contained combinations of closed-ended and open-ended questions, and related open discussion and in-depth probing to fully explore the perspective of the interviewee.

Finally, to understand contextual interest amongst participants, the data gathering positioned each participant individually and created linkages between the participants’ viewpoints. Information was extracted within the specific context of the individual participant, but compared, or juxtaposed with theory, or with the responses of other participants. This was done to ensure a full understanding of the views of all participants throughout the central themes of the research study.

3.12 RESEARCH ETHICS STATEMENT In order to observe a high level of ethics in research, the researcher adopted an approach to ensure the acquisition of valid and accurate empirical research data. Research subjects were invited formally, and were informed that there would be a semi-structured interview that did not require any preparation. Furthermore, the interview was recorded and transcribed. A copy of the transcribed interview was provided to the interviewee within four days. Lastly, all identities of the research subjects have been abstracted to ensure anonymity and privacy.

This approach was modelled on the guidelines for research ethics provided by Denzin and Lincoln (2005:144). Informed consent informs research subjects how, and in what manner, they will be involved, avoiding deception or ambiguity in the design of experiments or inquiry. Secondly, abstraction of identity eliminates unwanted exposure to maintain the privacy and confidentiality of participants. The names of the participants specified in Annexure C are pseudonyms.

3.13 QUALITATIVE RESEARCH TRUSTWORTHINESS Trustworthiness of research is an important aspect to address throughout the execution of the study. To quote LaBanca (2010), “trustworthiness of a qualitative study can be increased by maintaining high credibility and objectivity.” Furthermore, truth-value is measured by credibility through adequate engagement with the areas within the boundaries of the research. Trustworthiness of qualitative data – credibility, dependability, transferability and conformability need to be established (Sinkovics, Penz & Ghauri, 2008:691). 92

Rolfe (2006:309) states that qualitative research cannot be subject to validity considerations and, there should rather be focus on research quality through the writing up of the research report. Subjective appraising and interpretation are left to the reader of the report. This can be interpreted as indicating that it will be hard to define upfront criteria for trustworthiness of results, but that the reader is allowed to make his / her own judgement of the research report.

Furthermore, there exists more than a single paradigm for qualitative research, which presents a challenge to conceptualise specific trustworthiness and validity criteria. “Qualitative methodologies to capture multi-dimensional phenomena… and non- linear, sometimes fuzzy, patterns of our realities” (Sinkovics et al., 2008:690).

As per LaBanca (2010), trustworthiness of interpretations and findings is best obtained through demonstration of the methods utilised during the research. To beat these challenges, all the transcribed interviews are available from the researcher. Reading the transcripts in conjunction with the research methodology and research findings within this report, are the measures taken to provide validity, enhance visibility / transparency of the deductive process of determination of research findings and conclusions, as well as provide the evidence of the data collection process to enable trustworthiness.

3.14 DISCUSSION ON THE RESEARCH PROCESS The steps described next were followed in executing the research process. The research process is a systematic process, however the steps were not followed absolutely sequentially. Rather, the steps were performed systematically and iteratively as required for logically executing and documenting the research:

• Step 1: Prepare the research objectives Following the approval of the Proposal by the University, the first step was to establish clarity and finalisation of the research objectives. This was accomplished by

adapting the research Proposal, discussing the Value Chain, Customer Experience and the Mobile Telecommunications Industry in South Africa.

The research objectives were arrived at by building the research rationale, specifying the problem statement, and deducing the research question. The research objectives stemmed from the research question. These serve as mechanisms to ensure that the research question can be answered.

The theoretical framework, or perspective of the researcher on the nature of the interrelationship between the pillars of the research study – Customer Experience, Value Chain and Mobile Telecommunications were defined and depicted as a Model construct to document as context.

• Step 2: Conduct literature review A thorough understanding of the available scientific information was built by conducting a literature review study. The fundamental, seminal definitions of Value Chain, Customer Experience and Telecommunications were specified before the generic elements of each were discussed.

A view was constructed of the influences, history, significance and emerging trends of the discipline. Academic and peer reviewed journal articles were mainly used. Popular press content was also included to construct a complete and contemporary literature review. The concepts are theoretically integrated to construct the picture of Customer Value.

• Step 3: Compile research methodology The research methodology, approach and design consideration were made in order to support the delivery of the research objectives and answer the research question. The metatheory approaches were consulted and a qualitative approach and supporting research tradition were chosen for their ability to uncover rich meaning of social life.

The research design, sampling process and data collection method were chosen. These elements also followed as logical steps to satisfy the research objectives.

• Step 4: Compile interview questionnaire / schedule Designing the research schedule was a process that was executed with “the end in mind.” In planning the schedule, the research always covered three areas – Mobile Telecommunications, Value Chain and Customer Experience. These were documented. Then objectives for the interviews were defined, and finally, the questions were designed to meet the interview objectives and answer the research question.

• Step 5: Select and invite interviewees The potential interviewees were identified, selected based on the researcher’s knowledge of their role and relationship to the generic Value Chain. Twenty-five potential participants were selected and invited to semi-formal interviews by email. The sampling technique used was convenience and purposive (also known as judgemental). Formal letters of invitation and meeting invitations were sent to the potential participants that explained the process and steps to be followed for data gathering.

• Step 6: Conduct and transcribe interviews Recorded interviews were conducted with each of the participants who accepted the invitations. The research questionnaire was largely followed, but there was space to explore interesting insights around the themes of the research.

Each of the interviews was transcribed verbatim and shared with the interviewee. This was done in order to close the loop with the participant, as well as to create trust and provide an opportunity for the interviewee to highlight any concerns or possible discrepancies. This did not occur.

• Step 7: Analyse and code interviews. A qualitative research software program, Weft QDS was used to assist with the research process. Each interview transcript was uploaded into the software, and then each statement from participants was highlighted and classified logically. This was an iterative process to establish the sentiment of what interviewees were saying. Responses were coded into overall themes, and indicators that roll up into the themes.

• Step 8: Document the findings All of the coded inputs provided by interviewees on the same topic were analysed to establish trends and extract the sentiment shared. In documenting the findings, the interviewee responses were summarised to form a collective perspective documented in one or two paragraphs. Additionally, up to three verbatim quotes were included as evidence to support the summaries.

• Step 9: Document the discussion of theory A discussion on the comparison between the Literature Review and the empirical research findings was performed and documented in Chapter 5. This was done separately for each of the research pillars – Mobile Telecommunications Industry, Value Chain and Customer Experience.

The comparison identified areas of congruence where the similarities between literature and findings were indicated. Differences were also identified between literature and findings. The similarities and divergences were documented before a reflective Insights and Interpretation section was specified.

• Step 10: Draw conclusions and recommendations Satisfying the research objectives was achieved in drawing research conclusions and their implications, and then making recommendations in terms of literature, method and business practice. A principle conclusion of the research is first specified, as well as a principle recommendation.

Chapter 6 further specifies eleven practical recommendations for managers to implement and solve the business challenges as highlighted in the research findings and conclusions.

Chapter 6 concludes the research by introducing an evolved model as an approach for delivery of Customer Value within the Mobile Telecommunications Industry, as well as graphically linking all the elements of the research. This includes the research question, objectives, chapter contents, coded themes from the empirical research, as well as conclusions and recommendations.

• Step 11: Complete and refine the document. Sections of the report – such as the Executive Summary, chapter introductions and summaries, as well as the Table of Contents, were completed last. As versions of the document were updated and completed, these sections were amended to remain in sync with the document contents.

The research process involved multiple rounds of submission and feedback to the University supervisors. Throughout the research process, as well as after the conclusion of the research project, chapters were updated and refined.

3.15 REFLECTIONS The researcher can make the following reflections regarding the process and challenges of executing the research project:

3.15.1 THE CHALLENGE WITH UNDERSTANDING OF THE RESEARCH PROCESS The first challenge was the understanding of the research process. As this was the first research project for the author, a lot of guidance was required from the University supervisors as well as University library staff. Finding the most appropriate approach, information and research information for the process, was all guided.

Besides the gaps in academic and procedural understanding of the research process, there existed a naivety about the discipline and self-motivation that would be required to execute a research-only study and produce a dissertation at Master’s Degree level. Execution momentum within the project varied as the will, and desire to continue with the project ebbed and flowed. Ultimately, the gaps that appeared, were addressed.

3.15.2 THE CHALLENGE WITH STAKEHOLDER APPROVAL OF THE PLANNED RESEARCH There was an evolution of the structure of the research as a result of a request for stakeholder approval. What was initially planned and motivated in the research proposal, was to analyse the Value Chain of a specific Mobile Telecommunications company. Upon requesting approval for this research from the firm, a request was received that the research should not divulge confidential information, and that the name of the firm should not be stated. This necessitated a change in topic, and a change in approach to an ethnographic, industry analysis. This represented a necessary departure from the original research proposal submitted to the University.

3.15.3 THE CHALLENGE TO OBTAIN SUITABLE RESEARCH SUBJECTS The initial identification of the research subjects was easy. Looking back, there was a naive expectation that all of the invited research subjects would willingly participate. Invitees were from different organisations, worked across functional business areas, and across organisational levels of responsibility. Unexpectedly, the reality proved different. Not all the interviewees responded to, or accepted the invitation. Some interviewees postponed sessions. Not all the scheduled interviews occurred and some interviews were interrupted and prematurely ended.

A challenge experienced during the interview process itself was to analyse non- verbal communication. It is said that only 7% of communication consists of actual

words spoken, whereas the 93% remainder consists of tone, pitch and body language. The interview process required so much attention that non-verbal communication was ignored.

All interviews were recorded and transcribed verbatim within four days. Interviewees were provided with the transcribed copy. Strangely, there were no queries, clarifications or comments on the content of the transcriptions by the interviewees. With the passage of time, many of the interviewees have changed jobs or companies.

3.15.4 THE TIME TAKEN TO EXECUTE THE RESEARCH PROJECT The journey has been quite intensive and challenging. Executing a research project is tough and requires perpetual discipline. Real life gets in the way – motivation and discipline falter. Interest wanes, resolve fades and time melts away. Family and work demands escalate, resulting in the constant need to prioritise, focus and dedicate time to the project. When the research project started, the intention was to complete it within two years. That did not occur. It has been four years.

The academic requirement for a Master’s Degree research programme is to prove proficiency in research. Understanding and executing the research process; knowing what the process entails, what the academic requirements are, balancing priorities and displaying the appropriate behaviour, and to see the project move to fruition bring a sense of achievement and pride to the researcher. Despite this knowledge, it has been challenging to implement the required discipline and timeously dedicate the required time to work on the research. Periodically, work occurred in bursts that disturbed the flow and momentum. Restarting again required significant prework and re-orientation for the researcher.

3.15.5 THE CHALLENGE TO SELECT THE EVIDENCE FOR THE RESEARCH REPORT A lot of data (transcribed interviews) was gathered during the data collection process. In the initial drafts of the research report, a lot of the evidence was included, as it all seemed relevant. It proved challenging to rank and prioritise the evidence and focus on what is most directly relevant and impactful for the study. Periodically, it felt as if the whole data gathering process took so much effort – effort that was wasted due to the “discarding” of so much evidence. The primary consideration for reducing evidence was the research objectives, as well as strong convergence or divergence in opinion between the research subjects.

3.15.6 THE CHALLENGE OF THE SNOWBALL EFFECT When is good enough, good enough? The feeling of the research process alternates between feeling inadequate in explanations and being too detailed in other aspects. When the explanations are inadequate, there is a desire to want to elaborate and substantiate in a contextual manner. This risks bringing on the opposite challenge – where there is perhaps too much detail and an expanded topical scope that is interesting to the researcher, but perhaps less directly related to the world under research scrutiny.

The multiple and continuous rounds of feedback to the research supervisor and co- supervisor have helped keep the scope defined, relevant and appropriate. Notwithstanding, it has not silenced the internal questioning about how to balance the need to clearly delineate the research focus / scope with the desire to exhaustively discuss all aspects of the research that interplay with the research topics. The supervisor once mentioned something along the lines of… “The more you learn academically, the more you realise that you don’t know. The more you study and research, the more you will specialise and delve deeper into your narrower area of focus.” Perhaps the opposite is true – due to inexperience in the research process,

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there is a temptation to digress within the academic motive of achieving thoroughness in the research report.

The snowball challenge is about achieving a balance that is academically adequate, scientifically trustworthy and personally fulfilling – in a concise manner, and with a suitable quality standard. It is documenting enough – not too much, and not too little while simultaneously meeting the planned objectives.

3.15.7 THE CHALLENGE OF THE RESEARCH TOOLS The researcher did not exhaustively investigate the required tools that would be required to perform and execute the research study. Various different tools were required at different steps in the research process. These tools needed to be acquired as needed, as there is seemingly no packaged set of all the tools required to execute a qualitative research project.

The following tools were used during the respective phases of the research process:

Table 3.1: Tools employed during the research process

# RESEARCH PHASE PRIMARY TOOL SECONDARY TOOL 1 Proposal development Word processor Academic databases, and literature review Online reference tracker 2 Questionnaire Spreadsheet Pen and paper, development Brainstorm software 3 Obtain research Email programme Electronic calendar subjects 4 Data gathering Dictaphone Pen and paper 5 Evidence compilation Dictaphone Word processor 6 Data analysis Qualitative research data Spreadsheet, pen and classification software paper program 7 Report compilation Word processor Printer, pen and paper 8 Colloquium Presentation software Presentation hardware presentation

Source: Researcher’s own construct

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3.16 CONCLUSION Chapter 3 has reconfirmed the research objectives and research aim in order to create lineage and justification of the research design. The research design is defined as the methodological decisions taken for the research project, specifically in research approach and research execution. A research design is made up of different factors – the research tradition, the research approach and the research design. Decisions for each of these have to be described and justified, and ultimately support and enable the research objectives.

This is an empirical study with a research tradition of Interpretivism and a qualitative research approach, so that the research answers the questions what, why, how and to what extent. The decision for gathering data is through semi-structured, in-depth interviews across a broad spectrum of stakeholders. In order to obtain cases, the judgemental / purposive sampling technique will be used. This offers the advantages of ensuring that each case is selected for their unique perspective, and that the participant is comfortable to participate in the research.

The data analysis technique will be Content Analysis – so that the themes that emanate from the research data can be obtained and highlighted to draw conclusions and build theory. This approach allows for flexibility in theory development by allowing the data to form its own conclusions and build its own story. This is still consistent with the qualitative research intention, provided that the stated elements of research trustworthiness are implemented.

Chapter 3 briefly reflects on some of the challenges that the researcher experienced and overcame during the research process. These included challenges in understanding the academic aspects of research, external challenges such as approval and support for the research scope and challenges with research execution and finalisation.

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Chapter 4 will present, discuss the data gathered, and start defining the conclusive outcome of the research study. The research objectives are confirmed and positioned for alignment and correlation with the research findings. The steps to achieve this are first outlined, before the documented research codes that arise from the research data, are stipulated.

The research findings themselves are grouped by the coded themes – Telecommunications, Value Chain, Customer Experience, Strategy and Structure as well as the overall link between Value Chain, Customer Experience and Brand. The overall sentiment of the research participants is summarised for each indicator. These are supported by relevant, pertinent quotations extracted from the interviews as evidence for the findings.

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CHAPTER 4 RESEARCH REPORT AND DISCUSSION

4.1 INTRODUCTION Chapter 3 documented the research methodology and approach to support the research objectives. In accordance with the 3 Worlds Framework, the research tradition, the research approach, and the research design were specified, justified, and aligned to the stated research objectives.

The aim of the research project is to perform a qualitative enquiry into the perception of a judgemental sample. The study is time-sliced and the data gathering technique comprises semi-structured interviews. The research centres on the perceived influence of the Value Chain activities on the Customer Experience within the context of the Mobile Telecommunications Industry in South Africa.

The research tradition is Interpretivism, supported by a qualitative research approach. Semi-structured interviews were conducted with stakeholders who were purposively selected, and who represent the entire Value Chain of the Mobile Telecommunications Industry. Data was analysed using the Content Analysis technique.

Chapter 3 detailed the available methodological options for consideration for research studies. The selected approach and methods were those that the researcher felt would best support obtaining an answer to the research question and support the research objectives. The reasons for choosing these methods were documented, justified and aligned with the research objectives.

The chapter concludes with a reflective summary of the challenges experienced during the research process. These include the lack of academic understanding of the research process, the need to fundamentally change the objectives and direction

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of the research when organisation approval was sought, as well as the lack of comprehensive tools to support the qualitative research process in a holistic manner.

Chapter 4 presents the research findings. The chapter documents and summarises the inputs from the research participants into the data gathering process. A precursor to achieving this is the process of coding and analysis of the raw data gathered. Additionally, the chapter provides the research outcomes that shape the consolidated research findings and conclusions through providing evidence for the conclusions drawn.

The research objectives are reconfirmed for alignment with the specification of the research steps to compile the findings. The process to obtain findings consisted of iterative and deductive steps to investigate and document the overall themes hidden within the interviewee responses. The next step was to analyse the linked themes and extract the sentiment shared. Both areas of commonality as well as areas of significant divergence are highlighted in order to develop research insights. These are proven and justified by the inclusion of direct quotations from the interviewees.

Chapter 4 aims only to state the “as-is” perspective of the interviewees. Effort was required to limit the amount of information presented, while maintaining the true essence of interviewee sentiment. This is achieved by stating a summary of the responses within a specific coded theme, then providing direct quotes to support the summary.

4.2 RELATING THE FINDINGS TO THE RESEARCH OBJECTIVES The research objectives were stated in Chapter 1. The primary research objective is to: Analyse the understanding of the Value Chain within the South African Mobile Telecommunications Industry against the backdrop of industry changes in order to establish the perception of the degree to which the various areas of the Value Chain contribute to, or affect the Customer Experience.

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This is achieved through the following secondary objectives: • To analyse the dynamics at play within the South African Mobile Telecommunications Industry. • To obtain an understanding of the perceived interplay between the Value Chain and Customer Experience within the South African Mobile Telecommunications Industry. • To assess the maturity of the South African Mobile Telecommunications Industry in utilising the Value Chain to deliver on overall strategic objectives as well as the desired Customer Experience outcomes.

The principle and main findings specified document research insights within the South African Mobile Telecommunications Industry by establishing a link between the Value Chain activities and their respective impact on the Customer Experience. Furthermore, research recommendations will be specified, including recommendations in terms of theory and proposals for areas of future research to contribute towards scientific knowledge.

4.3 STEPS IN CONDUCTING THE RESEARCH AND COMPILING THE FINDINGS The objective of the qualitative study is to explore the perceptions of the research sample on the impact of the Value Chain activities on the Customer Experience in the South African Mobile Telecommunications Industry.

The process of data gathering and analysis needs to follow the research design as specified in Chapter 3. The following steps were followed in conducting the research interviews: 1. Confirm the research objectives. 2. Define the objectives for the interview questions. 3. Compile the interview questions to meet the objectives. 4. Plan the interviews by identifying and inviting potential participants. 5. Conduct the interviews, beginning with the generic questions before delving into relevant detail, depending on the vantage point of the interviewee. 106

6. Transcribe the interview and provide a copy to the interviewee. 7. Import the interviews into Weft QDA qualitative data analysis software. 8. Code all the text in each interview to ensure that it is linked to one of the themes or indicators. Create new codes where necessary. 9. Analyse all the responses for each coded indicator to establish the overall sentiment of the interviewee responses. 10. Select two to four verbatim quotations from research interviewees to attach to the research report as evidence for the claims made. 11. Re-analyse the content of the Literature Review by comparing linked themes to the interviewee responses to draw similarities and differences. 12. Analyse the perspectives to develop insights and make interpretations – including drawing research conclusions and recommendations. 13. Compile the evidence-based research report.

The research explores certain peripheral themes pertinent to the Mobile Telecommunications Industry – including the perception of the industry itself, views and understanding of the Value Chain and of Customer Experience. Strategy and structure are also touched on, as well as brand, before the interviewee is given the opportunity to voice any other opinions or thoughts relating to the study freely.

4.4 SUMMARY OF THE RESEARCH CODES The research report is presented in a way that reflects the data gathering and analysis process. The report is organised by the key research themes. All these themes are tied together to provide a holistic view of the perceptions of the participants on what impacts the Value Chain, as well as what impacts the Customer Experience.

Evidence obtained from the interview process will be cited to support the arguments presented. The evidence is highly summarised for purposes of brevity – albeit while supporting the research findings. The detailed, transcoded interviews are available from the researcher upon request. 107

Following the literature gathered in Chapter 2, and coupled with the research approach decisions in Chapter 3, the following broad themes were deemed important by the researcher and were explored with the research participants during the data- gathering phase of the research study. The thematic framework was derived from literature as well as personal work experience of the researcher:

Table 4.1: Research themes and indicators resultant from the study

THEME INDICATOR Telecommunications Behaviour Growth drivers Products Value Chain Understanding Impact on the Customer Adding value Customer Experience Understanding Impact on the Customer How Customers view it Measures Strategy and structure Structure of business units Strategies in implementation Overall link Relationship between Value Chain, Customer Experience and Brand

Source: Researcher’s own construct

4.5 RESEARCH FINDINGS ON THE TELECOMMUNICATIONS INDUSTRY PERCEPTIONS, GROWTH AND PRODUCTS Interviews commenced with a broad discussion on the history of the industry, the growth of the industry, and the products of the Mobile Telecommunications Industry. The objective is to establish the perspective on how the industry has evolved, and how it is generally viewed.

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4.5.1 HOW THE INDUSTRY HAS PLAYED OUT The industry has evolved in significant ways. Initially, the company that rolled out network and services faster was considered the leader. Products were expensive, and the technology was not well understood. Notwithstanding, there has been unprecedented growth in Customer acquisition. Customers were just too happy to be connected and Mobile. Even though there was no data solution, and there were network reliability issues, the Customers simply accepted it.

In the last 16 years, there has been a reported consistent 25% growth in handset sales, so there has definitely been huge demand. Customers have, however, become more enlightened and selective regarding choice, and of cost versus value. Coupled with the evident market saturation, the industry is now in a retention phase and responding to the required demands. This is achieved through product offerings, technology advancements and price reductions.

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: “The one thing that’s constant in our organisation is change and our readiness to be able to respond to that challenge is where the challenge actually lies… when we started telecoms in this country, you had a handful of products, you had a handful of services, it was fairly easy to sort of your product knowledge wasn’t an issue... You had Customer complaints but they were few and far between and the reason for that was because you were selling to a population that was largely unfamiliar with your product or your service but because it was the latest and greatest thing and it supported business in such a good way... As and when the demand changed, the landscape changed economically, politically, so did our organisation and that is, I firmly believe why our growth has been so phenomenal over the years in terms of Customer base and success on the overall.” - Brandon Oliver, Manager: Retail Support “There have been fundamental shifts in the last few years. I think if you have a look at when I started, there was no data solution. There was absolutely no data solution. If you take a look at how that has changed and shifted significantly, last month one of the communication providers just broke through their 1,000,000 mark as an example. That came from when 3G or GPRS was introduced, we sat with a R40 per megabyte. Now you are sitting with a few cents per megabyte, so obviously that has caught a lot of downward pressure over time. Also the way that we have been promoting and marketing products, that has changed significantly as well where you've had, where monochrome phone with almost no services was good enough because you just wanted coverage and you just wanted to be able to talk, that has changed significantly. At that time, the network quality wasn’t an issue, if you had a dropped call, Customers didn’t care, they phoned back. They were just too thankful to have a Mobile device 10 years ago. Now, you get annoyed if a call is dropped and if you look at the additional services that are sold outside of voice, those things are climbing. So there has been a fundamental shift.” - Joe Clark, Executive Head: Systems 109

“There’s more technologies available and making old legacy technologies interface with new or next generation technologies is quite complex on its own. And then your markets are also much more diverse than what they were before because you have got more niche markets, your market is much more educated, your market Is much more informed and the more educated the market becomes, the more demanding they become. So they know what’s out there, they can read all about it on the internet and they are just more demanding. So products are more complex, markets are more demanding, technologies are just more and it’s difficult to get them to talk to one another. All in all the whole industry just got 10 times more complicated that what it was before - although so much more is possible - infinitless possibilities now that we never used to have before and definitely the trend at the moment is data, data, data. Voice is going down, people are finding - everything is more bitty, everything is more - consumers want bite-size information. They don’t want to read documents and documents. Everything must be easily consumable. Everything is faster, faster bigger, faster more.” - Lisa Colins, Marketing Manager: Products

4.5.2 WHETHER OPERATORS ARE DOING THE RIGHT THINGS IN RESPONSE Mobile Telecommunications operators are responding to changes in the marketplace. Appropriate responses are seen in certain areas but may be lacking in others – and as a result, are unacceptable to Customers. Pricing and offer comparison across international markets is such an area. The impact of high market saturation has led to an increase in the speed of launching products in order to compete for Customers, or to maintain market share. Price wars are unsustainable, and the industry needs to focus on loyalty and giving back. In the past, the industry could do anything and get away with it. Fixing happened along the way. Nowadays, a far more structured approach is required. A lot more needs to be done to translate the benefits of technology to Customers simplistically.

Evidence from the interviews conducted support the arguments as follows: “In our organisation, we’ve taken steps in the right direction. I think we’re well on our way to being where we should be but I don’t think we are quite there yet. You know, I suspect that with responding timeously and all the rest, there is still a slight gap, particularly in the field of data because a lot of our Customers do a lot of travelling abroad and they see what's on offer and they come back and they say either you’ve got the product or the service and it’s not at a price that is acceptable to them, or we simple don’t have it.” - Brandon Oliver, Manager Retail Support “The competition out there is quite severe. They, and I mean, something will, a product will launch and the rate at which products are made and upgraded, I think, is much faster. Previously you could maybe wait a year before you could bring out the newer version but now the pace is, the pace has stepped up.” - Sara Bunting, Specialist: Contact Centre Processes “My company is definitely responding. It’s quick to respond to a lot of things that Customers are

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wanting as well as what other companies are doing so obviously therefore Customers then want what is being done” - Cheryl Stillman, Manager: Customer Experience

4.5.3 RECOMMENDATIONS FOR CHANGES IN THE INDUSTRY The industry should focus more on delivering in Customer Service. Innovation also needs a boost, in a manner that reflects understanding of the characteristics of the market and develops suitable and relevant products. The industry should bundle and position products differently into segment-specific value propositions to cross-sell and up-sell to existing Customers. The Mobile networks grapple with the “dumb pipe” syndrome where they provide the infrastructure for Customers to obtain content, yet have no stake in providing or billing the content. This puts pressure on resources and revenues, and highlights the problem of technology-led and product-led approaches. It reflects in the ever-increasing market disintermediation.

The industry needs to execute better in various ways; the correct execution of processes against the correct Customers, so that the right Customers are targeted and contacted with offers. Additionally, smaller, more focused business units are needed that can analyse a market segment and understand it more deeply, and create the relevant products. The departure from a product-led organisation towards a group of Customer segment-led organisational units introduces what can be seen as duplication, but gets rid of the “Here’s our product…. go and flog it” problem and introduces a targeted, scientific and relevant approach to a customer-led operating model.

The following was recorded as responses from the research interviewees: “Customer service is one thing, surely. We have to keep innovating, keep on being the leader in the industry. The thing is, we’ve got a huge emerging market portion and there's a lot you can still do for them so it would be all about understanding the local and the local characteristics and things like that so you can build products that suit them… we can sell existing products to them - that’s one option. We can use them as a source of bringing out new products… you can obviously use your current Customer base to find knowledge and to build new products. To bundle products… if competition is really high, the only way in which you actually going to attract people is if you keep them happy enough to stay with you… at the end of the day, the only think you can do properly is Customer service plus loyalty.” - Sheri Mason, Specialist: Business Intelligence

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“You can have all the technology in the world, but if your client doesn’t buy it, it means nothing, so listening to your clients and seeing exactly how their businesses are from a corporate point of view. We as a network need to understand that these are client requests that we need to, in order for us to grow our database and grow our revenue, is to listen more to our clients and what their needs are and what their wants are… business needs always come first. As a company, you need to be profitable… There's lots of clients that have had requirements years ago. We’ve listened and went back to the drawing board to say, can we do this? But our network infrastructure was not in place. So we’ve had to partner with them and say, for the next few years, this is what can be done, are you prepared to wait that long and can we supply an alternate solution close enough to what your requirements are. So, it needs to make business sense, that's the bottom line.” - Mark Rodney, Sales Executive “I think one almost needs smaller entities who are quicker off the mark and can respond quicker and can address specific niche segments in the market and address their needs specifically… You need to look at the entire experience of youth. So you need specific agents who get specific training, who capture it on a system that has enough fields to capture what you need to capture, that hands over to another system… if you have a corporate Customer, you need to send out your best technician. You cannot just send out any Tom, Dick and Harry. You need to send out a specific person who deals with very demanding corporate Customers. You need to train them accordingly, so you basically need an entire group that just pays attention to that type of Customer. It's like little small businesses and yes, it duplicates, it does duplicate effort… I do understand that you need to avoid duplication, I would rather be smaller and more targeted at my Customer and therefore meet their needs better because at the end of the day, the guy who meets the Customer's needs better is the guy who is gonna survive… in my previous company, marketing had a big research responsibility or at least to see to it that where we see a gap in information that we at least request research and consume that research and do something with it. In my current company I don't see so much of that and I miss that because unless you have consumer workshops and you spend time with your consumers, you tend to, you tend to lose touch… they sort of need to be a bit forward in the Value Chain but often they are here in the middle somewhere and in my current company they are sort of at the end of the line and you sit there and wait for what they spit your way and you take that and you see how you can get that into the market. It's, its sort-of a product driven strategy that I see at the moment. It's like we have these products, go flog it. It's not the consumers are saying this and this - let's go and design this and this and give it to them. It's sort of, ok, with the current system that we have and what we can do, here goes. Go, go get rid of it – go sell it.” - Lisa Colins, Marketing Manager: Products

4.5.4 LEADING / DIRECTING THE CHANGE Changes are led by a combination of factors – Customer need, market competition, and technology advancements. In fact, conflicting views exist on this aspect. The industry has analysed the Customer need to produce what is needed at an acceptable cost. However, the industry has also developed products for which there was no market, and has waited for the Customer understanding to catch up. Once that happens, the investment in the technology starts paying off. History within the Mobile Telecommunications Industry has shown that Customers have a great deal of unconscious ignorance around mobility needs. However, once the Customer understanding is there and the enabling value of Mobile Telecommunications 112

services is understood, Customers start to consume more, and demand more for less. It is an outcome of the advancing technology – there is an unwritten expectation that things should costs less.

Supporting evidence can be seen from the following quotations: “A mixture of our client or our Customers driving that change but also the technologies that have advanced over the years… we can’t be producing products and services and forcing it down a Customer’s throat, we need to go to them first, engage them, find out what they would be willing to buy at what price and find out if we can produce it at a cost that is acceptable and I think that’s primarily what's helped our organisation because I think we’ve followed that to a large extent without taking our eye off what's happening globally.” - Brandon Oliver, Manager: Retail Support “I think that advancing technology sometimes drives Customer needs. I think that sometimes Customers don’t need. I mean, we didn’t know we needed cell phones in 1990… I think technology, possibly, more than what Customers need because technology sometimes knows what they need. And we see in focus groups. We ask Customers, what would you ideally want and they don’t know. So I think there's the element of technology driving that.” - Cheryl Stillman, Manager: Customer Experience “It’s two fold. There are client needs which we generally satisfy with technology but then some clients don't know what's out there and we need to create the needs and wants to show them what their like is like or what their life would be like using technology and how they can start managing their time better… technology helps you not just to define how you do things in a business better and much more efficiently, it actually helps you define what is important to you - which is family and things that are important to you.” - Mark Rodney, Sales Executive

4.5.5 WHAT THE INDUSTRY WILL LOOK LIKE IN 10 YEARS Mobile phones have become commoditised and ubiquitous. It is already terrible to experience a day without it. However, the mobile phone will continue to take a prominent place in our lives in future – by integrating simple functions that humans currently do manually. Evidently, the information explosion on the Internet has started impacting the printing and media industries. The way people communicate and relate has changed. More of this will be seen as the handset subtly takes a more central role, and is incorporated into our lives.

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: “I think already we’ve come to a point where our handsets are our lives at the end of the day... I would say there are a lot of other things that can hook onto it. Silly things, like everybody is wanting things to be done quicker and faster and easier and I think that those things will be translated into a handset, like simple things. Like your entire life will be run through this handset… like switching the geyser off 113

during the day and switching it back on in the evening, or, you know, walking, recording your favourite television programme from home, or even just watching it while you are, are in our new rail system. So I think it will basically be your entire life run from there. Already you are seeing it, with Twitter, with your planning, with your relationships. I mean, already you are seeing that a lot of relationships are being run, run from the handset. I think it’s just going to be more incorporated into our lives.” - Cheryl Stillman, Manager: Customer Experience

4.5.6 GROWTH The objective of the questions on growth is to establish the view about scope for future growth, as well as the elements that are expected to provide the growth of the industry as well as the Customer Experience. The questioning also hones in on current measures of growth.

4.5.6.1 ELEMENTS THAT WILL GROW THE COMPANY Putting the Customer at the centre of the organisation and making decisions for the benefit of the Customer, are key growth drivers. It is a fundamental paradigm shift, and should be executed in conjunction with environmental understanding, learning from partners and competitors. Growth will also come from innovating, from simplifying, re-packaging and building the Customer understanding of products and services – including data and access to the Internet. This may be easily achieved for Customers who are already on board with a particular operator. Additionally, any operator who can offer a full basket of reliable Telecommunications services with a single invoice will own the Customer entirely. This may be achieved through partnerships and vertical or horizontal integration of value streams.

Other aspects are churn management, the level and quality of service delivery relating to core network quality as much as it relates to post-sales service. Customers should feel trust, see transparency, and be heard. In turn, the industry needs to measure the right metrics that matter to the Customer. Purposeful design from the Customer perspective should supersede setting up policies and processes to the benefit of the processes and efficiency of the operators. It is key to focus on the right markets where the greatest potential is to deliver the right products at the right cost, but to do so without alienating other groups. One approach is to lower the overall

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cost per unit. This may look precarious, but with growth in usage, the potential loss in revenue is counterbalanced.

Evidence from the interviews conducted support the arguments as follows: “Customer service is one thing, surely. We have to keep innovating, keep on being the leader in the industry. The thing is, we’ve got a huge emerging market portion and there's a lot you can still do for them so it would be all about understanding the local and the local characteristics and things like that so you can build products that suit them and so that you can, I think that we are, we can really earn a lot. So that’s where we should focus a lot of our energy on…. we can sell existing products to them - that’s one option. We can use them as a source of bringing out new products. I mean, you've got Customers and lot of them might need the same kind of thing.” - Sheri Mason, Specialist: Business Intelligence “I think what will grow the company is definitely service delivery. What I do think happens is that we develop products and services that don’t necessarily meet what our Customers’ needs are… it’s important that we obviously keep ahead of the game 100% in terms of what is being offered to Customers. I mean, things are changing - if you look at social media and you look at the way people are communicating, as a communications company we definitely are getting closer to what it is that people are doing out there in front of PC’s they can now do on their cell phones. But I think what is very important in terms of brand loyalty is the service delivery. I think that they need to feel the trust, they need to see transparency from the company so I think it’s more, more than anything else they need to trust that their company is looking after their best interests... We would look at retention. Okay, most definitely market share. You’d also look at what Customers are possibly spending with that company as well, you know, per individual. I think you could also look at things like, external scores like Customer satisfaction - which is something we are putting a lot of focus on. Obviously things like Net Promoter Score.” - Cheryl Stillman, Manager: Customer Experience “It's a Customer focus. Sometimes we tend to ignore the bottom line, which is the Customer and even the, if we focus too much on the technology, in a diverse market like South Africa where the majority is poor, if we only focus on the technology much we are still not gonna penetrate. So I think the key is the Customer focus, look after the Customer, make sure that your products meet the right market at the right time and they are easy to use. The ease of use as well is important. I think it all is around Customer satisfaction.” - Mandla Qunu, Manager: Engineering

4.5.6.2 ELEMENTS THAT WILL GROW THE CUSTOMER EXPERIENCE Service fulfilment management and service experience management through a Chief Customer Officer can give Customer Experience the same focus as other business divisions. Customer groups need to be segmented so that their needs for product and experience can be addressed individually. High service standards need to be defined and met, and the speed of service needs to be high. This needs to be coupled with strong, accurate knowledge and with the tools for Customers to help themselves. Operators also need to be upfront and truthful about failures in service. 115

Focussing on different aspects can enhance Customer Experience. These aspects are: • Have the right product in the right place at the right time at an acceptable cost - a slick Value Chain. • Impeccable knowledge and pro-active resolution competency in support areas, with communication / follow-up to keep the Customer appropriately informed. • Roll out quality products that work as expected and have a great first-time experience. • Provide good service and reduce barriers to entry; this enhances Customer understanding and knowledge. Couple this will expert and available support. • Incentivise Customers through a loyalty scheme – thank them for their business. • Pay particular and deep attention to the needs, requirements of targeted segments so that the fulfilment of their needs becomes the driver of business decisions across the enterprise. This means speaking to the Customer, involving them in business decisions, prototyping and testing alongside them.

Service is any visibility that the Customer has to the brand, as well as the impact and meaning of that interaction. The Customer may not identify everything as direct service, but each interaction forms a perception.

The following was recorded as responses from the research interviewees: “I think Customer Experience is obviously if they get the best value out of what we already offer them, but also the service - it needs to be fast and effective. Things like, in today’s, you know, day and age is give a Customer what they want quick and fast, so the service standard needs to be high. The knowledge, it needs to be quick and also I think self-service is a big driver.” - Sara Bunting, Specialist: Contact Centre Processes “If competition is really high, the only way in which you actually going to attract people is if you keep them happy enough to stay with you… And it doesn’t cost much... the only thing you can do properly is Customer service plus loyalty - trying to build loyalty with the Customer… what do our Customers think about our website, do they like it, do they not like it. It’s a touchpoint. What are we doing for the community out there? Do they like what we are doing or do they think that we are not doing enough. So all those things would be, in a way, I mean, that’s indirect, social responsibility is an indirect Customer service… Customer service would be any touchpoint - website, people that you call, the trade.” - Sheri Mason, Specialist: Business Intelligence “There's a variety of products and service that we've launched and the key is to make sure that whatever you give to the market is available, is doing what it's supposed to do. That first user experience is key - as opposed to the way that we used to do things before - we launch, then we hear 116

for the Customer complaints and then we try and refine afterwards.” - Mandla Qunu, Manager: Engineering

4.5.6.3 WHAT THE METRICS ARE TO MEASURE GROWTH Besides the metrics that shareholders are interested in, namely market share, turnover, revenue and profit, there are (or should be) metrics to measure growth in Customer Experience. Revenue and market share are indicators of whether the company is generally going in the right direction. It is an indication that Customers are responding positively to what the firm is providing. However, there are internal measures of efficiency and effectiveness of solutions. Uptake and profitability of individual services are such metrics that measure whether resources are correctly utilised.

Supporting evidence can be seen from the following quotation: “Revenue, percentage revenue increase. Percentage of Customers that you have in the market. Percentage of change that you have year-on-year on that. Number of services - uptake of services. I think that a very important measure that you need to have is profitability of individual services… You have to make sure that you are spending that money correctly upfront.” - Joe Clark, Executive Head: Systems

4.5.7 PRODUCTS The researcher believes that there is a misunderstanding of the role of the Mobile Telecommunications operators in South Africa. This is due to the fact that the operators implemented a business model where they purchased the devices and provided them to contract Customers at a heavily discounted price – in return for ‘locking in’ the Customer with the provider. The aim was to extract the view of the research subjects on how the industry’s products were interpreted and understood.

4.5.7.1 WHAT THE CORE PRODUCT IS Mobile operators sell airtime and the ability to connect over voice, messaging and data. The network infrastructure and mobile phones are provided as enablers for making the connections. The operators provide a service, and do not offer physical products – except for the tools, or devices that they on-sell in order to allow the Customer to make a call. 117

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: “Airtime. Minutes of use. Whether it's voice minutes, data minutes, it's, it's airtime.” - Lisa Colins, Marketing Manager: Products “Ability to make a call, I suppose, is the most important. Because you can make a call from - I dunno, I think you are buying the phone - both. Because you need the phone to make a call, right? But I think the phone is the most important because the ability to make a call, you can do it from any phone. No, I think the core, buying the call, that's the most important because you can make a call from any phone - it doesn’t have to be a nice phone for you to make a phone call, so I think what we are buying is the ability to make a call.” - Monica Louw, Customer “Airtime and data. Airtime… for R5 you can make R5 worth of talk time on your cell phone… The handset belongs to Nokia or Blackberry or Samsung. They are not, the cell phone operators’ core business. The cell phone operators buy that handset and they actually giving it to you. They are bargaining on this that you will actually go out of bundle and spend more on your contract to make up for that money at the end of the day but in actual fact it's also built in your package. That's why you have a contract of 2 years and if you want to cancel you have to pay up that contract because you have to pay off your handset… the network does not have a physical product.“ - Nicky Pughe, Customer

4.5.7.2 ELEMENTS THAT ATTRACT A CUSTOMER TO A PROVIDER Largely due to the economically depressed state of the world economy, Customers have been quite focused on cost. Mobile operators have responded to that by implementing pricing plan and cost changes. This is well recognised as not being a sustainable differentiator, so it needs to be coupled with good service to be impactful. South Africans, however, are quite brand conscious and consider image. The Mobile networks build their network using the GSM standard, so the nature of Mobile Telecommunications is such that network coverage is of similar penetration and quality. Customers then factor in brand perception and cost perception with the specific coverage in their living and working environments in order to select a Mobile provider. The order of preference is cost, then brand, and then network coverage.

Evidence from the interviews conducted support the arguments as follows: “In the last year or so there’s been some tariff and cost changes because in our current state, you know, financial state that the country is in people focus on that so that is a big differentiator, so if whichever network can come in with the best prices but yet still deliver a good service, I think they will still come out tops.” - Sara Bunting, Specialist: Contact Centre Processes “I think it’s very much linked to positive brand image…Most of the organisations have coverage in very similar areas, so yes, there's going to be a few of those that obviously are based on that, but I don’t think the majority. I think it’s based on brand image 100% and also because, you know, some brands, 118

for example pull a different kind of segment of the market because maybe they are considered to be cheaper and even though they are cheaper, they may consider them as not the best, for example, in terms of coverage. However, they are willing to sacrifice coverage for affordability, but 100%, I do think brand is really one of the probably, it probably one of the key areas.” - Cheryl Stillman, Manager: Customer Experience

4.5.7.3 ELEMENTS THAT DRIVE THE CREATION OF PRODUCTS Creation of products is either technology driven – the evolution, or availability of new technology. It occurs that regular Customers do not know about, or do not understand the technology-driven products and their associated benefits. It is incumbent on the developer of the product to build that understanding in the Customers. A technology-driven product is strategy driven and fairly risky, but it’s the nature of the Mobile Telecommunications Industry. Price wars and product wars are at the order of the day. There is an interesting business paradox that occurs.

Delivery of products that are based on strategy and the availability of technology are risky and may fail. Conversely, employing a strategy of only developing products based on Customer need is not a guarantee of success. Often, Customers do not know what they want until they see a prototype. The successful strategy is probably a combination of developing prototypes off the back of advancing technology, and comprehensive Customer involvement that shapes the product in a way that satisfies Customer needs.

The following was recorded as responses from the research interviewees: “In some cases the Customer actually doesn’t know what he wants until you tell him what he wants… it’s a two edged sword. You want to be driving technology and you want to be hearing what the Customer wants and basically trying to align the two … if you stay totally dependent on what the Customer wants you may actually never get to where you want to be from a business perspective …so you have to go forward with your strategy but also aligning it… we are all Customers as well, so, and sometimes - a lot of times we don’t know what we want until we see it, or we hear about it, so that’s important, but then we see it and we hear about it and its not available and you can’t get it and it takes a long time. By that time, you’ve lost interest in it and you don’t care about it anymore… and the speed from which the Customer wants it and the competitor - because that’s the race... it’s about business. That’s the race we are in. You are either out for lunch or you are lunch. Now if we, if we continue all our Customer studies and we start to understand what the Customer wants and at the same time we are not developing in conjunction with that, it’s a waste." - Andrew Vosloo, Executive Head: Logistics

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4.6 RESEARCH FINDINGS ON THE VALUE CHAIN AND THE IMPACT THEREOF The research aims to understand whether there is knowledge about the Value Chain, how it is defined, and whether the Value Chain has an impact on the Customer and his experience.

4.6.1 DEFINITION OF VALUE CHAIN Value Chain is seen from a process perspective; transforming inputs into outputs for Customers. It is also seen as a collective of the elements that make the company successful. The Value Chain is viewed internally, or from a Customer perspective as having the ability to add direct or indirect value to the Customer along the Customer life cycle of getting a Customer on board through marketing and selling, to providing support and service and retaining the Customer over the long term.

The Value Chain ensures that Customers can get what they want, when they want it, where they want it. The Value Chain is directly related to product creation and distribution. Other business processes such as support are not part of the Value Chain, but are hygiene factors that are significant if the company gets it wrong. In addition to the internal versus the Customer perspective, there exists a different in Value Chain between physical and digital products. The Value Chain for digital products has negligible cost and every product sold after the break-even point contributes to profit. For physical goods, the fixed and variable costs, as well as physical operations to move the product to the Customer, are incurred for every sale.

Supporting evidence can be seen from the following quotations: “I view a Value Chain firstly as an operational function. In other words, simply put, what are the inputs, what is the process that happens with those inputs to produce a product and a service and of course the logistics around getting it to a Customer… Our role in a Telco or particularly on the Customer care front is to do exactly the same thing, except our raw materials are not in the conventional sense of tangible products. So we’ve got inputs such as our actual Walk-in centres. So, we spend capital, we’ve got the centre, we’ve got a Customer - that’s another input. The Customer comes there for a reason, so we interact with him as a part of the process so our Customer actually is part of the entire Value Chain. So the process happens in order to resolve his query and/or activate or sell him whatever service it is and hopefully he leaves there happy and the feedback that we get from the entire

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interaction would in my mind complete the chain.” - Brandon Oliver, Manager: Retail Support “From a Customer perspective is when I, when I want something I can get it. That’s value to me. But from a business perspective, I think Value Chain is everything - are you adding value or expense to anything or any process that you have in your business and looking at that from a Value Chain perspective is am I getting it at a good price, am I giving it to the Customer at the best price. That might be a very simplistic view but there's other things that come into that - like Customer care, like the way you pay your suppliers, like the way you treat your Customers. So those are all value to my mind, those are Value Chain activities. But the first thing is that the Customer’s got to have the goods to be able to experience the Value Chain. All the others, the soft things like Customer service, the paying of the suppliers, those are, they are very important in the Value Chain if you get them wrong. But they are not the be all and end all of the Value Chain.” - Andrew Vosloo, Executive Head: Logistics “It depends whether you look at digital or physical goods. So let's, let's look at both. I think if you look at the digital Value Chain, you are looking at it from the context of, from the handset manufacturer, every single service that's added into that specific Value Chain, all the way to the handset in the Customer’s hand. So content - you’re looking at different services being offered, you're looking at products being offered on the handset and aggregation of that services all the way to the glass on the handset that the Customer has on his device. Physical Value Chain - more an internal process where you distribute products through your retail channels, through your different outlets, through your different distribution points, whether that be retail, your company owned retail shops or whether it be your massive national chains. So that whole process from receiving a physical good into your own warehouse, packing that, shipping that with couriers, everywhere- until the point of sale especially… Your cost of distribution for the one is negligible. The cost for the other is not. If you wanna steam a ringtone to a Customer, there's no cost to that. If you wanna stream a, a, a, if you want to send a few MMS to a Customer, there's very low cost to that. If you want to send an SMS to a Customer from a network point of view, there's virtually no cost to that. If you want to send a phone, if you want to send, for example - say you've got a telesales function and you want to send a phone to a Customer, one phone might cost you R200 but it may cost you R100 to distribute that phone, to deliver that phone to the Customer, so 50 or 33% of your cost may be made up purely just of packaging and distribution cost. So, should you ship a R200 phone to a Customer - does it make sense? Not sure. You need to make a call in terms of what gonna be the ARPU in terms of that Customer... In the case of physical goods, you probably look at your most profitable products and just keep to those. In the case of a virtual product from a digital product perspective, you can have much more available to a Customer because your cost is different… your cost in terms of having the capability to send an SMS or an MMS is a fixed cost, it's a sunk cost, so the more volume you can push through that, the better it becomes. So you’ve got one fixed break-even point and everything after that just goes straight down to the bottom line.” - Joe Clark, Executive Head: Systems

4.6.2 DESCRIPTION OF THE VALUE CHAIN FOR MY COMPANY The Value Chain is not well understood theoretically, but there is evidence of the Value Chain activities within companies. Multiple Value Chains exist per division with inputs and outputs that affect quality that is delivered to the Customer. It is important that the Value Chain does what is necessary to give the Customer what he wants. Companies may operate in different ways, and one of the reasons for that is the profit motive that has been prioritised above the Customer focus. 121

Value Chain optimisation occurs to increase efficiency and for competitive advantage. Investments are made in warehouse infrastructure, systems, product serialisation and infrastructure for the digital Value Chain. The Value Chain is evaluated and changed as needed so that the ever-changing requirements of the Mobile Telecommunications Industry are catered for. Technology improves, and can be used in the optimisation efforts to improve distribution and make products accessible – even in low-income areas.

Optimisation and coordination are needed, or lack thereof is shown when communication between divisions is chaotic, or when the handovers between the Value Chain activities are chaotic – missing information, lack of cooperation and poor infrastructure to make the handovers smooth.

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: “There’s more than one Value Chain per division… I think that all of those efforts amount into one thing and that is inputs, process, end result… So we form part of their inputs, in their Value Chain and we form part of the outputs and they will use... Their outputs directly impact our inputs and our ability to create quality outputs to our Customers.” - Brandon Oliver, Manager: Retail Support “We succeeded using the Value Chain that we started 14 years ago but I think it needs to be re-looked at because the networks and people and our requirements are changing. Technology is changing, so the Value Chain needs to co-exist with that. So yes, it worked for us, but it needs to change.” - Mark Rodney, Sales Executive “The left hand pretty much doesn’t know what the right hand does and although we do work with project teams... Your commercial and your technical session so those role-players there are supposed to work together but at the end of the day it all depends on how well they communicate with each other and what is possible on the systems or not. And what information is captured on the systems to aid decision-making.” - Lisa Colins, Marketing Manager: Products

4.6.3 HOW THE VALUE CHAIN IMPACTS THE CUSTOMER EXPERIENCE The Value Chain impacts the Customer in terms of product relevance and quality, as well as speed and price to market. Addressing the need of the Customer and providing him with value, returns value to the organisation. All the elements need to

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work, and the Customer has to be buying. If the Customer is not buying, the Value Chain is ineffective.

The Customer concern is about getting what they want when they want it. If there is a problem with supply, the Customers feel it and may take their business elsewhere. Companies should be inventive and be smart, or strategic about how the Value Chain is individualised for Customer segments in order to drive uptake. If this means promising, or implementing differentiation in service, then the processes and the support around that need to work with quality and efficiency.

Evidence from the interviews conducted support the arguments as follows: “There is no use selling the Customer something that the Customer doesn’t want. So, if you’re too late, if you’re too slow to market, then you would have lost the Customers. If you try and sell the Customer the wrong things, they’re not gonna buy it. And, yes if you are not efficient in building your products at an acceptable cost structures then obviously your pricing will be incorrect and Customers won’t be willing to buy your products so yea, for sure, your Value Chain has a huge impact on your Customers.” - Bert van der Westerhuisen, Executive Head: Commercialisation “I think the Value Chain is about the Customer… that’s the only thing that adds value, is your Customer. The rest all adds expense. You, when you put percentages onto anything, that’s not adding value, that’s detracting value from the Customer… without the Customer and having it at the right place, right time, right product, all the rights… Unless you get those things right, there is no Value Chain… So you might have the best systems in the world, the best process, there are no Customers buying your product - that’s not a Value Chain.” - Andrew Vosloo, Executive Head: Logistics “If Customers can't get into touch with your products then, then what's the use of having those products in the first place? Depending which shops or vendors you target for that, it does make a big difference. And also, you have to make sure that new products, if you wanna penetrate more, that you basically target even the lower end… you need to have a, a, a different strategy on those as well. So you can't just combine and do one. But on the other side, you should never underestimate that the people on the lower end can't afford some of your so-called expensive products… people will even surprise you and their affordability might be high. So you've got to be cunning in the way that you do it.” - Mandla Qunu, Manager: Engineering

4.6.4 WHETHER THE VALUE CHAIN ADDS VALUE TO THE CUSTOMER Value Chain should add value to the Customer and provide “more”, however, it is the mechanism to deliver at least the minimum. Doing your job does not automatically equate to value. The core product may have importance to the Customer, but adding value is located around the peripherals, and shows how a Customer is supported

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around his product purchase. Adding value helps create sustainability, and the way in which the value is added identifies the company to the Customer.

The activities of the Value Chain need to work together smoothly. In contemporary business, operators need to add value to Customer or risk having the Customers leave for a competitor. Making sure that everyone involved in the Value Chain has the knowledge of the bigger picture, and work towards ensuring that any touchpoint that a Customer wants to use, is available to him – where and when he wants it.

The following was recorded as responses from the research interviewees: “When you use the term add value, then in my mind it conjures up ideas about - okay were adding value, we’re giving you more that you expect. And if we’re saying that our Value Chain adds value to the Customer, then I'm thinking, no. I'm thinking of Value Chain as a mechanism that allows us to deliver the bare minimum. I think that adding value still needs to be put onto a Value Chain… you’re the expert, you’re the person sitting behind the desk and has been trained up, so you go into my account, check that everything is as it should be. If I'm sending too many, or I'm sending a lot of messages and I don’t have a bundle available or active on my account, then I'm expecting you to advise me - sir or ma’am, I think you should be doing this - advise me, all that sort of thing… I do understand on the normal Value Chain process, yes it does add value... I think that they might be under delivering.” - Brandon Oliver, Manager: Retail Support “I think there are certain elements. I wouldn’t say that the total. I think it’s like a cog in a wheel. If it’s not working, it won't offer value. So there are different cogs in the wheel that need to work together to offer value to the Customer.” - Sue Gad, Consultant: Product Management “I don't think the Customer really cares about the Value Chain - he wants what he wants when he wants it… from a strategy point of view, we also try to make sure that all products that you have are available at all times to all Customers… in a virtual space, where most of our products sit - outside of handset sales, I think that you have to make sure that any distribution that you can give it on, should be available to him.” - Joe Clark, Executive Head: Systems

4.6.5 HOW THE VALUE CHAIN ADDS VALUE TO THE CUSTOMER A few key points relating to how the Value Chain adds value to Customers are raised: • Value is based on what a Customer wants, or on what he doesn’t know he needs, but when he gets it, he can easily incorporate it into his life. • Having a phone adds value when the Customer knows how to use it and has people to call and communicate with.

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• Giving Customers financial rewards that allow them to talk more adds value. In turn, his habit of speaking more contributes to the company. • Value is contextual – a Customer who gets his first phone derives great value from that, however, a Customer who has had a phone for 10 years derives value from getting his email pushed to his telephone. • The definition of value changes over time. • Smart segmentation plays a role in the definition and delivery of value, and the approach of the organisation towards servicing these Customers should not be uniform. • Value can be added by providing additional and complementary artefacts and services, over and above the core product purchased, or core service rendered.

In addition to having the right product in the right place at the right time, the value is added when the product enhances the life and lifestyle of the Customer. The internal culture towards servicing the Customer as well as the Customer mindset and how he views the mobile device, are elements that define how value is added, or perceived.

The definition of value changes over time – including the life stage of the Customer. Notably, the value is added when the Customer Experiences imply ease of use and convenience. Satisfying a Customer need only bring in the Customer initially, but the additional / supplementary services that add the additional value keep the Customer, and increase revenue.

Supporting evidence can be seen from the following quotations: “The culture of the organisation is driven by the human resources and it’s the culture of the organisation that will depend on how quickly they can respond, how well the service their Customers etc. so you can have good systems but if you don’t have the correct culture by having the correct human resources management… People in high LSM’s I think view their cell phone or Mobile communication like another utility - it's just there when I need it and it's, even though they can't go without it, it's really important for their lives, but do they think it adds lots of value? Probably not… People in lower LSM’s, I think, their cell phone… makes a big difference to their lives. It allows them to be in touch with their families and it allows them to be in touch with potential job opportunities etc.” - Bert van der Westerhuisen, Executive Head: Commercialisation “From a Customer perspective, if it changes the way his life… If it enhances his life, lifestyle, the way he goes about his daily business, that’s value to him. And if, if, if we are creating that and it could be by product, or by convenience, then that’s value.” 125

- Andrew Vosloo, Executive Head: Logistics “Satisfying a need brings you the Customer. Adding the value brings you the additional value that you are looking for, so you have to find a way of adding that additional value. Everybody has got a need to communicate, but supplementary services that you sell onto that, the additional services that you add onto that is where you, where you increase your ARPU.” - Joe Clark, Executive Head: Systems

4.6.6 AREAS OF THE VALUE CHAIN THAT ADD THE MOST VALUE TO CUSTOMERS It is hard to identify any particular Value Chain activity, or business division that adds more value than another. In the eyes of the Customer, it is the areas that he deals with – shops to buy handsets and airtime, or the Customer care touchpoints where he gets help. Though Customers value the importance of Customer care, having a Customer call in may be a sign that something is not working, and that there may be a broken link in the Value Chain.

Human Resources Management is seen as critical. It is the most fundamental resource that gets everything else going. The importance of the Value Chain activity depends on the industry, and for Mobile Telecommunications, operations which build and manage the GSM network, the core enabler for the provider, provides the foundation for the rest of the provider’s ecosystem to exist around. Nevertheless, even this function relies on the human resources fundamentally.

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: “Customer care. So that’s really the voice... So I think they just see that voice, that call centre. The fact that some systems team or the network is not, the network is not right or we’ve come out with a fancy smart new product, I don’t think the Customer sees that. The Customer is dealing with somebody at the end of a phone and that’s all the Customer sees - which tell us how important our Customer care agents are, because they are the face of the company. The fact that there’s a structure behind it, I don’t think the Customer should, should necessarily know about that.” - Lynne Morrow, Executive Head: Credit and Risk “It all depends on the organisation I guess. I think I almost answered you with the Supply Chain in mind. Look, in the telecoms industry, the engineering will be the most - that's where the product is developed. If you go to the financial industries, you find people in finance adding more value. But when it comes to the Customer - I'm talking organisation wide - I can't really say that a Customer knows which division has done product Y or this or that. To the Customer it's the entire organisation… When things go wrong… the first person that I deal with represents that company.” - Mandla Qunu, Manager: Engineering 126

“I think it's like the chain. All, all departments deliver different things and all departments are responsible for different things, but at the end of the day, the focus, there's one focus. So I think, I don't think there's a specific division that's more important than the other. It's like a team. Everybody in a team needs to work together in order to reach the end goal.” - Monica Louw, Customer

4.6.7 AREAS OF THE VALUE CHAIN THAT ADD THE LEAST VALUE TO CUSTOMERS It is equally hard to determine where the least value comes from. Lack of value-add is determined by Customer points of pain; poor marketing information, lack of market understanding, problems with network and support problems. To a Customer, it is personal, and any touchpoint may delight or frustrate him. This will alter the Customer perspective about where he derives value.

Business goes through cycles; economic cycle, Customer life cycle or product life cycle. During each phase, or cycle, different functions or Value Chain activities take the lead. During this time, the background functions may be seen as adding less value. What is important is that every activity contributes as required – whether it is a Customer facing, or background function like finance, systems and administration.

Evidence from the interviews conducted support the arguments as follows: “Every single one of these things have an impact on the Customer - directly or indirectly. It’s just, the least... how do you go about buying doesn’t matter to the Customer, as long as the price that you give to the Customer is a good one. So the Customer couldn’t be bothered whether you go and acquire it in bulk. That’s the company’s problem. The company needs to make sure that whatever they do is good for the Customer.” - Sheri Mason, Specialist: Business Intelligence “I really believe every area has their role to play. I mean I cannot tell you any area that I think is redundant.” - Cheryl Stillman, Manager: Customer Experience “In different cycles, each one takes on a different importance within your business and the cycle that you are going through.” - Andrew Vosloo, Executive Head: Logistics

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4.6.8 THEORETICAL FRAMEWORKS ARE GREAT. APPLICATION MAY NEED TO BE DIFFERENT It is not overwhelmingly evident that the Value Chain framework is implemented as per Michael Porter’s theoretical methodology. There is evidence of customisation of frameworks to suit the industry, or the market, or the strategic focus of the organisation. Focusing on the Value Chain leads to managing efficiency. Focusing on the Customer’s experience of the Value Chain leads to other outcomes, such as understanding the Customer and designing products that meet his need. What is important is to look at it from both sides – from the Customer side, to develop relevant products, but also from the internal perspective – to focus on efficiency.

Benefiting the Customer also benefits the firm. The Customer does not know about the framework, or understand the Value Chain, but expects to get service when he expects it. Whatever activity happens, or process that is executed, or system that is implemented, should make the Customer happy – irrespective of the ‘compliance’ with the theory of Value Chain.

The following was recorded as responses from the research interviewees: “If you had to say a-to-z it runs exactly like that. In bits and pieces they are there, but I'm just not sure that the flow is 100%... I think frameworks are great as a starting block, you know, especially if you have some examples of frameworks that were used and what the results were, then I think it should be customised to see, you know, this framework was used in this industry, you know, what is their target markets and it should be customised to the target market of your company.” - Sara Bunting, Specialist: Contact Centre Processes “It depends on if you are focussed on the Customer - the Customer’s experience of the Value Chain, or whether you are focusing on the Value Chain, a la, Supply Chain of acquiring products and selling products. But even if you look at it from a company perspective, before you decide to acquire materials and resources for potential products that you can sell you must first always understand the Customer first. So your Customer insight is of utmost importance so that you can understand what do Customers want. And once you’ve understood what Customers want, only then you go and you actually design the products and once you design the products you go and acquire the necessary resources to build the products, so I would probably put a step in front to first say - understand the Customer first, design the products and then go and build the products and then eventually sell it.” - Bert van der Westerhuisen, Executive Head: Commercialisation “Taking any one of those activities and bringing them to the fore - depending on your cycles… and in your business that you’re in.” - Andrew Vosloo, Executive Head: Logistics

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4.7 RESEARCH FINDINGS ON CUSTOMER EXPERIENCE AND THE STATUS QUO Interviewees were asked about how Customers view the firm’s internal functions and how this adds value to Customers’ lives. This includes views on the definition of Customer Experience and how it is measured. Mechanisms that Customers use to alert the industry players about their actual experience are covered, and the perceived link between Value Chain and Customer Experience is assessed.

4.7.1 HOW CUSTOMERS VIEW COMPANY FUNCTIONS Customers neither want to, nor should know about and feel about the silo'ed functions of a firm. The Customer sees the firm holistically – as a single brand and expects the details to be hidden. What is important is that the firm’s functions execute in a well-integrated manner and provide a fast, quality resolution. This does not imply Customer ignorance, rather it means that Customers purposefully require the abstraction.

What a Customer Experiences at any touchpoint will give him an indication about whether the structures, processes or systems are in place. This overrides any external factors and information that the Customer has not experienced himself. Customers adopt a fairly tolerant approach to company functions, but apply a sterner attitude towards company representatives when there is a service failure and more information is sought.

Supporting evidence can be seen from the following quotations: “Our Customers have made it abundantly clear that they aren’t interested in what happens prior to them having the interaction. So while they appreciate that those things have happened and have resulted in them getting, you know, being elated at the service they received at the end, they really - whether they understand it or not - and we must never make the mistake of assuming that their disinterest in our processes and functions is related to the fact that they can’t comprehend what we’re doing. That would be a grave mistake because a lot of them are business people and it’s exactly that. The devils in the detail for us. They pay us to keep the devil from them.” - Brandon Oliver, Manager: Retail Support “The quicker a company responds to them, the more the Customer will be under the impression that it’s a well-integrated company. I think the longer a company takes to respond to feedback or Customer service issues, the more they’ll be like its one department in one building and they don’t talk

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together… If you are talking about a highly skilled Customer, they will be like - this company has got a very good technical background. They most likely have the systems that have well integrated and when they see the speed they will be very impressed.” - Sheri Mason, Specialist: Business Intelligence “If I am upset with the airline then I will scream at everyone who is at the airline. The Customer sees every employee as being a representative of their company. And I think that the Customers are generally quite amazingly tolerant but then you need to be open and credible and transparent and share with them… But if they really hit a snag, they want more information.” - Lisa Colins, Marketing Manager: Products

4.7.2 THE VIEW OF A COMPANY FOR THE VALUE THAT IT ADDS TO THE LIFE OF CUSTOMERS Customers attach value to: • Their own perceptions. • Service levels experienced. • The emotive appeal of the brand. • Perceived quality and reliability of the company. • Feelings about the future prospects of the company.

The industry has moved beyond supplying solutions to needs. Customers view value differently and look for what they get additionally. Certain Customers base decisions on low cost and ignore service quality. Others value brand and are loyal. They see value in the association, as well as the core product. Mobile Telecommunications products are now commoditised, so the attraction is in the emotive appeal and other subjective areas.

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: “I think it's the value it adds to their lives… it depends on the market. If you look at the prepaid market, by virtue of being the prepaid, you've got that ease of move, so they don't really get attached to one brand and sometimes it all depends who offers the cheaper rates in a day… To certain people, it's not about the specific company.” - Mandla Qunu, Manager: Engineering “They view the company in terms of the emotive appeal that it has, in terms of their branding and marketing as well as their previous encounters with the company - like when I called the call centre and your staff were really dumb and uninformed - that is really going to influence how I view you… if I have to start deciding between operators, it's, it's not gonna be about airtime because I can get that anywhere, it's gonna be about the other things… the perceptions, the service levels, the emotive

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appeal of the brand, the perceived quality, the reliability, the, what future I think the company has.” - Lisa Colins, Marketing Manager: Products “They make my life easier - cause if I didn’t have a cell phone, I wouldn’t have been able to within seconds talk to my child or talk to my husband or relay an urgent message to somebody... yeah (it is adding value) - cause what if I had to go and drive and look for a, a tikibox or have to be in the office to phone or at my house to phone. If I'm on the road, where am I gonna phone from?” - Nicky Pughe, Customer

4.7.3 DESCRIPTION OF CUSTOMER EXPERIENCE Customer Experience is feeling and thinking after an interaction with a provider. Getting what was asked for and the time it takes to provide this, as well as the quality that is provided, impact this.

Customer Experience is service delivered on the frontline, but includes aspects related to product such as what the product is, where the product can be purchased, how easy the purchase is, how easy it is to set up and use the product, and how easy and effective problems resolution is. Leaving the company is also an important experience.

A good Customer Experience includes the following aspects: • Single point of contact for resolving logged Customer queries. • Good timing for resolution. • What the company does to assist the Customer if the resolution time is extended. • How representatives of the brand treat Customers in order to make Customers feel appreciated, valued and respected.

Mobile Telecommunications Customer Experience has two sides. Firstly, it is the performance of the core product – does it work as expected? Secondly, the Customer’s experience when service / support is required. Either of those interactions creates an emotional response.

Evidence from the interviews conducted support the arguments as follows: “How a Customer walks away feeling, what a Customer walks away thinking, whether a Customer walks away happy or not based on an engagement or an interaction with the service provider. So if he, or she got what he or she asked or paid for, if he or she got what he or she asked or paid for timeously and if the quality is as expected, all of that translates to an experience. You can still win Customer 131

confidence even if one of one those three areas are slipped… I think that far too many times the, the Customer service representative probably also just feels undervalued and, and that translates to an experience with the Customer that is nonchalant.” - Donna Packs, IT Systems Engineer “It's your experience with the company at every touchpoint. I don't have a definition per say. It's the various touchpoints and the interplay between the various touchpoints and how I experience them and the end result or the, the taste it leaves in my mouth at the end of it all.” - Lisa Colins, Marketing Manager: Products “It's the service I receive… it's from the minute you are making the call until you drop it. Picking up your phone and dialling - how do you experience the service at that time… when you have issues, you go into a Walk-in centre or you phone a call centre. From the time you said hello to that person and give your request and by the time you walk out - satisfied or unsatisfied with your issue.” - Nicky Pughe, Customer

4.7.4 DIFFERENT APPROACHES USED BY FIRMS TO MEASURE CUSTOMER EXPERIENCE Firms can use surveys, Customer satisfaction indexes, focus groups, mystery shopping and churn measurement. Product uptake and performance measurements are also done. The combination of the service and product experiences form the Customer perception and ultimately contribute to the ultimate measure of Customer Experience, whether the Customer would recommend the company to his friends.

Industry-specific measures on network experience, quality and performance are also done. The aim of measuring is to assess the performance of the Value Chain, and to identify areas that need improvements across the touchpoints. Measures drive behaviour. Having the correct measures as targets for senior managers should be helping to drive the Customer Experience in the desired direction.

The following was recorded as responses from the research interviewees: “CSI’s where after any interaction, whether it be in a store, on the telephone or via the web, they actually ask the Customer to rate the service… Then, obviously, external surveys, mystery shopping - you know, they just go into the stores and test the services. And then, maybe as an indicator, you know, you can view how many people join or leave your company.” - Sara Bunting, Specialist: Contact Centre Processes “How one measures your service to a Customer can be done via mini-surveys and, and Customer, in the call centres etc. As far as service is concerned, that's one component and I think it plays a role. And then as far as product uptake is concerned, do people kind of, do they buy a new product, does it actually work etc. And those 2 things combined actually then influences a Customer’s opinion of a company so that you would then say well, I am, their products work, their service is good so that then results in me kind of being willing to say that I will promote the company. So they are not different, I think all the different ways of measuring Customer Experience ends up with a single question - am I 132

willing to recommend this… something like Net Promoter Score which then should be the ultimate measure of Customer Experience.” - Bert van der Westerhuisen, Executive Head: Commercialisation “It’s to get a view on the experience across the different touchpoints, however it’s also to rectify any process failures and to improve. So even if it’s not rectified, to improved things like turn-around-times, whether it may be service failures, whether it be products and services. It’s basically to improve the Customer’s experience because at the end of the day, that’s why we are here… a CSI or NPS is very much perception. CSI possibly looks at more interaction based interactions. It looks at process, its specific failures. So there you can actually unpack and really get to the nitty-gritty of what is either working or what is not… I think the measurements we are using are industry wide.” - Cheryl Stillman, Manager: Customer Experience

4.7.5 APPROACHES USED BY CUSTOMERS TO ALERT OPERATORS ABOUT THEIR CUSTOMER EXPERIENCE Customers use their own preferred methods to alert companies about their experiences. Websites like hellopeter.com, complaint boxes, phone calls to Customer Care, social media and consumer rights media programmes are some of the options. Customers who complain are still interested in having their issues resolved. It occurs that companies only want to take action when a Customer has decided to leave.

If the Customer prefers social media, he shares his experience with his friends and community. The Customer may have a broad reach, and the organisation needs to be listening and reacting. Some mobile operators have difficulty quantifying the churn ratios because of the cheap SIM cards in the market. Customers exploit this and recycle themselves between competitors. Firms need to monitor what is being reported about the Customer Experience, as it provides insight into what is happening within the organisation.

Supporting evidence can be seen from the following quotations: “At a point you know when the Customer is going to leave you, its, it’s too late. I don’t think their intention is to alert you. I think he’s tested the experience and decided it wasn’t good and left. If it’s maybe at a point where, you know, he alerts you and says that he will leave the company if something is not done. That’s an alert… Even media programs 3rd Degree.” - Sara Bunting, Specialist: Contact Centre Processes “I think a lot is done with negative feedback and we are living in an age where we’ve got social networking - Facebook’s, etc. and that’s unfortunately the reach, from a Customer point of view, is quite big. So it just takes any Customer to join a Facebook site like Vodacom Hell that reaches widely, so, so I think that Customers are becoming a lot more demanding and, and we’ve got to find ways to, 133

to be able to keep up to speed.” - Lynne Morrow, Executive Head: Credit and Risk “I think consumerism is, is on the increase… I think that with the Consumer Protection Bill and all the education is being done around that, Customers are much more aware of and will write into sites like Hellopeter or the newspapers or will phone into radio stations like 702 and talk about what they are unhappy about and that's why you have got corporate communications monitoring what's happening in the media space... You have to monitor that so that you can address it because it's symptomatic of what goes on in your company.” - Lisa Colins, Marketing Manager: Products

4.7.6 RECOMMENDATIONS FOR CHANGES TO THE MANNER IN WHICH THE FIRM IS MANAGED Ideas / suggestions that have been mentioned for companies to improve the Customer Experience are: • Fix the basics that hurt the Customer Experience. • Establish partnerships with suppliers and Customers to improve pricing, touchpoint experience and out-dated processes. • Segmentation of Customers as a service delivery tool that increases efficiencies in the right areas. • Simplification of offers and services from a Customer point of view. • Identifying and delivering the “wow” factor measurably. • Profitably use insight and knowledge from research to create value. • Have the right focus and support for the customer-focused agenda. • Develop the pockets of excellence. • Perform strong market development that is aligned to the market segmentation.

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: “Closer partnerships with your supplier so that you can get better pricing and better turnaround time. Closer partnerships with your Customer so that he or she gets what they expect, not what we think they expect and a service touchpoint interaction of quality and a pleasant one at that. Just streamlining. I think, also to challenge the way we think. I think that in the past, certain things used to run in a particular way because it made sense then. Technology has evolved, the world has shifted.” - Donna Packs, IT Systems Engineer “Simplifying things. That would absolutely, for me, be something that we could do better. But I think, generally, we are on the, on the right track. And a continued Customer focus - if you look where we are from a Customer obsession point of view, I think we’ve still got a lot of, a long way to go in each

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way to go to ensure that we delight our Customers… I'm not sure we’ve identified what that wow factor is and again how do we measure it.” - Lynne Morrow, Executive Head: Credit and Risk “We have pockets of excellence within our company and I think the excellent ones - we need to continue with them. The ones that are not so excellent, those obviously are the ones that we need to focus on and I think in certain areas of our business we haven’t grown with the way the business is grown and that is now what is causing us to have pockets of excellence in our business, which in turn affects the Value Chain, which is affecting the Customer. That’s really the issue. We have certain areas of our business that are, that generates billions of Rands and the run it on a spread sheet.” - Andrew Vosloo, Executive Head: Logistics

4.7.7 ASSESSMENT OF A LINK BETWEEN THE VALUE CHAIN AND CUSTOMER EXPERIENCE There is definitely a link between Value Chain and Customer Experience. Each function should take ultimate responsibility for their role, but also coordinate to give the Customer the benefit. Essentially, the Value Chain creates the product that draws the Customer. However, every activity should be designed and performed for the best Customer Experience. Having everyone seeing the same goal, helps achieve this. It is pointless having great operations, but having delays on the service side. This will cause an overall negative Customer Experience.

Some challenges exist in assessing the link between Value Chain and Customer Experience. Measuring the impact, benchmarking against competitors, and opposing targets of stakeholders performing Value Chain functions, are examples. The organisation without a single goal and alignment throughout, results in divisions working against each other, and in frustrated Customers.

Evidence from the interviews conducted support the arguments as follows: “I think that all the parties that are responsible for ensuring that those Value Chains do what they are meant to do; I think there should be communication amongst all of these entities. Relaying exactly what it is their Value Chains are and what the impacts are from other areas so that you know, if we have a forum like that, then I think we can go a long way toward eliminating working against each other. We can a long way to all understanding our common goal… Then they can create a synergy so that the end, ultimately, Mr Customer gets optimal, derives optimal benefit out of all the efforts put together.” - Brandon Oliver, Manager: Retail Support “I think it's a very difficult to measure that - to measure that impact. From a Value Chain point of view, Customer Experience, your, the, the, the more perfect, the more perfect your Value Chain is, the better your Customer Experience. That comes in various forms, so if you’ve got a very good distribution outset, if you've got a very good - if you never have a stock-out scenario as an example, 135

your Customer can walk into any store and buy the same product at the same price, or at a competitive price, he’s probably, there's a good chance he will take what you have. But you have to also be able to disseminate your services compared to your competitor, so it doesn’t help just having a good distribution channel, it doesn’t help just help having the, the product there at the right time… There’s different activities’ supporting the Value Chain. But you need to look at it, you need to look at it holistically. If you've got any kind of imbalance in that Value Chain and the Value Chain is not only the cost aspect of getting your product to your Customers. It goes around the service. It goes around the product mix of the product set. It goes about a mix of various factors around that. You’ll have to understand the mix and use that then to position your product differently compared to your competitor.” - Joe Clark, Executive Head: Systems “Oh yeah. If the divisions within your Value Chain don't work together, sometimes one wants to deliver this and without, because his or her targets or that particular division’s targets is just to do one of those products, and the other division’s is to look after the Customer, if they are not working together, of course the Value Chain is gonna impact it. What has to be happening is, if I want have a target to develop X products per annum, irrespective of how user-friendly those things are or how much we have, I'm gonna go for that. So if we don't all have one common goal which is the Customer, then yes, to answer your question, yes, it does have an impact.” - Mandla Qunu, Manager: Engineering

4.7.8 DEFINITION OF THE LINK BETWEEN THE VALUE CHAIN AND CUSTOMER EXPERIENCE Assessing Value Chain within the context of Customer Experience, can assist in streamlining processes to be faster and better. Customer Experience is a differentiator, and a Customer may leave for a competitor who is slightly behind, but offers a better Customer Experience. The better the ability to execute the Value Chain and meet Customer requirements, the better a Customer’s experience will be. This leads to word-of-mouth conversation and brand promoting – the foundations of Customer perceptions.

Views conflict between Value Chain needing to make business sense, and the view that a Value Chain that creates value for a Customer, automatically results in a good experience. The way to manage Customer Experience in a human-driven organisation is through process design, process management and measurement. Getting the balance right is hard, and measurement (where possible) helps achieve this. Good design from the Customer perspective and good communication from the internal perspective are critical success factors in delivering delight through the Value

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Chain. It eliminates re-work, creates synergies, smoothens out handovers, reduces complexity and delivers what Customers value.

The following was recorded as responses from the research interviewees: “With going through your Value Chain with a fine tooth comb and redefining and streamlining your turnaround time will be a lot shorter. Your delivery will be a lot better. You, your Customer will get a much higher quality of service - quality in terms of speed, in terms of value. All of that lead-time will be cut out. All of that error, all of that unnecessary bottlenecks that exist will be ironed out in the processes which will all translate into a better experience for the end user.” - Donna Packs, IT Systems Engineer “If you look at the Value Chain, you should think what is the strategy behind each one of those components and see does it drive Customer Experience, does it, you know. And if it doesn’t you should ask well what's the purpose… the differentiator is becoming - how satisfied is your Customer! If your Customer is not satisfied, the next operator might be 1% behind you but if they give the Customer a better experience, the Customer is gonna leave.” - Sara Bunting, Specialist: Contact Centre Processes “It's everything that you do and the impact of that on the Customer… You’ve got to go to a website, then you've got to print out this for, then you’ve got to fill it in, then you’ve got to fax it back then you’ve got to wait for someone to call you, then that person will ask you this and this, then you... That is extremely complicated and extremely inconvenient and half of your Customer's don't even have access to the internet or fax machines… And in your channel strategy, where do you want to sell what you are selling and how do you make it possible for your market to reach you. So there is a very intricate link between Value Chain and your Customer Experience. And the, the, the more, the better the synergy and the more people in the Value Chain talk to one another, the better the Customer Experience. The less they talk to one another and the poorer the handovers, the worse the Customer Experience because then the Customer has to explain everything all over again to everyone… There's always enough time to do it again but there's never enough time to do it right.” - Lisa Colins, Marketing Manager: Products

4.7.9 FUNCTIONAL AREAS WHERE THERE IS A CUSTOMER EXPERIENCE Customer Experience is direct with the core product, as well as in customer-facing functional areas. Indirect Customer Experience exists in support / background functions. Failure to execute in support functions, however, fails the Customer. Internal divisions also service each other, so a culture of service should be built so that functions do not fail each other, then fail the Customer.

All business divisions and functions exist for a reason – to provide service to the Customer. The quality of execution, even in background or system-driven environments, ultimately has a Customer Experience impact. Every now and then a story is highlighted about how an employee does his job so well, and how that 137

benefits a Customer. The challenge is to emulate that kind of care throughout the organisation for internal and external Customers.

Supporting evidence can be seen from the following quotations: “Your Customer Experience runs through all functional areas because either directly or indirectly you are experiencing the business, or the product or the service. I think indirectly, even the most non- Customer facing business units are having an impact.” - Sheila Abraham, Manager: Product Operationalisation “Customer Experience gets influenced by every single division of a company. If marketing can't get the, can't market the product correctly, it will influence the Customer Experience. If operations can’t keep a network up, it will influence Customer Experience. If logistics or distribution can't get product out to a store. It will influence the Customer Experience. If Customer care can't treat the Customer and answer their questions properly and get their issue resolved, it will influence their Customer Experience. It falls everywhere. If you can't bill a Customer correctly - the industry has got a recent example of that - it will very definitely, we see that now, it will influence Customer Experience.” - Joe Clark, Executive Head: Systems “You get external Customer Experience but you also get the internal Customer Experience. I am the Customer of the advertising guys. So internal Customer's - we are all of one another. But all the divisions that interface directly with external Customer's, there is a direct Customer Experience.” - Lisa Colins, Marketing Manager: Products

4.7.10 HOW THE MARKET VIEWS SERVICE FROM OPERATORS The first consideration is the preference of a Customer for service – face-to-face contact, telephonic support, or written via email. Beyond that, the Customer does not care about, or want to know about where responsibility lies for a resolution; as long as he obtains his desired outcome. The Customer expects a representative to own his request, and to have promises for resolution and to undertake follow up. If this requires internal handovers, these need to happen smoothly and in a hidden way.

Meeting a Customer’s expectations does not equate to exceptional service, or to ‘wow’ from a Customer perspective. Doing your job is simply perceived as average, even though there is no idea about what constitutes great service. What is important is the perceptions of a company, and what friends or social influencers feel. Their opinion will outweigh the marketing message that a provider purports to represent.

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: 138

“The Customer doesn’t care where the responsibility within the organisation sits.” - Bert van der Westerhuisen, Executive Head: Commercialisation “That’s something from a business model point of view, we as a company have decided that’s our best distribution channel at the right price, etc. So we need to take responsibility for that. We can’t step away say, you know, they are franchises and actually they are not really (our company). We have to embrace it and say, they are our face.” - Lynne Morrow, Executive Head: Credit and Risk “He needs to find out and call you back. The whole company is responsible for the Customer Experience and therefore the whole company sort-of has to be the enablers to enable your front or your Customer facing staff to render a good service. So therefore the whole company needs to be sensitised and understand the impact they have on one another.” - Lisa Colins, Marketing Manager: Products

4.7.11 WHERE CUSTOMER EXPERIENCE STARTS AND ENDS Customer Experience begins before a Customer signs up. It starts with the brand perception, with word-of-mouth recommendations, with needs discovery and with marketing communication. After that, the ease of process and the performance and reliability of services play a role. In Mobile Telecommunications, it is network performance and reliability as well as the speed and performance of support and self- help, that constitute the post-sales Customer Experience.

The organisation should take care to use the appropriate methods of attracting Customers. Poorly designed leaflets distributed at a traffic light will not attract a higher LSM Customer. Customers who have left your company keep doing word-of- mouth, potentially against your brand. Every business decision and process needs to support the intended outcome of Customer Experience for the Customer.

Evidence from the interviews conducted support the arguments as follows: “Your experience with a specific organisation or brand probably starts before you become a Customer because they’re very much you are guided by the company’s brand stands for and what other people tell you of their brand. So do they promote the company or the services and what do they think and feel about it? And then based on that, an informed Customer will then make a decision to start using the company services. So yes, it starts probably before you are a Customer. And I think from a cycle perspective, for sure. When you are a new Customer, there are certain things that are required and maybe after a period of time, the Customer’s demands become less because they now understand the products very well and has its needs fulfilled… So does the Customer choose you, based on what do they choose you and when they try to acquire a new product, how easy was it. How friendly was it. How well does it work? When does it end? I don't know, probably when the experience becomes so negative that the Customer chooses to rather go somewhere else. So it does have a cycle… first it's the brand affinity. So that's the first thing. And then once a Customer is aware of the brand, then the product side comes into play. So now that I see a specific company, I'm aware of them, let me see

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what do they have to offer and I will either start using their products instead of another supplier, or they might actually then make me aware of products that I'm not getting from existing supplier and then I will start using new ones.” - Bert van der Westerhuisen, Executive Head: Commercialisation “Customer Experience with the brand starts before you have a relationship with, with, with the company because you start making your choices based on what people tell you… So, your advertising that you do, your marketing that you do, your, what the message that you give to your Customer long before he’s got a relationship with you is, already gives a guy his impressions about your brand and about your specific company… it ends the day that the Customer says I, sick of you and I leave and I think it doesn’t actually end there because that same Customer has just left you is still influencing your reputation and you image out there in the market place. So, it ends after a Customer has left you.” - Joe Clark, Executive Head: Systems “It starts basically with, with what I see and hear and think and feel about the company. What I see in the media. And then when I start interacting with them, when I request a service. When I have a problem with a service. When I have a billing issue. Yeah, it, it's, it's a continual thing. Its loops of interfaces that you have with the company… I don't think it ends. Well, if you get to the point where you are no longer interested in the service, like I am with another cell phone provider, I don't care what they come up with, I'm cheesed off with them and they can do as much advertising as they like. Maybe if they come up with a dirt-cheap offer in 10 years, maybe I’ll be less angry and I’ll take the offer, but it's not a finite thing. I don't think it's a, yeah. It's a continual thing.” - Lisa Colins, Marketing Manager: Products

4.8 RESEARCH FINDINGS ON THE STRUCTURE OF BUSINESS UNITS Structures change over time. Traits of the Value Chain can be seen in structures. Addressing particular market segments can also be seen – albeit with some lack of clarity. It’s dynamic, and changes to respond to Customers and market conditions. The aim is to improve, to create synergies, and to smooth out the Value Chain. In reality, it may create silos, empires, politics, red tape and place the expensive cost of ‘ego’ onto the balance sheet. This slows down an organisation.

Customers do not want to see the various silos in the structure. The Customer wants a single point of contact, and a blended approach that ensures that he gets what he wants at an acceptable cost. It is Value Chain efficiency and superb Customer service execution that respond to his changing needs. Companies are grappling with a change to a market segmentation approach.

The following was recorded as responses from the research interviewees: “Initially we based it on the traditional textbook Value Chain setup and then at a later stage we decided, okay, perhaps we should align more with, you know, the organisation as a whole, so we 140

moved a bit more to the, to an organisational structure rather than Value Chain… and in more recent times, I think that we’ve, we’ve now definitely moved to responding… moving toward Customer needs, Customer wants, what the Customer dictates. Because even within our own areas, we, we sort-of are in a constant state of flux. We change. You know, if it doesn’t work. If our Customer tells us, hey, you know what, this is not working, then we boot it and we try something new based on what the Customer has given us as feedback.” - Brandon Oliver, Manager: Retail Support “From a structure point of view, I do think we have the right structures in place in order to create an excellent Value Chain. Yes, one could argue that there's too much beauracracy and a lot of headcount within those structures that don’t need to be there but that where the speed factor comes in because you actually have too many layers within your structure that actually slow it down and the structure could actually be streamlined… Leadership comes from the front. Not from the top. Rather out in the front then you are leading. If you are on the top you are not leading… if you are on the top you are just adding expense. You are not adding value. And you are affecting the Value Chain. So I think that’s, that’s very important. Having ego on the balance sheet is the most expensive thing that you could have in every business… In the old days, we just went and did it. Now your margin wasn’t a problem so you just went out and did it and tried things and it didn’t really matter because you had enough turnover - turnover which covers a multitude of sins, so I think you could just go and do it and I think that was part of the success today - we, we got older. We got fatter. We got lazier. So we are not as nimble as we were and we don’t do things anymore and we are too worried about how much it is going to cost. Cost is important but not at the expense of the Value Chain - giving the Customer what he wants when he wants it and as you get older I think you just get slower at it and then you become lunch… you can’t be servicing your Customers with a bloated organisation because the race, the Customer service is about the race to get to the Customer first. Give him what he wants when he wants it - that’s a race and you can’t be overweight in that race.” - Andrew Vosloo, Executive Head: Logistics “If your structure does not talk direct to the Customer, you basically not thinking about your Customer when you are compiling your structure then you are still missing the boat… what we are doing is trying to ensure that we speak more to the Customer than having structures where we are identifying to ourselves what. Everything is more Customer based. So our segmentation, we are gonna have groups that strictly deliver X product for the Customers… at some point I even remember in Marketing we used to have prepaid group of people and your contract and so forth. Now, if, if, if you do that, to me personally, I’ll say it's not the right thing. Number 1 - you are gonna have different satisfaction, Customer Experience levels based on who offers what. So your company won't have one image.” - Mandla Qunu, Manager: Engineering

4.9 RESEARCH FINDINGS ON STRATEGY The aim of the questioning of strategy is to assess the perception of the level to which strategy is used to direct work, the Value Chain activities, and Customer Experience. Important themes for strategy include: • Assessment of on-going strategic initiatives. • The relationship between strategic initiatives and company strategy. • How strategy and Value Chain interplay. • How strategy and Customer Experience interplay.

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4.9.1 ASSESSMENT OF STRATEGIC INITIATIVES THAT ARE IN IMPLEMENTATION Strategic initiatives exist within companies in order to achieve certain goals. Work done on a daily basis is aligned to overall company strategy and defined KPIs. Downward cascading of strategies and subsequent alignment of work reduce autonomous operations. It places the common ‘goal’ in front of everybody. Some work does happen that is not aligned to strategy. Work in some business functions is strategic in nature, while other strategies are operational.

There are some problems that result from poor strategy, or poor implementation of strategy. When strategic priorities and direction change, resources need to be adjusted and work changes. The incorrect strategic approach for a particular company or market, can result in failures. Similarly, having a particular strategy, but not following through on correct cascading through the Value Chain, creates disconnects between the mission and the visible processes / outcomes.

Supporting evidence can be seen from the following quotations: “There are quite a few. You know, basically we, we, it gets cascaded from our executive director level, down to managing executive and through the chain down to us at a tactical level -because that’s where I see myself, it is tactical, I'm not part of designing those strategies, but I'm, I'm there to receive them, understand them and then convert them into work.” - Brandon Oliver, Manager: Retail Support “Yes. You cannot work autonomously. The company has strategic plans and strategic ideas in place and if you work autonomously it won't work… a lot of the time we clearly what the strategic focus is but there’s, there are elements that creep In that are not on the strategic, not seen to be strategic but yet we still do them.” - Sue Gad, Consultant: Product Management “Absolutely. What our, in our environment in particular, our strategy is operational. So that makes it very easy.” - Cheryl Stillman, Manager: Customer Experience “There's one technology that we are trying to implement right now that was deemed critical and we had to drop almost everything that we were doing and focus on that technology or that product purely because it worked in Europe. And almost when we were about to launch it and we decided to can it because the market was not responding positively. So we are now reverse engineering where you engage on that process and waste too much time and resources and later were like no, no, no, it's not gonna work whereas we could have done it the other way round. So in that case, we were trapped by technology and the fact that strategy-wise we almost, we had forgot to go back and say, who is our market. Does it mean that something that worked in certain countries is it automatically going to work in our country as well? So yes, you've got to tie that to your strategy big time.” - Mandla Qunu, Manager: Engineering

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4.9.2 LINK BETWEEN STRATEGIC INITIATIVES AND COMPANY STRATEGY The aim of strategy is to bring value to stakeholders. For Customers, it is about getting more, while for the company, it is about building for future revenue opportunities. Strategic planning is essential for sustainability, or the organisation will fail and shut down. Understanding the market, catering for the needs of the market and channelling resources towards the activities that support the strategy will happen in the event of strategic planning. An example of activity prioritisation occurs when a worker, or team need to decide between two tasks. Typically, the task that supports the overall strategy should be prioritised, and resources need to be channelled towards that task.

Gaps exist in some cases – not everybody is aware of what the strategy is. In some cases, people are unable to connect the work that they do to an overall strategic initiative. There’s definitely an awareness of the fact that work needs to support the overall strategy, but no plausible hypotheses were made on why the strategy may be hidden, or not well understood. However, in the downward cascading of strategy, it is the responsibility of the tactical managers to translate the strategies into tasks.

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: “We are responsible, as I said, to sort of make work of those strategies… a development area within my own division that I'm going to focus on over the next 6-12 months, is bridging the divide between the strategy and operation or day-to-day operational tasks. I think that there is, within my area, a, a, a fairly good understanding of the strategy but connecting that to the on the ground helping the Customer - how does that relate to me and how am I contributing to those things… the obvious response for a Walk-In Customer Care would be, but we don’t generate revenue. Okay, so what about when you activate or you encourage a Customer to take up a data bundle for example… if you have no corporate strategy, I don’t know what you are doing. I'm not entirely sure if you know where you are going, or what you intend to do with the organisation, or how you intent to contribute meaningfully to anything. You might have a good spell and after a couple of years you shut down. So it’s integral to any organisation… when you’ve done your market research, once the marketing team has gone out in conjunction with the CEO or whoever of the organisation and they come back and they talk about right-this is what's out there, they’re gonna go through the whole process. SWAT analysis. They are going to define their markets. They are going to define the market penetration, what's the plan going forward. So, without that happening at the very beginning, at the very inception of an organisation, I don’t think an organisation’s gonna last very long.” - Brandon Oliver, Manager: Retail Support 144

“The organisational strategy is very much at this stage based on future revenue opportunities. So where the executive members, where they see the future revenue lies and then it's a matter of channelling the resources in order to support those specific objectives. And yeah, so at this stage it's not really done per segment or so. It's still very much based on revenue potential and value drives company strategy… not every person in the organisation has the insight and the understanding of the strategy and the different objectives etc. However, the line management of the different areas have a responsibility to know which strategic pillars I can influence and then for those ones they need to make it very tactical and operational within their areas… it means that on an operational level that when you have to choose between 2 tasks, you first do the one that's gonna support the data product versus maybe the voice product or the content product.” - Bert van der Westerhuisen, Executive Head: Commercialisation “I've done some studies through the organisation, the strategy has never been that much exposed and most people work, including myself, until late last year I started to find out what the strategy is in the organisation. And even that, it was not conclusive. It was only done by certain people dealing with strategy… So even at that level we didn’t know what the strategy was, we were just working.” - Mandla Qunu, Manager: Engineering

4.9.3 LINK BETWEEN STRATEGIC INITIATIVES AND VALUE CHAIN The Value Chain is seen as fundamentally contributing to the strategic objectives. Each autonomous division is contributing in their area of speciality towards enablement, efficiency, process or manufacture, thus supporting the strategy. Strategy needs to be dynamic with constant cycles of definition, implementation, measurement and refinement. Inputs and business realities shape the future evolution of the strategy. This does not come without challenges – poor implementation of a strategy, or poor governance of supporting behaviour produces contrary outcomes.

Evidence from the interviews conducted support the arguments as follows: “In terms of obtaining new Customers, going into new markets, it’s all got to be taken into account, so yes.” - Lynne Morrow, Executive Head: Credit and Risk “I think it does because at the end of the day it’s going to shorten the time it takes for people to make decisions that will add value.” - Sheri Mason, Specialist: Business Intelligence “Your strategy, to start with, it's got to be very dynamic. You can't have a static document sitting out there in the shelves. It's got to adapt. You can have your key things but your strategy must adapt to, to, to, to new things… there's nothing as bad as having a great strategy and with poor implementation. For example, if the strategy talks about cost saving and yet you see people are spending unnecessarily without doing proper research and so forth, just flooding products, you end up not following that strategy at all. So the implementation of that strategy is what is key in terms of are people actually doing.” - Mandla Qunu, Manager: Engineering

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4.9.4 THE UNDERSTANDING THAT CUSTOMERS HAVE OF STRATEGY During the strategic planning, even during the initial implementation of the strategy, Customers are not informed about the strategy. When the strategy is implemented, Customers will not be communicated to in a way that says… “The strategy of our Mobile Telecommunications company is X”, but they will, or they should feel the effect of the strategy emotionally. The implemented strategy should invoke positive emotions that confirm the suitability of the company in the marketplace.

The following was recorded as responses from the research interviewees: “I don’t think Customers have had, had, had exposure to that. I think they will. We’re, we’re kind of in infant stages but I would say that in about 6 to 7 months, once we’ve operationally sorted out a lot of things, operationally sorted out some of the things in order to achieve the overall strategy, then Customers will become more aware of it… at the end of the day, even the Customers who don’t even as a single make up much of the revenue, but as a group they do. So we do have to consider that, in terms of the service delivery strategy, which is why segmentation is important, and not only based on value the Customer is giving us, but in terms of that - education and language. Those things have to be considered for servicing them… They must feel it. At the end of the day, you know, you are actually right. It is not important that they give it a name. But when they walk away, they have an emotion about it - because that’s what we are, we are human beings. So when they walk away, they have an emotion. This emotion must be a positive one and not a negative one which means that they will stay with us or hopefully bring more people on board because they are happy with us.” - Cheryl Stillman, Manager: Customer Experience “Yes, definitely because you need, you need to assess what happened previously, what your Customer Experience was as well as predicting or being a visionary into what your Customer wants or what your Customer needs to make money and that has to do with your Value Chain. Without your Value Chain you won't be able to get there because you won't be able to supply for your Customer’s needs.” - Sue Gad, Consultant: Product Management

4.10 RESEARCH FINDINGS ON THE INTERPLAY BETWEEN THE VALUE CHAIN, CUSTOMER EXPERIENCE AND STRATEGY The strategy, and the supporting Value Chain should provide for Customer needs, create happy emotions and create loyal Customers. Predicting, and providing for evolving Customer needs are part of the company strategy, and are carried out by the Value Chain, and should create a positive emotion (Customer Experience) of interactions. Measurement, quality, continuous improvement, thorough analysis, 146

change management, listening to your Customer, and evolution of the strategy are important factors in crafting strategy and in performing Value Chain execution.

Strategy is the destination, and the picture of success. Value Chain is the mechanism to ‘transport’ the organisation towards the destination. Customer loyalty through a positive Customer Experience is the outcome. Profit is the result. This creates a strong link between strategy, Value Chain and Customer Experience. The role of strategy should be to define why the company exists, and which products are going to be developed that are relevant and profitable for different Customer types / groups.

Supporting evidence can be seen from the following quotations: “Yes, definitely because you need, you need to assess what happened previously, what your Customer Experience was as well as predicting or being a visionary into what your Customer wants or what your Customer needs to make money and that has to do with your Value Chain. Without your Value Chain you won't be able to get there because you won't be able to supply for your Customer’s needs.” - Sue Gad, Consultant: Product Management “I think, well, something else that we didn’t touch on, you know, is the whole lean 6-sigma methodology of measuring, improving, you know, I think constant change. Because you might have frameworks in place that was placed there for certain strategies or structures but if it’s not reviewed, those frameworks and strategies has not impact. So it has to be reviewed the whole time. So I you are looking at Value Chain and what you’ve got in place, it needs to be changed. But in order for you to be able to understand or identify the changes required you have to measure. So I think it’s a constant chain of change and measuring and re-engineering… change management would be a very big part of that and that’s why it’s important to understand what is the Customer saying. So if you are changing for the better because of inputs from the Customer and you are making it better for them, I don’t see that you world negatively impact them. But yeah, if you didn’t do the proper research, that’s why the sources - why are you making the change. So the reason for your change should be analysed - researched properly so the homework needs to be done before you make the change.” - Sara Bunting, Specialist: Contact Centre Processes “Value Chain and Customer Experience and strategy? 100% they are interlinked, yes.” - Cheryl Stillman, Manager: Customer Experience

4.11 RESEARCH FINDINGS ON BRAND ENGAGEMENT AND A PERSONAL CUSTOMER PHILOSOPHY A part of the interviews was dedicated to gathering perspectives on the elements of Brand, and where relevant, and collect a personalised value statement on how working with customers is practised by the interviewee.

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4.11.1 WHERE BRAND ENGAGEMENT STARTS AND ENDS Brand engagement, or the Customer life cycle, starts with awareness and never really ends until the organisation shuts down. From the moment a brand is launched, a brand perception is created and needs to be managed throughout the Customer, or firm’s life cycle.

The following interview excerpts provide evidence to support the claims and conclusions drawn in this section: “It’s got to do with all the marketing, so the first time I actually see something about a specific company or a specific product then go in, look at the actual product, read up about it, buy it, do I retain it until I have used it up... Then I don’t want it, but it well and that you can’t say really end. It can be a latent response because I might not want to buy anything else from that specific supplier, but the in a year’s time, or in a couple of months’ time they improve their product and they are showing me that they are meeting what I need and what I want. They are showing me they have got a conscience and I’ll go back to that… Even though you have lost your Customer, they are not using your product, the experience will continue until you as a company end. - Sue Gad, Consultant: Product Management “I would say from the moment that he walks into a store to start up a contract, or buy a SIM card… or it could also be, sorry, television, marketing, advertising, visually seeing, seeing things like the supporting of the various sports. Could be any of those.” - Cheryl Stillman, Manager: Customer Experience “With the launch. With the name launch. With the company launch. When you hear about product x and how they portray themselves. How they present themselves. How they, yeah, present themselves to the public. And the products that they present to the public. So when do I engage with them? From the very first moment they open the mouths or advertise their company or their brand… It doesn’t (end)…. they can try to do something to make sure that it's always positive. But Customers being Customers and people being people, I don't think it is possible that you will always have positive feedback. There will be negative feedback and it's not always a bad thing to have negative feedback.” - Monica Louw, Customer

4.11.2 MY PERSONAL PHILOSOPHY IN DEALING WITH CUSTOMERS Firms should not try to be all things to all people. It is not viable. Spend the time in understanding what Customers need, and help them. Provide them with open, friendly, understandable communication that is targeted to their needs and understanding. Enable them and empower them to do as much as they can for themselves. The firm’s approach should be targeted to what is relevant for the Customer.

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Evidence from the interviews conducted support the arguments as follows: “There’s a saying that the Customer is always right. Personally, for me, that’s not my philosophy. I think you as a service provider should advise the Customer on what's the best for him, but then you should really have their interest at heart… you know what is best for them because at the end of the day you understand, you know, but that’s why you should understand the Customer need. Because the Customer may phone in and ask for something but he’s not sure what he is asking for… So trade turnover there is, yea, it’s quite severe. I think that is where communication from the company, communication, training and your systems that is available to these agents to service the Customers. So that that is why I think the technology part has become so important in our day and age. Knowledge should be accessible at their fingertips - as much as self-service to the Customer, empowering our Customers more and more so that they can get what they want at the touch of the button so I think more and more I think our technology has to work better for us in order to get that better Customer Experience.” - Sara Bunting, Specialist: Contact Centre Processes “I think one of the other cellular operator have got a more effective approach because they have more AD budget because if you want your AD to be in all 11 languages you are gonna need 11 translators. So the approach that we are following up to now - which I don't think is effective, is more or less a shotgun approach and more-or-less it's in English, we put it out there. If you're lucky we do Afrikaans for the rapport as well. It's a shotgun approach, look we're big, everyone knows us, here our message. I think we need to move towards speaking the language of the actual market and being where the actual market, market is, moving closer to your actual market. You cannot get away with just being in the Sunday press and think you are going to grab the market.” - Lisa Colins, Marketing Manager: Products

4.12 CONCLUSION Chapter 4 has assimilated and documented the views and interpretations of the interviewees on the research elements under analysis. The research methodology has been followed and executed though the selection of a purposive research sample, and the executing and transcribing of the semi-structured interviews.

The researcher has analysed and coded the interviews in accordance with Content Analysis principles. This has allowed several central themes to arise from the interviews. These themes have been summarised and supported with quotations.

Importantly, Chapter 4 has ensured that the link with the research objectives is maintained, and that research trustworthiness is maintained by methodically executing the specified research methodology.

Chapter 5 will dissect the research findings in Chapter 4 by drawing a parallel with the academic findings in the Literature Review. This is a process of confirming

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perspectives and cementing theory, or highlighting gaps and establishing new fundamentals.

As per the researcher’s personal objectives as specified in Chapter 1, the intentions to both increase personal knowledge, as well as to contribute to scientific knowledge, exist. Chapter 5 enables this objective to be attained as the chapter highlights significant insights between previously understood theory and knowledge against the empirical findings of the world under research scrutiny.

Methodologically, there are comparisons drawn for congruence and for divergence between the Literature world and the Empirical research world of this study for the three pillars of Telecommunications, Value Chain and Customer Experience. There are insights drawn from the resultant discussion, and interpretations are made that highlight, or explain these findings.

Insights have value, and can be used to make organisational improvements. Suggestions are also documented on the practical applications of the insights.

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CHAPTER 5 DISCUSSION EMERGENT FROM THE STUDY

5.1 INTRODUCTION Chapter 4 documented the raw empirical findings of the research study. This was done by analysing the qualitative interview transcripts to identify and code the central themes – or the essence of the statements made by the research participants within the research context.

The research objectives were restated for the purposes of clarity. Thereafter, the steps taken in implementing the research design, as specified in Chapter 3, were confirmed. The result of executing these steps, is a summary of the research themes and indicators for which research participant sentiments have been documented. Each indicator has been specified with an interpretive summary, and has been supported by pertinent direct quotations from the interviewees.

The aim of Chapter 5 is to assess, compare and synthesise the research findings of the research study with contemporary scientific / academic literature and theory. This will be executed in a way that assesses the similarities and possible differences between the research findings and authoritative academic literature sources on the subjects under research scrutiny.

Chapter 5 comprises the following aspects: • Compare the pertinent research findings with seminal scientific literature on the areas under research. • Highlight areas of congruence or possible divergence between research findings and scientific literature. • Document the emerging trends that arise during, and after the data gathering and analysis.

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Throughout this chapter, convergences will stem from areas of common research between the academic / scientific literature reviewed and the qualitative interviews conducted with research participants. Conversely, areas of divergence between literature and research findings are highlighted. A discussion on insights and interpretations follows hereafter.

5.2 TELECOMMUNICATIONS INDUSTRY This discussion highlights the findings of the analysis of the literature review in Chapter 2 when compared to the empirical research findings in Chapter 4. Focus is on the Mobile Telecommunications Industry.

5.2.1 CONGRUENCE BETWEEN SCIENTIFIC LITERATURE AND RESEARCH FINDINGS OF THE TELECOMMUNICATIONS INDUSTRY The literature review (section 2.6.1) and research findings (section 4.5.1, 4.5.2, 4.5.5) are consistent in finding that the Telecommunications / Mobile Telecommunications Industry has fundamentally impacted people’s personal and business lives.

The literature review (section 2.6.2) describes the evolution of Telecommunications systems to bring capabilities that Customer’s value. These include improvement of communication, social integration, impacts on education, impacts on agriculture, as well as upliftment of GDP. The interviewees also agree that the industry has evolved (section 4.5.1), but the narrative revolves around the South African story of Mobile Telecommunications. This centred on unprecedented Customer growth, the freedom that Mobile Telecommunications provided to Customers who really were just happy to be connected and mobile through simply accepting what they got.

The interviewees felt that the Telecommunications industry evolved from the beginning (section 4.5.1) where the company who rolled out network and services fastest was the leader, where products were expensive, and where technology was not well understood. 152

Evolution continues (section 4.5.1) with Customers being more enlightened about choice as well as cost vs. value. Operators are responding to changes in the marketplace (section 4.5.2) in both appropriate and inappropriate ways. Theory concurs, (section 2.6.2) describing some of the benefits of Mobile Telecommunications; cheaper to install, offers mobility and is more beneficial for use. Coupled with this are challenges such as pressure on Customer growth (section 2.6.3) and disintermediation through ICT convergence and open-access business models (section 2.6.3).

Challenges identified by interviewees (section 4.5.2) include comparing of costs across international markets, high market saturation, increased speed of launching products, the battle for market share, price wars, and complexity in both technology / products and marketing communication. Literature reveals that Telecommunications Value Chains evolve as technology and disintermediation occur (section 2.4.2), with operators needing to find new sources of differentiation through partnerships, collaboration or value propositions.

The literature review specifies how mobile phones have played a pivotal role in the lives of Customers (section 2.7) through enabling personal communication such as calling 911 in emergencies (section 2.6.4), business transactions and financial transactions (section 2.6.4). The interviewees felt that there have been changes driven by Customer need, market competition and technology advancement (section 4.5.4) – albeit it is unclear which has been the main driver. Customers have historically displayed a level of unconscious ignorance around Telecommunications and mobility needs (section 4.5.4), however, when Customer understanding of the technology occurs, or the enabling value of Telecommunications is understood, then the uptake and demand increase.

Interviewees felt that the advancements in technology and higher uptake were accompanied by a Customer’s expectation of decreased cost (section 4.5.4). Literature specified that changes in Customer needs presented challenges to the

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industry (section 2.7), such as decline in core revenue streams, falling perception of value in Customers’ eyes and rapidly evolving Customer preferences.

Literature notes some future trends for Mobile Telecommunications (section 2.6.2) that include a focus on Green (technology for efficiency and environment) as well as ubiquitous 4G and 5G for data-hungry Customers. Interviewees supported a view of a mobile phone that will become more commoditised and ubiquitous (section 4.5.5) and will integrate more human life functions in an automated way.

5.2.2 DIVERGENCE BETWEEN SCIENTIFIC LITERATURE AND RESEARCH FINDINGS OF THE TELECOMMUNICATIONS INDUSTRY Multiple converging technologies make up a Telecommunications system, including towers and transceivers (section 2.6.2). Mobile Telecommunications specifically, transmit signals over free space (section 2.6.2). Interviewees did not provide opposing perspectives per say. This question was not covered in the interviewees. From a Customer Value perspective and looking at Customer Experience through a Value Chain delivery mechanism, it is less important ‘how’ the technology works and more important that it works effectively to enable the Customer to benefit.

An important difference between literature and interviewee perspective is the impact of advancing technology. Literature (section 2.7) mentions “Firsts” by the South African Telecommunications operators, attempts at differentiation as well as continued investments (section 2.7) in infrastructure, both LTE and 3G, while Telecoms services have become commoditised as Telecommunications operators have become enablers for digital lifestyles and business (section 2.4). By some contrast, the interviewees felt that the industry should focus more on delivering Customer service and innovation (section 4.5.3), specifically innovation that reflects understanding of market characteristics for the development of suitable and relevant products. Furthermore, the industry should bundle and position differently to up-sell and cross-sell. 154

Literature furthermore specifies that technology enables advantages (section 2.7), and that innovation in products for market competition is a strong trend (section 2.8). Interviewees felt that the industry should focus more on loyalty and giving back (section 4.5.2) and that operators are grappling with a dumb-pipe syndrome where they provide the access pipe, but are excluded from providing the content (section 4.5.3). This puts pressure on resources, pressures on revenues, highlights the problems of a technology-led approach, and reflects ever-increasing market disintermediation.

5.2.3 INSIGHTS AND INTERPRETATION REGARDING THE TELECOMMUNICATIONS INDUSTRY Some of the diversions in perspective arise from a ‘mismatch’ in focus area and objective between the literature review and interviews. The literature review focused more on the history and technical aspects of Telecommunications and the South African Mobile Telecommunications context. The research interviews focused on understanding the evolution of the Mobile Telecommunications Industry from the perspective of the interviewee.

The research shows that literature as well as the industry, places significance on the advancement of technology with views such as deregulation bringing liberalisation, (section 2.7) and technology advancements enable disintermediation of services (section 2.7). Reality, as well as the research results has shown that advancing technology in the absence of market understanding and relevance is problematic and has seen some failures of great technology that did not succeed in the marketplace. (MMS and SPOT Wireless camera are South African Mobile Telecommunications Industry examples.) The interviewees believed that the industry has developed products in response to market need, as well as developed products for which there has been no market need and waited for understanding to build (section 4.5.4).

Overall, South African Mobile Telecommunications operators are in an interesting, challenging period of time. It is in an era of management changes at CEO level 155

(section 2.8), changes in government (section 2.8), and challenges with the regulatory processes of spectrum allocation and digital migration as well as constant price wars (section 2.8). Competition exists in product offerings; response to market demand and the competition for Customers (section 2.7). Firms can look to compete more effectively through business model design and process efficiency / execution (section 2.7). Although the South African market is saturated, data usage on smartphones is increasing and there are still opportunities such as with financial services products (section 2.7).

Interviewees felt that companies are responding to saturated market demands (section 4.5.1) with product offerings, technology advancements and price reductions. More still needs to be done (section 4.5.3) such as correct execution of processes against the correct Customers, correct targeting of offers, and smaller and more focused business units to analyse and deeply understand market segments to develop relevant products. This signifies a business model change from a product- led to segment-led market approach. Operators have lowered prices, but this is not sustainable. Low cost must be coupled with good service to be impactful (section 4.5.7.2).

Interviewees also shared perspectives on growth, operators who can offer a full basket of telecoms services on a single invoice, will own the Customer. This may come from horizontal and vertical integration of value streams (section 4.5.6.1). Further, growth will come from putting the Customer at the centre of the organisation and making decisions to benefit the Customer in innovating, simplifying, repackaging and building the Customer understanding of products and services (section 4.5.6.1). Growth will also come from churn management and a higher level of quality in network and service delivery (section 4.5.6.1).

Interviewees felt that operators should measure the right metrics that matter to the Customer, should have policies and processes to benefit the Customer and develop

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services that are segment relevant, without alienating other segments (section 4.5.6.1).

5.3 VALUE CHAIN This discussion highlights the findings of the analysis of the literature review in Chapter 2 when compared to the empirical research findings in Chapter 4. Focus is on the Value Chain framework.

5.3.1 CONGRUENCE BETWEEN SCIENTIFIC LITERATURE AND RESEARCH FINDINGS OF VALUE CHAIN The research review indicated that Value Chain’s evolving (section 2.4.2) with advancing technology and disintermediation, resulted in a constant reconfiguration of the Telecommunications ecosystem. This shows itself with the emergence of specialist suppliers of research and development, as well as the higher cost of network maintenance in the face of service commoditisation (section 2.4.3). Operators need to find new sources of differentiation through partnerships / collaboration and value propositions (section 2.4.2). Research concurs that the industry has / keeps changing (section 4.5.1). Additionally, the market is saturated and the industry is responding to market demands through product offerings, technological advancements and price reductions (section 4.5.1).

The role of the Value Chain is seen by research participants as an important mechanism to provide a Customer with what he wants (section 4.6.2) where he wants it, and therefore, there is evidence of the Value Chain activities within companies (section 4.6.2) through a strong / direct link to product creation and distribution. Literature specifies that the Value Chain supports the capability to develop and commercialise products (section 2.4.2).

Literature and research findings are similar on the role and ability of the Value Chain to create value for a Customer through solving problems and creating products that are vehicles to transfer value (section 2.4.4). A Value Chain approach clarifies

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strategic direction and identifies components and prioritisation on activities that add value (section 2.4.4). This allows a firm to focus on common goals and to roll out a strategy for sustainable, market-focused collaboration (section 2.4.4). Research participants indicated that multiple Value Chains exist per divisions with inputs and outputs that affect the quality that is delivered to the Customer (section 4.6.2). The Value Chain must provide the Customer what he wants, and the Value Chain is evaluated and changed as needed to provide for the needs of the Mobile Telecommunications Industry (section 4.6.2).

Literature and findings are consistent in the Value that is increased at each stage of the Value Chain. The generic Value Chain model describes activities and relationships between activities to develop products and deliver value to Customers (section 2.4.2). Value Chain builds linkages between suppliers, production, Customers to keep Customers happy (section 2.4.6), and deliver Customer Value (section 2.4.6). Participants felt that the Value Chain is the mechanism to deliver at least the minimum (section 4.6.4) and should add “more” because doing your job does not automatically equate to value. The core product may be important to the Customer, but adding value sits around peripherals and is shown in how a Customer is supported around his product purchase. Doing this helps create sustainability and identify the company to the Customer.

Literature specifies that there should be a strong link between business strategy and providing value to Customers and business owners, as decreasing costs or production in isolation may lead to delivering less value (section 2.4.6). Participants felt that everyone needs to be involved in the Value Chain, have knowledge of the bigger picture, and ensure that every touchpoint is available to the Customer when he wants it (section 4.6.4).

Participants defined value as giving addition – over and above the core service, and as having the right product at the right time to enhance the life / lifestyle of the

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Customer (section 4.6.3). This is congruent with theory that specifies that Value Chain exists to deliver Customer Value (section 2.4.6).

Value Chain helps firms manage their competitive position. Better Value Chain execution delivers better innovation and higher quality that results in better performance (section 2.4.6). Participants felt that benefitting the Customer also benefits the organisation (section 4.6.8).

Value Chain is linked to Customer Experience. Participants felt that organisations should do what it takes to make the Customer happy, irrespective of “compliance” with Value Chain as the Customer does not know about the Value Chain or understand it. The Customer expects product or services when he wants it (section 4.6.8). Participants felt that Value Chain is not implemented as per generic Value Chain theory, as it is customised to suit the industry, the market, as well as strategic focus (section 4.6.8). Theory specifies that the way the Value Chain is executed invokes an emotional response for the Customer – the “Customer Experience.” An improvement in Customer Experience brings an improvement in Customer lifetime value. Simultaneously, an improvement in efficiency results in lower costs to acquire, support and retain, so that there is a higher loyalty, advocacy and tenure (section 2.4.5).

Participants felt that any touchpoint may delight or frustrate the Customer (section 4.6.6), thereby impact the Customer perception on where he finds value. Although some Value Chain activities or business divisions are hidden / background and add less value, they all need to contribute as required (section 4.7.6). Theory supports this view that some supply chains limit the introduction of new products and make it difficult for the Customers to acquire products (section 2.4.6). Supply Chain management aims to meet demand and contain costs, while Value Chain aims to deliver value (section 2.4.6). However, organisations rarely take a Value Chain approach to managing business (section 2.4.7).

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5.3.2 DIVERGENCE BETWEEN SCIENTIFIC LITERATURE AND RESEARCH FINDINGS OF VALUE CHAIN Some of the divergence between the Literature Review and research findings is attributed to methodology and scope. The literature review included a study on some of the preceding principles and theories that gave rise to Value Chain. This includes the work of Adam Smith: Scientific division of labour, Frederick Taylor: Scientific management principles, Henry Mintzberg: Strategy and Michael Porter’s own work on Strategies for differentiation. These elements were not included in the research questions from a methodological perspective, as the researcher believed it would be more important and beneficial to understand the interviewees’ perspective on the definition and implementation of the Value Chain within the organisation.

Literature has positioned Michael Porter’s Value Chain framework as a way to find strategically relevant activities that a firm can analyse to find competitive advantage within an industry (section 2.4.2). Porter’s model is a firm-level model reflected as a process to depict an approach to implementation of a strategy to uncover and exploit sources of Customer Value. Value Chain is a combination of primary actors who perform functions – input supply, production, retail and secondary actors who perform support functions – transportation, brokerage, service, processing that add value and cost (section 2.4.6). Research interviewees did not view Value Chain similarly – the framework was described as a process to transform inputs into outputs, as a collection of elements that makes a company successful, or for its ability to add direct or indirect value to a Customer during the Customer life cycle. Value Chain is not well understood from a theoretical perspective (section 4.6.2).

Theory dictates that value comes from performing a value analysis of the supply chain (section 2.4.6), whereas interviewees believe that a focus on the Value Chain leads to managing efficiency. Focusing on the Customer’s experience of Value Chain leads to better understanding of the Customer and designing of relevant products (section 4.6.8). Value Chain impacts Customer Experience in product relevance,

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product quality, speed to market and price to market, so a Value Chain requires all elements to work and for the Customer to be buying (section 4.6.3). If the Customer is not buying, the Value Chain is ineffective.

A Customer’s concern is getting what he wants when he wants it. Issues with the Value Chain such as missing information, lack of cooperation and poor infrastructure (section 4.6.2), indicate that optimisation and coordination are needed to reduce the chaotic handovers between Value Chain activities. Problems with supply are felt by the Customer and he takes his business elsewhere (section 4.6.3). As per theory (section 2.4.2), better execution of the Value Chain brings better competitive capability to deliver value to Customers. This value comprises tangible and intangible benefits that enhance the Customer Experience.

Research participants shared the view that business functions and processes like support, are not part of Value Chain, but are hygiene. They are important if the company gets it wrong (section 4.6.1). Activities should work together smoothly and the business needs to add value to the Customer or risk having Customers leave for a competitor (section 4.6.4). Smart segmentation impacts the definition and delivery of value, especially since value is contextual and evolves as Customers’ maturity of use of Telecommunications services evolves.

Research participants felt that Customers do not want to know about, or feel silo’ed functions of an organisation, they want to see it holistically. The company is a single brand and the details should be hidden while the company functions in a well- integrated manner that provides fast, quality resolution. This is not Customer ignorance, it is a purposefully required abstraction. Nevertheless, the Customer Experience at any touchpoint gives an indication of the structures, processes and systems in place to service Customers. Importantly, actual experience overrides any external factors or information to Customers – who are fairly tolerant towards company functions. Customers do, however, apply a sterner attitude when a service failure is experienced (section 4.7.1).

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According to participants, the Industry has moved beyond supplying solutions to needs. Different Customers seek different forms of value – low cost coupled with ignored service quality, looking out for what they get additionally, even brand loyal Customers who see value in association and products. Because Mobile Telecommunications products are commoditised, attraction is in emotive appeal and other subjective areas (section 4.7.2).

Theory states that the industry should focus less on the effectiveness and efficiency of the Value Chain, and should focus on how value can be added to the Customer to simplify life and empower him. Customer needs must me understood, and then resources, core competencies and capabilities need to be built to deliver these. This should be coupled with the necessary, correct leadership and business strategies (section 2.4.7). Research participants felt that the definition of value is contextual and changes over time – value is not a uniform approach (section 4.6.5).

Certain perspectives appeared in the research theory that did not appear in research interview conversations. Theory specifies that internal co-creation and Customer involvement will address the fundamental need to understand Customers and build better value (section 2.4.2). Co-creation better solves problems and builds lasting relationships and value for all stakeholders (section 2.4.4). This perspective did not appear in conversations with the research interviewees. Another missing factor was the emergence of globalisation, global Value Chains, and value streams throughout industries (sections 2.4.2 and 2.4.3).

Participants felt that it is hard to identify which Value Chain activity adds relatively more value to Customers – even when Value Chain activities were modelled along business divisions, but stated that Customers value touchpoints with which they deal directly, such as retail shops to buy and Customer Care to get help (section 4.6.6). Contrastingly, theory provides frameworks and methods of Value Analysis that lead to efficiency, higher quality and lower cost in an objective manner (section 2.4.6).

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Literature specified procedures to perform Value Chain analysis that were not brought up by research participants. These can be used by industry to make strategic operating decisions that bring cost efficiencies and help achieve strategic goals (section 2.4.5). The Value Chain analysis procedure involves these steps (section 2.4.5): 1. Identify strategically relevant processes / value activities. 2. List resources and assets for each activity. 3. Assign operating costs and revenues to each activity. 4. Determine strategic cost drivers that explain underlying costs of each activity. 5. Use the information to develop strategic advantage by controlling strategic cost drivers, and / or reorganising Value Chain and improving product.

Value Chain analysis allows managers to build linkages between suppliers, operations and Customers in a broader way than Supply Chain. Supply Chain exists to meet demands and contain costs. Value Chain aims to deliver value (section 2.4.5).

5.3.3 INSIGHTS AND INTERPRETATION REGARDING VALUE CHAIN The research interviewees view Value Chain as a process or “production line”, thereby underplaying its importance and potential impact as a strategic mechanism to establish competitive advantage. This indicates a lack of maturity in the understanding of Value Chain as a strategic tool.

Value Chain can be analysed from an internal perspective that evaluates internal performance measures, efficiency, effectiveness and costs. A different view about Value Chain exists; comprising the Customer’s experience of the Value Chain. If the Customer’s experience is negatively impacted due to a prioritised focus on costs, the Customer may opt to take his business elsewhere. It is important to perform regular assessments of the Value Chain – from both perspectives.

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A better Customer Experience through a customer-focused culture and accompanying processes will result in a better Customer Experience, and therefore imply better value derived. The value may be an improvement in new business, in retained business, in improvement of Customer loyalty, and in competitive differentiation.

Value is based on what a Customer wants at a point in time and when he gets it, it can be easily incorporated into his life to enhance it (section 4.6.5). For this reason, companies need to be inventive, smart and strategic about how the Value Chain is individualised for Customer segments to deliver a differentiation in service, process and quality (section 4.6.3). Interestingly, following strategy alone can prove dangerous if the strategy is not aligned to the needs, understanding or appetite of the Customer to purchase. This has seen massive investments fail. A disconnect between strategy and Customer needs can be limited by co-creation and involving Customers directly in the Value Chain.

As a result of this analysis, the researcher believes that a definition of value from a Customer perspective is: “Getting what I want at a point in time because I need it, or simply want it - while acquiring it with ease, at an acceptable cost. The ease of use and convenience that it adds to my life brings goodwill that outweighs the financial cost. If this happens repetitively, I will become loyal and focus less on the price. This can, however be negated by poor information that impacts my understanding, poor performance of the product or service, as well as support problems.”

The telecoms industry competes aggressively in rolling out of technology and new products such as LTE and FTTx, but does so in a manner that is separated from frameworks that exist to deliver value and sustainable differentiation (section 2.4.7). Piggybacking of this advancing technology is a “gifting” perspective that is resource based – as if asking, “What can we deliver with our resources and capabilities?” and missing the opportunity to deliver value to Customers.

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Mobile Telecommunications products and services are highly commoditised. Buying power is shifting to consumers who have a clearer understanding of value. The ability for Mobile Telecommunications operators to deliver and experience that is superior, requires having an outward-in perspective (section 2.4.6). The industry players should enhance their understanding, assessment and execution of Value Chain, in order to deliver relevant value within a tough operating environment (section 2.4.6).

Customers attach value to perceptions, service experienced, emotive appeal of brand, perceived quality and reliability of the company, as well as future prospects of the company (section 4.7.2).

Within the context of the research interviews, the process of a Value Chain analysis was not raised. This may indicate the absence of a Value Chain analysis function within the industry, and a missed opportunity to derive value from leveraging competitive strengths. It is, however, a paradigm shift that should be executed in conjunction with environmental understanding, and learning from partners and competitors (section 4.5.6.1).

5.4 CUSTOMER EXPERIENCE This discussion highlights the findings of the analysis of the literature review in Chapter 2 when compared to the empirical research findings in Chapter 4. Focus is on the Customer Experience discipline.

5.4.1 CONGRUENCE BETWEEN SCIENTIFIC LITERATURE AND RESEARCH FINDINGS OF CUSTOMER EXPERIENCE As per theory, Customer Experience is the consolidated feeling of an individual towards a company because every interaction generates a Customer thought or emotion. The outcome of Customer Experience Management is loyalty within Customers in order to enhance the likelihood of future purchases (section 2.5). Research participants felt that Customer Experience is feeling and thinking after an

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interaction that is impacted by getting what was requested, as well as the time and quality to provide it (section 4.7.3).

In theory, various disciplines emerge as related to Customer Experience including Service Quality, CRM that captures transactions, and Customer Experience Management that captures what Customers feel at touchpoints, and also proactively identify gaps to improve experience (section 2.5.2). Research participants agreed that measures are taken to assess Value Chain performance and identify areas for improvement across touchpoints. Measures drive behaviour, so they indicate the correct targets for senior managers to drive Customer Experience in the right direction (section 4.7.4).

Participants shared that Customer Experience is influenced by service that is delivered on the frontline, by product (where it can be purchased, how easy it is, how easy it is to set up and use, how easy support is, as well as how leaving happens.) It is a combination of service and product experience that forms the Customer perception (section 4.7.3). Theory indicates that the quality of Customer Care includes every aspect of the firm’s offering. The personal and emotional response is created after both planned and unplanned interactions across touchpoints or distribution channels – they all contribute to the Customer Experience (section 2.5.2).

The interviewee participants’ perspective on improving the Customer Experience was to implement capabilities that identify and deliver the “Wow” factor through the right focus on the Customer agenda. Additionally, there should be strong market development that is aligned to segments. This requires using insight and knowledge from research in order to create value (section 4.7.6). Theory agrees that it is important to understand the Customer’s evaluation of the experience and tailor the experience to meet the Customer’s individual needs as a way to create differentiation and competitive advantage (section 2.5.2).

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Customer Experience should be seen as an important strategic objective (section 2.5.3). Customers respond to Value on their own terms and how firms respond to Customers’ preference for Value, is an outcome of strategic Value Chain analysis and internalised performance improvements (section 2.5.2). Interviewees shared that there is a link between Value Chain and Customer Experience. The Value Chain creates product to draw the Customer, and every activity should be designed and performed for the best Customer Experience (section 4.7.7). To deliver in this way, two critical success factors must be in place, namely, good design from a Customer perspective, with good communication from an internal perspective (section 4.7.8).

Participants felt that every business decision and process needs to support the intended outcome of Customer Experience for the Customers. This is important because Customer Experience begins before a Customer signs up through brand perception, word-of-mouth recommendations, needs discovery and marketing communication. Customers who have left the company keep doing word-of-mouth, potentially against the brand (section 4.7.11).

Research findings determined that Customer Experience is direct with the core product and in customer-facing functional areas. Internal divisions service each other and a culture of service is needed so that internal divisions do not fail each other and fail the Customer (section 4.7.9). If resolution requires handovers, these must be hidden and smooth. Significantly, meeting a Customer’s expectations does not equal exceptional service or “wow” from a Customer perspective (section 4.7.10).

Theory explains more directly that Customer Experience is delivered across distribution channels or touchpoints, and that few organisations do it well because delivering the right Customer Experience is difficult. Business capabilities need to be managed as a company matures towards delivery of Customer Experience. Specified categories of capabilities are business process alignment, talent management, as well as Customer interaction and care infrastructure (section 2.5.4).

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5.4.2 DIVERGENCE BETWEEN SCIENTIFIC LITERATURE AND RESEARCH FINDINGS OF CUSTOMER EXPERIENCE The initial fundamental difference between theory and research findings stems from a methodological procedure. Research participants were not interviewed on the history of Customer Experience. Theory explains the evolution of Customer Experience through permutations of maturity from Service quality (1980s), Customer Service (1990s) and Customer Experience (1999-onwards) (section 2.5.2).

Research participants provided their perspective on what a good Customer Experience is: it is a single point of contact and accountability, providing good resolution time, behaviour when resolution time is exceeded, as well as how Customers are treated (appreciated, valued and respected) (section 4.7.3). This applies to South African Mobile Telecommunications from two perspectives – performance of core product purchased, as well as a Customer’s experience when service or support is required. Both evoke an emotional response (section 4.7.3).

Participants share their view on the ultimate measure of Customer Experience; whether a Customer would recommend the company to his friends. Operationally, measures are taken on network experience, and quality and network performance (section 4.7.4).

Customers use their preferred method to alert companies about Customer Experience from hellopeter.com, to complaint boxes, phone calls, social media and consumer rights programmes in the media. These complainers are interested in resolution, whereas companies sometimes only want to take action when a Customer wants to leave. Brands need to be paying attention to what is said about the Customer Experience, as this provides insight into what is happening within the organisation (section 4.7.5).

Participants recommended changes such as fix the basics of Customer Experience, partnerships with suppliers and Customer to improve pricing, touchpoints and

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processes, simplification of offers from a Customer point of view, as well as segmentation for service delivery and efficiency in the right areas (section 4.7.6).

Participants saw a link between Value Chain and Customer Experience where each function should take responsibility for their role because everyone has the same goal to improve the Customer Experience. It is pointless having great operations, with delays on the service side that result in an overall negative Customer Experience. An organisation without a single goal, and alignment throughout, results in divisions working against each other, and in frustrated Customers (section 4.7.7). Customer Experience is a differentiator, but it does occur that Customers may leave for a competitor with less on offer, but with a better Customer Experience (section 4.7.8).

Participants felt that operators should develop pockets of excellence (section 4.7.6) to assess the Value Chain within the context of Customer Experience to facilitate streamlining of processes to be faster and better. There was a feeling that the better the ability to execute the Value Chain and meet Customer requirements, the better the Customer Experience, and the better the word-of-mouth promotion of the brand (section 4.7.8).

Views did conflict between the Value Chain needing to make business sense and the Value Chain needing to create value for Customers and deliver benefits including a good Customer Experience. Managing Customer Experience in a human-driven environment requires attention of process design and management, including measurement. Getting the balance right is tough and measurement helps to achieve it. However, a good Value Chain design will eliminate rework, create synergies, smooth out handovers, reduce complexity and deliver what Customers value (section 4.7.8).

Participants’ perspective on how Customers view service from operators showed that Customers are interested in the desired outcome, not where the responsibility for resolution lies. Representatives are expected to own the Customer request and meet the expectation to deliver on promises and follow up as standard (section 4.7.10). 169

Doing your job is standard / average performance, but there is no idea of what good service is. What is clear is that the perceptions and perspectives of friends and social influencers, outweigh marketing messages (section 4.7.10).

After a Customer has purchased, Customer Experience is next in ease of process, performance and reliability of services and speed and performance of support / self- help (section 4.7.11). All business divisions exist to provide service to the Customer and the quality of execution – including background functions and systems, has a Customer Experience impact (section 4.6.9).

Missing topics from the primary research that exist in theory are now covered. Around the generic elements of Customer Experience, theory shows that Customer service focus has shifted from internal product / service quality to external Customer (section 2.5.2). Customer Experience is about the Customers, their emotions and behaviour in interaction with the organisation that is caused by direct exposure or indirect exposure of the delivery across channels / touchpoints. Customer Experience strives to create an emotional connection with Customers (section 2.5.2).

Customer Experience should be memorable and should be enhanced over time (section 2.5.2). Customer Experience is less bordered or defined than products or service quality. Dimensions of Customer Experience include physical surroundings, service provider interaction, other Customers’ feedback and the Customers’ own perception (section 2.5.2). Customer Experience has evolved into a strategic asset with supporting, holistic business model design traits that deliver value across the entire Value Chain. Customer Experience is a strategic tool to create loyalty and financial benefits for the organisation (section 2.5.2).

Customer Experience improvement programmes should span the entire organisation, eliminate silos and enhance collaborative success (section 2.5.2). Exceptional Customer Experience can be quantified and measured in terms of Customers’ emotions, behaviours, levels of loyalty and profitability. Yet, measurement of

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Customer satisfaction does not build understanding of how to achieve Customer satisfaction (section 2.5.2).

In the mind of the Customer, sensory and emotional aspects of experience outweigh the physical characteristics of a product, and the Customer Experience is evaluated by comparing the expectation of service to the reality of service. This can introduce a gap between the level of Customer delight and something less. All aspects of Customer Experience should be managed appropriately to reduce the chasm of the service quality gap (the gap between expectations / perception and reality) (section 2.5.2).

Aspects of Customer Experience management include strategy, culture, Customer expectations, processes, channel approach, marketing and brand, systems and people (section 2.5.2). Differentiation in Customer Experience is a source of competitive advantage with 85% of business managers viewing Customer Experience as the next competitive battleground for sustainable competitive advantage. It has been shown that extraordinary experiences create a 5% increase in Customer loyalty (section 2.5.2).

Apple Inc. is good at providing an experience that is narrow and complete. This can be compared to a compromised end-to-end experience (section 2.5.2). The root of process design is in making operations more efficient, to effect cost cutting, or to influence the rational side of interactions (section 2.5.2). Telecommunications companies do not stand out globally for delivery of a good Customer Experience, as they are inherently inward-focused and do not put Customers first (section 2.5.2).

Mobile Telecommunications touchpoints comprise network, retail, contact centres and online (section 2.5.4). South African Mobile Telecommunications have responded with respective “Customer first” public strategy / vision statements (section 2.5.3). Customer Experience has witnessed two streams of evolution in maturity; the science of the discipline, as well as the maturity of the organisation’s view thereof (from naïve, to transactional, to enlightened to natural) (section 2.5.3). 171

This is seen in the evolution in marketing focus from product, to service, to experience (section 2.5.3).

Delivering Customer Experience is significant to the business – delivering the right Customer Experience delivers good returns for business (section 2.5.4), it is a driver of loyalty (section 2.5.5). Value lies in the tangible product that is delivered, as well as the delivery of the Customer Experience through process design (section 2.5.5).

Strategies that brought success in the past are not enough to maintain it anymore, and companies need to develop competencies to rethink the business philosophy and ensure business survival (section 2.5.5). Customers’ desire consumption experiences more, and organisations are designing them in order to perform to, and exceed the expectations of Customers (section 2.5.5). Companies have started building themed theatrical spectacles that are individualised and memorable and engage all of the senses (section 2.5.6).

5.4.3 INSIGHTS AND INTERPRETATION REGARDING CUSTOMER EXPERIENCE Customer Experience is personal, emotive, subjective and a key driver of loyalty driven by an understanding that the core product may not be the most important element for the Customer any more. The fulfilment of the Customers’ inner sensations is. Customer Experience is a complex strategic objective that has many levers to create loyalty and improve value. Customer Experience ties into the business strategy.

The Mobile Telecommunications Industry is not recognised for great Customer Experience. Notwithstanding, all major South Africa mobile operators have published vision statements on Customer Experience for their brand.

The research participants highlighted a gap in understanding of the theory of Customer Experience. This is, after all, a newer marketing approach, and the level of

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maturity needs to evolve until customer-centric processes are natural and a unique, valued Customer Experience is delivered by default in daily operations.

5.5 CONCLUSION Chapter 5 has discussed and compared the Literature Review theory with the primary research findings to establish trends in similar views, different views or gaps in either the literature or research. Some interesting insights have been highlighted that will form the basis of the research conclusions and recommendations.

Chapter 5 further supports the researcher’s objective to add to the body of scientific knowledge. Fundamentally, the insights and resultant discussion contribute to theory by confirming existing, or explaining divergences as per the scope of this research project. These insights are significant, and they can be useful in implementing visible organisational change by industry stakeholders, as well as evolving scientific theory.

Chapter 6 will conclude the research study by drawing the overall conclusions from the research study and making recommendations for the South African Mobile Telecommunications Industry to deliver better Customer Experience and Customer Value.

Chapter 6 will provide recommendations on the outcome of the analysis that may be considered by Mobile Telecommunications Industry stakeholders and role-players. Because the research topic has uncovered a collective, subjective opinion from the research sample within the context of the South African Mobile communications industry that analyses the Value Chain of the industry and deconstructs the impact of the activities of the Value Chain on the Customer Experience, the findings may be applied to solve business problems within a similar business context.

Chapter 6 graphically confirms the linkage of the entire study from the primary objective, to the secondary objectives, indicating the relevant chapters that cover the research pillars. This is linked to the themes and indicators uncovered in the interviews and how these flow into the findings and recommendations. 173

The chapter also specifies the limitations of the research study and recommends potential areas of possible future research that flow from the findings of the research.

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CHAPTER 6 CONCLUSIONS AND RECOMMENDATIONS

6.1 INTRODUCTION Chapter 5 built new theory insights by comparing the findings of the qualitative research study with the existing literature on the concepts under analysis. The opinions and perceptions of the research subjects were documented, analysed and compared with academic literature to establish what is common, as well as what are different viewpoints on the Value Chain and its impact on the Customer Experience.

Chapter 5 supports the researcher’s objective to establish new scientific theory, as well as provide useable insights for practical implementation. Furthermore, the insights form the basis of the research conclusions, research recommendations in the areas of Literature, research approaches and their methods and tools, as well as practical recommendations for business managers to adopt and implement.

Chapter 6 documents the principal conclusions and recommendations that stem from the understanding and perceptions of the research subjects. Additionally, the chapter provides research and management recommendations that emanate from the research findings. Initially, the principal conclusion and principal recommendation are stated.

A discussion on the conclusions reached follows next, as well as a discussion on the recommendations that emanate from the study. In the chapter, recommendations are discussed in some detail. Recommendations are made in the area of literature theory, in qualitative research approaches and tools, as well as practical recommendations that are targeted towards the South African organisations within the Mobile Telecommunications Industry.

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Chapter 6 also comprehensively links the elements and chapters of the research study from the objectives that were identified and specified to the conclusions and recommendations that flow deductively from the methodological research process. The report concludes with a discussion on the research limitations, as well as an indication of possible future areas of research that may complement this study.

6.2 OVERVIEW OF THE STUDY This research study arose from the researcher’s interest and professional experience in Customer Experience and Strategy. The starting point of the research is the orientation of the concepts under research analysis – Mobile Telecommunications Industry as the business context, Value chain as the mechanism to achieve strategic differentiation, and Customer Experience as the outcome that produces Customer loyalty and profitability.

Chapter 1 provided an outline of the study. The rationale and business problem were explained and the problem statement, research question and research objectives were defined. The research question was defined as: How do, and to what extent do the activities of the Value Chain affect the Customer Experience in the South African Mobile Telecommunications Industry?

Chapter 2 comprised the Literature Review. The chapter delineated the research boundaries and explored Value Chain, Customer Experience and Mobile Telecommunications within South Africa from a literature perspective. Various definitions of the respective topics were stated, as well as the generic elements. In addition, the history, significance and emerging trends for each research area were presented.

Customer Value is positioned in Chapter 2. This outcome is the intersection of strategy, competitive differentiation and delivery of the Value Chain. Lastly, significant events within the South African Mobile Telecommunications environment are specified.

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Chapter 3 defined the research design and methodology. The decisions described here are a framework template for execution. The research methodology and approach need to be suitable to achieve the stated research objectives. As the aim is to understand the objective, a qualitative paradigm was chosen that enables an insider perspective.

The research is empirical. Data gathering occurred through semi-structured interviews. Interviewees were selected purposively, but care was taken to ensure representation from all activities of the Value Chain.

The research report was specified in Chapter 4. Following the data gathering, all responses were analysed and coded. To achieve this, the qualitative content analysis technique was used. Interviewee responses were classified and coded to allow meaning to emanate organically. Each of the coded indicators is summarised with supporting evidence provided through verbatim quotes. These represent the empirical research findings.

Chapter 5 assessed and synthesises research findings by comparing the empirical research findings in Chapter 4 with the literature review in Chapter 2. Areas of congruence between scientific literature and research findings are highlighted. Similarly, divergences are highlighted. Theoretical insights are specified. These form the basis of new theory resultant from the study.

Chapter 6 concludes the research and closes the loop on satisfying the research objectives. There is an explanation of how the research objectives are satisfied, followed by a summary of the research findings. Chapter 6 also specifies the research conclusions and recommendations. Each respective conclusion contains an implication. Conclusions specify the judgemental reasoning from the research study, while implications show the dangers that may face the industry if the status quo prevails.

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Recommendations are specified in three areas – scientific literature, research method and business practice. Lastly, Chapter 6 provides a new framework that specifies the levers to influence Customer Value. The model is multidimensional and evolves contemporary Customer Experience frameworks that are largely two- dimensional in nature.

6.3 SATISFYING THE RESEARCH OBJECTIVES The secondary research objectives were introduced in Chapter 1. The findings, conclusions and recommendations serve to complete the research process by satisfying these objectives:

To analyse the dynamics at play within the South African Mobile Telecommunications Industry.

This secondary research objective has been satisfied in the following manner: • Chapter 1 contains a high level discussion on the Mobile Telecommunications Industry in South Africa to introduce the industry as the research context, and to specify common strategic objectives for operators. • Chapter 2 analyses events within the Mobile Telecommunications Industry to sketch a picture of the approaches, challenges and events that have played out and influenced the competitive dynamic between the operators and the Value and Experience delivered to Customers. • The empirical research findings in Chapter 4 indicate the perspective of the interviewees on the history and dynamics on the Mobile Telecommunications Industry in South Africa. • Chapter 5 performs a discussion of congruence, divergence and a reflection of insights and interpretations between the literature review and the empirical findings for the South African Mobile Telecommunications Industry. • Chapter 6 concludes the research by deducing conclusions and implications that emanate from the study and specifying practical recommendations to maximise Customer Value. 178

To obtain an understanding of the perceived interplay between the Value Chain and Customer Experience within the South African Mobile Telecommunications Industry.

This secondary research objective has been satisfied in the following manner: • Chapter 1 introduces Michael Porter’s seminal Value Chain theory as a way to analyse an organisation strategically to determine how Value is added and how differentiation is obtained over industry rivals. • Chapter 1 introduces Customer Experience as a business strategy, as well as an outcome that produces the benefits of retained business, Customer loyalty and differentiation. • Chapter 2 investigated the Value Chain framework from a literature perspective to define the significance thereof in transferring Value to Customers. • Chapter 2 similarly investigates Customer Experience with definitions, dimensions, approaches and significance. • Value Chain and Customer Experience are shown to link in Chapter 2 by positioning Customer Experience as an intangible, value outcome of the Value Chain execution. • Chapter 4 documents the perspective of the interviewees on the link between Customer Experience and Value Chain, including how the Customer Experience can be enhanced through an appropriate Value Chain design and execution, as well as how value is added as a result. • Chapter 5 performs a discussion of congruence, divergence and a reflection of insights and interpretations between the literature review and the empirical findings for Value Chain as well as for Customer Experience.

To assess the maturity of the South African Mobile Telecommunications Industry in utilising the Value Chain to deliver on overall strategic objectives as well as the desired Customer Experience outcomes.

This secondary research objective has been satisfied in the following manner:

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• The Research Rationale section in Chapter 1 specifies contemporary challenges for the Mobile Telecommunications Industry and motivates for Business Model changes to provide Customer Value. • Chapter 1 additionally shows that internal organisational alignment on the understanding of Value Chain impacts negatively impacts delivery of Customer Value and Customer Experience, and thereby detracts from value and sustainability. • Chapter 2 specifies definitions and significance of Mobile Telecommunications. Furthermore, a discussion follows on the realisation of Customer Value within the industry. • Chapter 4 shows the findings of the empirical research in specifying how Customers view an operator for the value that it adds to their lives. Insights are shared on suggested changes to improve the Value Chain and enhance the Customer Experience. • The insights and reflections discussions within Chapter 5 provide an indication of the alignment between theory and real-world understanding of the topical pillars of the research, and indicate a level of immaturity in the understanding and application of Customer Experience and Value Chain.

6.4 FINDINGS OF THE RESEARCH The research findings will be summarised and aligned to the secondary objectives of the research project.

6.4.1 THE DYNAMICS WITHIN THE SOUTH AFRICAN MOBILE TELECOMMUNICATIONS INDUSTRY The Mobile Telecommunications Industry has fundamentally impacted people’s lives by enabling them to communicate in a way that was not previously accessible. In this way, the industry has enabled capabilities that Customers value across the dimensions of life such as social integration, education, business and agriculture.

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The industry is fast-paced and the company that rolled out services fastest was the leader – even though the technology was not always well understood by Customers. Evolution has occurred within the industry.

Customers are more enlightened about choice and value. This results in a continuously shifting dynamic that necessitates the operators to respond to market demands. Challenges for mobile operators include pressure on Customer growth (high market saturation) and disintermediation through convergence and open access models.

It is unclear whether changes are driven primarily from Customer need, market competition or technology advancement as the main driver. Customers expect a decrease in cost over time – resulting in a slower contribution to revenue.

Mobile phones will become more ubiquitous as they integrate into human life and functions in a more meaningful way. At the same time, it will be more commoditised.

The industry is struggling with a dumb-pipe syndrome whereby the network invests in the infrastructure to maintain a GSM network. Simultaneously, entrepreneurial companies have created services and content that are free and valuable to Customers, yet reduce revenue for network operators. This pressurises revenues and resources. Over the last few months, senior management changes, and retrenchments and cost-cutting measures have shown that the Mobile Telecommunications Industry is reconfiguring itself in dealing with the new reality.

6.4.2 THE INTERPLAY BETWEEN VALUE CHAIN AND CUSTOMER EXPERIENCE The Value Chain is the delivery mechanism to enable the delivery of products, services and solutions to Customers. Notwithstanding, when viewed from a Customer perspective, it is less about the ‘what’ of the Value Chain execution and more about the ‘how’ it works to effectively deliver the benefits that Customers value,

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and how the Customers feel emotionally about the delivery of services that enable a digital lifestyle.

Value Chain design and execution should deliver differentiation for the organisation, and should be seen or felt by Customers. There should be innovation and differentiation that show understanding of the market characteristics and bundle products into desirable bundles for customers. The industry should focus on building loyalty in a more focused manner.

As the evolution within the Mobile Telecommunications Industry plays out, new sources of differentiation must be found. Value Chains need to evolve through partnerships and collaboration, and through value propositions. Products are the vehicle to transfer strategic value from Customer to organisation.

Organisations have multiple Value Chains per division. The inputs and outputs of these Value Chains affect the quality of delivery to customers as value is added through the Value Chain. Notwithstanding, the Value Chain delivers at least the minimum to Customers, while adding value sits around the peripherals and is shown in how a customer is supported around the product purchase. The Value Chain delivers the right product at the right price and location for Customers. Value exists above the core service in the way the lifestyle of the Customer is enhanced.

Value Chain links to Customer Experience and impacts a firm’s competitive position. The better the Value Chain execution, the better the innovation and quality, the better the Customer Experience. The value to the organisation from this, is improvement in Customer lifetime value – higher loyalty, advocacy and tenure.

Customers interact at touchpoints. The outcome of interactions may delight or frustrate a Customer. This causes a perception within the Customer. Value Chain impacts Customer Experience in product relevance, quality, speed to market and price. All the elements must work and the Customer must be buying. If the Customer is not buying, the Value Chain is ineffective.

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6.4.3 THE MATURITY OF THE SOUTH AFRICAN MOBILE TELECOMMUNICATIONS INDUSTRY IN EMPLOYING THE VALUE CHAIN TO DELIVER ON CUSTOMER EXPERIENCE OUTCOMES The research interviewees did not explain the Value Chain in a way that aligns with the seminal depiction by Michael Porter. The Value Chain was understood only as a process to transform inputs into outputs, and not for its ability to add strategic value to the organisation.

Customers do not want to consider silo’ed functions within an organisation and purposefully require abstraction of internal complexity in favour of fast, quality resolution. Aspects that arise in theory, not during the interviews, showed gaps or immaturity in delivery of some Value Chain components to deliver on Customer Value outcomes. Firstly, resources, core competencies and capabilities need to be aligned with the business strategies that are in place to deliver Customer Value. A uniform approach will not satisfy different Customer contexts. Secondly, internal co- creation, as well as Customer co-creation will help to solve problems better as well as build better value.

Interviewees found it challenging to identify which Value Chain activity adds the most relative value to Customers because of a view that mainly sees internal business divisions. This inability to view Value Chain activities is a maturity gap, and cannot support activities such as Value Analysis that lead to efficiency, higher quality and lower cost in an objective manner.

The current understanding of Value Chain as a process, or as a production line results in devaluing its ability to establish competitive advantage as a strategic mechanism. This signals immaturity in understanding of Value Chain, as well as immaturity in delivery of Customer Value. Mobile Telecommunications have formerly followed strategy – at the risk of the dangers and failures in these investments. The method of competition is technology-driven, yet void of delivery of Customer Value

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and sustainable differentiation. Understanding, assessment and execution of Value Chain need to be enhanced to deliver relevant value.

6.5 PRINCIPAL CONCLUSION RESULTANT FROM THE STUDY The principal conclusion for the research study is: Operators in the South African Mobile Telecommunications Industry are not mature in their understanding of Customer Experience and Value Chain. Because of this, the industry is unable to maximise the effect of Value Chain on the Customer

Experience.

6.6 PRINCIPAL RECOMMENDATION RESULTANT FROM THE STUDY The principal recommendation for the research study is: Although the operators in the South African Mobile Telecommunications are not mature in their understanding of Value Chain and Customer Experience, there is great opportunity to employ a Value Chain perspective in order to improve the Customer Experience. This can be achieved by implementing the specified recommendations.

6.7 DISCUSSION ON CONCLUSIONS EMANATING FROM THE STUDY The research process and academic / insights analysis process has given rise to the conclusions to follow.

6.7.1 THE MOBILE TELECOMMUNICATIONS INDUSTRY The Mobile Telecommunications Industry is moving towards commoditisation. The industry has not demonstrated the ability to implement a market-specific approach to products and operations. Organisations operate in a functionally silo'ed manner. As a

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result of stable consumer spending and usage, the industry is internally focused and does not deliver a strong loyalty proposition.

6.7.1.1 THE MOBILE TELECOMMUNICATIONS INDUSTRY IMPLICATIONS Commoditisation and competition based on price comprise a zero sum game and a race to the bottom. The tendency of the industry to operate in a silo’ed and internally focused manner can no longer be sustained. The growth trajectory of voice minutes of use indicates that the core business of carrying voice traffic is in decline. A reconfiguration of the core business within Mobile Telecommunications is needed. Failing this, revenues will decline as seen in many developed markets in Europe.

This is a complex challenge. Lack of revenue will lead to the inability to invest. Simultaneously, investment needs to be made into segments that are important to customers, and reflect an understanding of the needs and desires of targeted segments. The development and implementation of total solutions and propositions that provide Customer Value and the ability for Customers to live their lives in a way that is relevantly and effectively supported by technology, will determine the success of operators.

In 2014, Cell C and MTN were retrenching staff. Vodacom is aggressively saving costs and looking for efficiency. These are symptomatic of ineffective Value Chain analysis. These are reactive responses to market realities. The inability, or lack of execution of mobile operators to proactively establish mechanisms to deliver Customer Value, is a threat to the industry itself.

6.7.2 VALUE CHAIN The design of operation in the industry loosely models the Value Chain, however the model is not implemented in a way that highlights strengths in strategic differentiation. This has led to reporting on internal measures – rather than what matters to the Customer. Industry operators act to cancel out each other’s

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competitive moves, resulting in a one-size-fits-all and one-approach-fits-all approach to business. There is insufficient differentiation.

6.7.2.1 VALUE CHAIN IMPLICATIONS The implications of insufficient strategic differentiation of the Value Chain are similar to the implications that affect the Mobile Telecommunications Industry at a macro level. These implications contribute to, and may compound the challenges at the macro level.

An internal focus, coupled with a tendency between operators to compete on price rather than Customer Value and a compelling Customer Value proposition, is simultaneously a threat to revenues and operations.

A lack of understanding of the drivers of Customer Value within the marketplace is exacerbated by a lack of clarity of the levers of strategic differentiation of mobile operators. The contemporary reality is that Customers are using less voice, using more data and demanding lower cost. The challenge with this is that the operators do not play a role in providing the content that is consumed within the marketplace, yet suffer attacks through disintermediation and disruption from VOIP and Over-the-Top (OTT) operators that offer substitute products which replace or enhance the core product of the mobile operators in a way that is more readily adopted by Customers.

OTT challenges will continue to impact mobile operators until there is regulatory intervention, or until the operators implement compelling solutions that cause Customers to opt to use what the mobile operator offers, rather than the OTT solution. This requires a faster, and more relevant innovation curve from mobile operators. This however, is not a capability that operators have displayed to be effectively executed, as reflected by the lack of Value Chain analysis and optimisation. If this does not change, mobile operators will increasingly be used as dumb pipes that are simply a mechanism to connect Customers to the content and

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applications that they want to use. Value to operators will be restricted to what can be extracted from billing for transport costs.

6.7.3 CUSTOMER EXPERIENCE The Mobile Telecommunications Industry acts to make decisions on behalf of Customers. This is because Customers are not actively consulted and involved in the business decision-making process. This leads to a mismatch between Customer expectations and the reality of service and solutions delivered, and results in a sub- standard Customer Experience. Furthermore, none of the industry operators have proactively published a service charter that can serve to communicate minimum service standards to Customers. Whatever Customer Experience is delivered, is sporadic and coincidental. The emotions that are elicited by this approach are unlike the intended loyalty that Customer Experience seeks to create.

6.7.3.1 CUSTOMER EXPERIENCE IMPLICATIONS Making decisions on behalf of others is arrogant and insincere. Since the inception of Mobile Telecommunications in South Africa, this has largely been the trend. There have been positive results from doing so, driven by Customer apathy, coupled by lack of understanding.

The landscape has changed, and continues to do so. As a result, methods that delivered success in the past may not deliver similar success in the future. Customer knowledge is increasing. Customer expectations are increasing. Customers are looking for cheaper ways to do their communications and integrating OTT services into their smartphones and tablets.

Mobile operators cannot continue to ignore the Customer Experience imperative. Customer Experience is an overarching strategy, as well as a business result that cuts across all areas of business. The implication of not considering this, and not completely defining the Customer Experience for every interaction with the brand, eliminates the opportunity to build deep loyalty from Customers. Loyalty is the key to

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word-of-mouth organic recommendations, as well as the key to repeat purchases and sustainable profitability.

Customer Experience Management and delivery are challenging undertakings. Not doing it, however, could result in exacerbating the market-related challenges and make Customers vote with their feet. Similarly, Customer Experience failures contribute to macro industry challenges. A decision to invest and deliver a good Customer Experience will ultimately be a decision to remain in business. The opposite is also true. Lack of investment will result in an erosion of mutual value and pressure on both sides of the relationship between mobile operator and Customer.

Proactively creating memorable moments for Customers is a key Value strategy.

6.8 DISCUSSION ON RECOMMENDATIONS EMANATING FROM THE STUDY The Mobile Telecommunications Industry in South Africa can deliver Customer Value and derive business benefit by implementing the following recommendations. The recommendations are aligned with a Value Chain perspective and will improve the Customer Experience.

Recommendations are made in three areas – academic literature, research approach and practical recommendations for managers to implement and solve business problems. Following these recommendations will assist in achieving the principal recommendation to improve the Customer Experience by using a Value Chain perspective.

6.8.1 RECOMMENDATIONS IN TERMS OF LITERATURE Through the process of executing the research project, some challenges and shortcomings were found in available scientific literature. This occurred most prominently in the Customer Experience domain, as Customer Experience is still a relatively new concept.

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An overview of the challenges and recommendations is now provided.

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6.8.1.1 CHALLENGES FOUND IN CONTEMPORARY LITERATURE Contemporary Customer Experience frameworks are two-dimensional. Dimensions of the frameworks are usually specified in categories, levels or process steps that aim to improve the Customer Experience. Such models diminish the adoption of a Value Chain perspective in improving the Customer Experience.

Current Value Chain and Customer Experience models ignore the ‘why’ for a Customer to purchase products or services from a Mobile Telecommunications provider. Customers do not purchase for product features, but for the ability of those features to enable what they want to do with their lives in order to progress.

Current theory and models are immature in reflecting Customer motivations, as well as the complex, multidimensional real-world attributes that play a role as ‘levers’ to deliver Customer Value and influence the Customer Experience.

6.8.1.2 RECOMMENDATIONS TO ADDRESS GAPS IDENTIFIED IN LITERATURE This shortcoming can be addressed by further empirical research and construction of a multidimensional, complex ‘n-gon’ model that intersects Value Chain activities, business imperative outcomes, valued Customer expectations / outcomes, the Customer’s real life intention of having a relationship with the Mobile Telecommunications provider (including market segment dynamics), governance steps, process measurements, strategic objectives, cultural and behavioural specifications, as well as touchpoint requirements.

At the intersection of these dimensions within the ‘n-gon’ model lies the process steps and business initiatives that inform the Value Chain activity design, and to know which levers to pull and proactively influence the Customer Experience.

Such a model must incorporate contextually relevant Customer Experience needs, as well as the Customer tendency for “wow moments” and memorable interactions to be seen as hygiene factors in a very short period of time. Delivering a good Customer 190

Experience is therefore about building a multidimensional design that evolves in order to continually surprise the Customer by proactively exceeding his expectations.

6.8.2 RECOMMENDATIONS IN TERMS OF RESEARCH APPROACH This qualitative and empirical research study has implemented the Content Analysis technique to establish findings, build theory and provide recommendations to meet the research objectives and answer the research question. The research is time- bound, and the sample was selected using a purposive technique.

The findings and recommendations are still relevant, but the study may have benefitted from including some quantitative elements to baseline and measure Value Chain activities and Customer Experience. Furthermore, it would be interesting to obtain a broader, extrapolated and representative view on the research findings to determine whether the findings and recommendations are applicable to a wider scope of industry or business challenge.

Content Analysis allows the research to be a passive participant of the world under analysis. The research process and findings therefore feel authentic and consistent with the researcher’s own experience as a Customer and a practitioner of Customer Experience within the South African Mobile Telecommunications Industry.

Support from the research supervisor, University library staff and colleagues has been an important contributing facets in the execution of this research study. The research process and academic requirements require an approach that may not be natural or intuitive for some researchers. Nevertheless, such challenges enable growth for the researcher, while the research study provides academic and practical knowledge to enable industry to progress.

The use of the Weft QDA software program assisted in speeding up the process of data analysis by supporting the process of coding of data. This tool did not support the full process of qualitative research in a holistic manner, and other tools such as a

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dictaphone, pen and paper, word processor software, spreadsheet software and electronic calendar tools were needed.

A single tool can enhance the end-to-end process of qualitative research. All research artefacts and deliverables can then be kept in a single place, and in a way that models the logical research process. This includes the steps of research planning, research execution, analysis, documentation and delivery of the research report with required references.

6.8.3 PRACTICAL RECOMMENDATIONS The industry needs to execute the Value Chain well and deliver on the Customer Experience outcomes that the Customer will value, or it will disappoint stakeholders. This can be achieved through a number of complementary initiatives that must be incorporated into the Value Chain design.

6.8.3.1 PRACTICAL RECOMMENDATION 1: ESTABLISH VALUE CHAIN CLARITY Be clear on what the Value Chain is for the organisation from an internal and from a Customer perspective. Use Value Chain analysis to find strategic advantage and increase efficiency. Also focus on the outcomes of the Value Chain to increase Customer Experience.

Fundamentally, a cultural shift must take place so that stakeholders understand that doing your job is simply the minimum. That is what Customers pay for and no value is added yet. Every Value Chain activity must contribute as required to deliver on this minimum. Thereafter, value can be added to Customers through direct touchpoints.

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6.8.3.2 PRACTICAL RECOMMENDATION 2: IMPLEMENT SMART SEGMENTATION AND BUSINESS DEVELOPMENT Mobile operators should not be all things to all people. Rather, the Value Chain should be segmented to deliver what is personally relevant to a Customer. This begins by spending time with a Customer, listening to him, and involving him in the decision-making process of the company.

Customer Experience must cater for the emotional appeal of a Customer, so it must be personal and relevant. Operators should develop an ecosystem to draw Customers into; that transcends the all cycles – Customer life cycle, product life cycle and Customer life cycle stage.

The market continues to evolve. Mobile operators should perform thorough market analysis and implement smart segmentation of the market. Individualisation of the Value Chain should be set up by the market segments to deliver in a personalised way to each segment.

Customers do not know what the Value Chain is, and they purposefully require the abstraction and view the operator holistically. However, when the Value Chain is generic or ineffective, the Customer will feel it. Conversely, the way in which Value is added, identifies the company to the Customer.

Segmentation and aligned delivery create a view of business as delivering niche solutions for dozens of niche segments. The market will morph in relation to the technology that is provided, and use it as deemed appropriate.

6.8.3.3 PRACTICAL RECOMMENDATION 3: BUILD DEEP UNDERSTANDING OF THE BIG PICTURE AND THE ROLE THAT EACH MEMBER PLAYS Operators in the industry need to build an individual, compelling and common vision for Customer Experience for a common understanding of what should be achieved. The attitudes, behaviours, service standards, culture, benefits and strategic 193

alignment should form part of this model. Value Chain and Customer Experience have maturity levels, so these maturity levels need to be assessed and communicated so that every stakeholder is aware of his contribution to Customer Experience.

Everyone in the operator must understand the big picture and ensure that every touchpoint is available to the Customer. Real experiences of the Customer outweigh external factors. Faster, more accurate responses reflect good internal integration of the business functions, and as a result, of the Value Chain. Operators must ensure that everyone understands their role, and impact on delivering or detracting value from the Customer perspective.

6.8.3.4 PRACTICAL RECOMMENDATION 4: DELIVER THE DRIVERS OF LOYALTY The industry should increase Customer loyalty by investing in the Customer Experience and aligning the activities of the Value Chain accordingly.

Price matters to Customers until value is seen. This is one of the keys to loyalty. Implement a loyalty mechanism that Customers value because it recognises them and gives something back in return. Put the needs of the Customer first to get loyalty, and then derive business benefits from the loyalty. Perceived value changes, based on Customer segmentation. Operators need to understand how the segment wants to be treated, and then deliver that in order to create the loyalty.

Customers should see value through the benefits of products and services as well as through the value for money. Customers should feel valued, through a loyalty programme that recognises them for tenure, spend and social influence. These initiatives should be implemented though flexible building blocks that are easy to obtain, enhance, understand and derive Value from.

Additionally, the operators should actively seek and define ways to “WOW” Customers at key interactions to deliver surprise and memorable moments. This 194

means making deliberate actions to positively surprise Customers by providing a small and unexpected token, or trinket of Value to the Customer. These actions become strategic levers that can be adjusted to impact Customer Experience perception and loyalty. These levers should be determined, and a framework and core competency around implementing, delivering and evolving these “WOW” moments should be part of the Customer Experience strategy, and be delivered by the Value Chain.

6.8.3.5 PRACTICAL RECOMMENDATION 5: MEASURE THE RIGHT THINGS THAT THE CUSTOMERS VALUE Every stakeholder should be acutely aware of his contribution to Customer Experience, what his measurements are against the targets, what the upstream and downstream impacts of service failures are, and what the sustainability benefits of loyal Customers are.

What gets measured, gets done. Culture, service standards and behaviours are driven by measurements. Internal measurements are important, but these should be internal measurements that support measures that Customers value. Customers don’t care about 99.995% service level uptime when they are unable to make a call due to network congestion that are outside of the Customer’s control. Simplicity of the offer is more important than the ability to offer every permutation that the competitor has.

Value must be seen and measured from the Customer perspective, not only from the organisational perspective.

6.8.3.6 PRACTICAL RECOMMENDATION 6: IMPLEMENT A CUSTOMER- LED OPERATING MODEL Customers must be enabled and empowered to help themselves through a targeted approach that is open, friendly and relevant to their needs. Industry operators must proactively define and design the Customer Experience from the Customer’s

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perspective. The outcome must always be a resolution that meets the ideal outcome expectation of the Customer, as opposed to the internal, procedurally ‘efficient’ resolution, which only meets the internal objective of process efficiency. Lack of empathetic process design that prioritises internal efficiency over making it easier and nicer for Customers to get a solution, results in Customer dissatisfaction and poor Customer Experience.

Put the Customer at the centre of the organisation and make decisions in which the Customer will see value. See the Value Chain as key to delivering the basic minimum to the Customer and add value around the peripherals. The industry has been set up to acquire Customers, however, as the saturation in teledensity has taken shape, the industry has not evolved to become service oriented.

6.8.3.7 PRACTICAL RECOMMENDATION 7: BLEND AND INTEGRATE TECHNOLOGY INTO THE CUSTOMERS’ LIFE IN AN ENABLING WAY Mobile Telecommunications Customers use their mobile phones a lot – it is always in the hand, pocket or handbag. As technology advances, the operators can play a role in integrating the handset into the life of the Customer by enabling him to do things that he does anyway, and making these easier. This should not require the Customer to fundamentally change what he does and the way in which he does it.

Enablement should be done in an empathetic manner. Customers do not always immediately embrace new technology and the industry must find ways of enlightening Customers about the value that will be added to their life by the advancing technology. Finally, the application of the technology should be left to the Customer – let him decide how to use the technology in the most appropriate manner that simplifies his life and makes it easier.

An emerging, potentially valuable group of technologies for Customers is the ‘Internet of Things’ (IoT). IoT comprises sets of integrated, connected applications and services in areas like health, personal and home, enterprise, as well as utilities and

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mobile (Atzori et al., 2010:2787). IoT is a paradigm of connected, collaborative visions and technologies that are connected and ubiquitous in the lives of Customers to create a smart environment. This makes information and communication technologies to make services and utilities more aware, interactive and efficient (Gubbi et al., 2013:4).

6.8.3.8 PRACTICAL RECOMMENDATION 8: DEVELOP HIGH SERVICE STANDARDS AND EXPERT KNOWLEDGE In order to satisfy a Customer and engage him emotionally, there must be a set of service standards and comprehensive, integrated measures to view the Customer’s perception of service and experience. Details and handovers must be abstracted and suitable, and acceptable resolution quality and resolution time should be communicated.

Establish and implement high service standards at customer-facing touchpoints. Develop the skills to speed up service and develop the competency of deep analytics and expert knowledge. Implementing this is of value to the Customer when the expert knowledge is used to guide the Customer’s understanding and decisions, as well as address his needs. Operators can add value in matching a proposition to Customers’ needs; behave as an expert, trusted advisor. This means moving towards the emotional realisation that value can be added by providing information for free to meet the Customer’s need.

6.8.3.9 PRACTICAL RECOMMENDATION 9: INVOLVE THE CUSTOMER IN DECISION-MAKING Operators must bring the Customer along on the journey of evolving technology. Rather than think and assume on behalf of the Customer, operators should involve Customers in the innovation and decision-making process through prototyping and segment-driven scenario execution.

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Making business decisions on behalf of the Customer, or without involving the Customer, is not appropriate in the contemporary and evolving market. Develop a system to interact with Customers, work alongside Customers, prototype with them, and involve the Customer in business decisions and shaping the initiatives, processes and products that will meet the Customer need and simplify their lives.

The right tools, the right targets and the right measurements need to be put in place, and to be aligned to ensure that the company is listening and taking action on what Customers are saying, and translating this in to a personal and differentiated Value Chain that builds loyalty, thereby providing sustainable profitability.

6.8.3.10 PRACTICAL RECOMMENDATION 10: REDUCE BARRIERS TO ENTRY AND USE Growth comes from Customer understanding. The industry needs to contextualise this, reduce barriers to understanding as well as the barriers to entry for new technologies and services. The accessibility and process for Customers to sign up, learn and use products should be simplified and improved to be more intuitive and natural. Every touchpoint should be available to a Customer to perform any transaction.

Product innovation should develop, package and communicate services that enable a Customer to do what he already does easily, without requiring the Customer to fundamentally change what he is doing, or how he does it.

6.8.3.11 PRACTICAL RECOMMENDATION 11: ACCENTUATE THE MESSAGE AROUND OPERATOR UNIQUENESS Customers do not understand high-level strategies and operating plans. Neither do they want to. Operators in the industry should do a better job of communicating what they offer, how they support a Customer’s lifestyle, and what they do that is different and unique. Network operators should accentuate the message around value / cost, brand uniqueness and strength as in addition to coverage.

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Operators need to be truthful and authentic – even when there are problems. Finding a balance between perfect brand positioning and admitting to mistakes and failures, are delicate. Doing the right thing brings goodwill.

6.9 EVOLVED MODEL FOR DELIVERY OF CUSTOMER VALUE Chapter 1 introduced a theoretical model that depicted the perspective of the researcher reflecting the interplay between the “Mobile Operator” World and the “Customer” World. The model depicted in Figure 1.2, further served to graphically define the scope and boundary of the research.

Figure 1.2: Graphic depiction of the scope and boundary of the research study Source: Researcher’s own construct

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With the completion of the data gathering and analysis activities of the research project concluded, a finalised model is now presented.

The research findings and conclusions have shown that Figure 1.2 remains relevant in describing the interplay between the internal “Mobile Operator” World and the external “Customer” World. What the research further established, are the specific components, or levers that can be manipulated by organisations to influence Customer Value and Customer Experience. Resultantly, the model presented in Figure 6.1 complements the Figure 1.2.

The updated model in Figure 6.1 reflects the dynamic and multidimensional natures of the Mobile Telecommunications Industry operators, of the Customer, and of impacting Customer Value.

Figure 6.1: Organisational Levers to improve and deliver Customer Value Source: Researcher’s own construct 200

Figure 6.1 indicates the following dimensions and levers of Customer Value: • Phases that the organisation should go through to determine the aim, planning, execution, measurement and result of Customer Value. • The four levers that directly influence Customer Value – Strategy, Value Chain, Enablers and Customer Experience. • Two axes that indicate a desired evolution in organisational maturity, as well as an evolution in maturity in management of levers and quality of execution. These maturities contribute to the degree of excellence in delivery of Customer Value. • Products as the vehicle to transfer Customer Value. • A perpetual cycle of measurement, feedback, adjustment and refinement of the levers. • A systems-like model of additional levers that correspond to the components in Figure 1.2. Inputs include the organisational vision and objectives, Customer expectations and brand message. Enablers need to consider these inputs, and translate these inputs into results that the Customers, as well as the organisation will value. This is achieved through capability management, and delivered over the touchpoints where Customers interact with the operator.

6.10 GRAPHICAL SUMMARY OF THE RESEARCH STUDY In order to display the full linkage of the components of the research study, the overall project is summarised graphically. This summary links with the research objectives and secondary objectives through the research findings and research recommendations:

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Figure 6.2: Graphic depiction linking objectives, findings and conclusions of the research study Source: Researcher’s own construct 202

6.11 LIMITATIONS OF THE STUDY The main aspect that may affect the research study adversely is the nature of the qualitative research. Because of the research paradigm and research design, the research will be subjective. The researcher is a part of the world that he is investigating and his biases, feelings, perceptions, and actions may be guided by his interpretation of the world as it relates to the research subject.

The other significant factor that may have a limitation on the study is the ability of the research cases to relate to the research topic on a deep enough experiential, scientific or academic level. It may be that the perspective of the cases is ‘unsuitable’ on a purely academic level – as a point of departure into the study - but their insights and understanding from their respective perspectives may assist in compiling a relevant body of knowledge that brings new insights to the table in the context of the research project.

There is awareness that these impacts may, in some cases, cause readers of the study to be cautious in their acceptance of the research results. However, there is also a belief that the impressions and perceptions of any stakeholder, whether these are in ignorance or otherwise, are important and ought to be considered and included in the study. Everybody’s opinion matters, irrespective of validity and accuracy.

In the execution of the qualitative data gathering, the research used a qualitative, open interviewing process. This process included a lot of flexibility that allowed for open exploration of areas of particular interest for the researcher – based on the role and context under which the research participant was purposively selected and invited to participate in the research study. This was in order to interrogate specific insights. In doing so, a limitation of the standardisation of questions and answers was introduced.

A lot of important information was left out of the evidence. The sentiment of the answers was captured in the summary at each step of coded information, but due to

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the requirement to reduce the amount of evidence to between five and seven quotations, a lot of evidence that I would have liked to include, had to be deleted. The interviews were recorded and transcribed, so at the request of the University, any of the participants, or other stakeholders, this evidence will be produced.

Not all of the initial twenty-five invitees who were identified and invited to participate in the research study, were willing to do so. Ultimately, sixteen participants were interviewed. Significant representation of Customers and organisational stakeholders in various organisations within the industry was secured. The views shared will be from a single stakeholder from a particular Value Chain activity, or business function. Notwithstanding, the perspective of the participant is significant on its own merit, but the opportunity to gather complementary, or opposing views from different stakeholders within the same division, is lost. This is partly impractical due to the logistical requirements for the organisation, recording, transcribing and analysing of data.

Some of the interview recordings failed. Field notes were not written down during the interviewees due to reliance on the recorded interviews. This meant that some of the insights shared by participants could not be captured and transcribed. Perspectives shared during this time could not be documented, analysed and included as insights or findings for the research study.

6.12 PROPOSED FUTURE RESEARCH Future research stems from the recommendation made that a multidimensional ‘n- gon’ model should be developed that integrates the multiple, influencing dimensions of Customer Experience and Value Chain interplay. Such a model can bring a “plug- and-play” approach to understanding what the cost, contribution, impact, cause and effect of the strategy and Value Chain in bringing Customer loyalty, imply.

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Such future research should include the qualitative and quantitative aspects of the dimensions that influence Customer Value, as well as have the ability to simulate the outcomes for verification and analysis against the organisational objectives.

6.13 CONCLUSION Chapter 6 has concluded the research study by documenting research findings and conclusions that emanate from the empirical, qualitative study. The methodological process followed in executing the study has provided findings and conclusions.

Theory recommendations, research method recommendations and practical business application recommendations are deduced from the research process. A logical linkage of the research objectives, research insights per chapter, as well as findings and recommendations provide an answer to the research question.

The study ends with a discussion on the limitation of the study, as well as suggestions on potential future research linked to the findings and outcomes of this project.

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ANNEXURES

ANNEXURE A: GLOSSARY OF TERMS TERM DEFINITION Capability The combination of people, process and systems (technology) and how these elements work together within a particular context, and in order to achieve a particular outcome for a Customer Convergence Previously separate technologies such as voice, data, and video that now share resources and interact with each other synergistically Customer Delight Index A metric that measures one or more of the Customer relationship, service quality or product quality attributes Customer Experience The sum of all experiences a Customer has with a supplier of goods and/or services, over the duration of their relationship with that supplier Customer Experience Strategically and proactively designing the business Management operations with the intention to create the emotions of happiness and loyalty for each individual Customer and for each interaction that the Customer has with the company and its products Customer Relationship A mode for managing a company’s interactions with Management current and future Customers that involves using technology to organise and automate transactions Customer Service A business function that deals with Customer queries, or a series of steps (processes) that involve interacting with a Customer to assist the Customer with support or benefits during the Customer life cycle Global System for Mobile A standard developed by the European Communications Telecommunications Standards Institute (ETSI) to describe protocols for second generation (2G) digital cellular networks used by mobile phones Geographic Number Functionality for fixed-line Customers to switch Portability between operators while retaining their phone number General Packet Radio A packet oriented Mobile data service on the 2G and Service 3G cellular communication system's global system for Mobile communications

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TERM DEFINITION Gross Domestic Product The market value of all officially recognised final goods and services produced within a country in a year, or other given period of time Independent The regulator for the South African communications Communications Authority of sector, responsible for the regulation of broadcasting, South Africa postal and Telecommunications services Information and An umbrella name for the technology-driven industry Communication Technology that encompasses computer and telephone related technology Internet of Things The network of physical objects or "things" embedded with electronics, software, sensors and connectivity to enable it to achieve greater value and service by exchanging data with the manufacturer, operator and/or other connected devices Internet protocol The primary way that data is transported on the Internet, by splitting it up into packets International A specialised agency of the United Nations that is Telecommunication Union responsible for issues that concern information and communication technologies Market saturation The uptake of a product is so widespread, that looking ahead – it is unlikely that sales growth will occur outside of normal population growth Mobile Number Portability The ability to switch between Mobile Telecommunication operators while retaining the use of your mobile phone number Mobile penetration / The ratio of mobile phones as compared to the size teledensity of the population Mobile Telecommunications The ability to make a phone call, or communicate on a wireless device, or whilst being on the move Multimedia Messaging A standard way to send messages that includes Service multimedia content to and from mobile phones. It extends the core SMS capability that allowed exchange of text messages only up to 160 characters Mobile virtual network A wireless communications services provider that operator does not own the wireless network infrastructure over which the MVNO provides services to its Customers National Basketball The pre-eminent men’s professional basketball Association league in North America, also considered to be the premier basketball league in the world Net Promoter Score An indicator that measures a Customer’s loyalty to a provider Over-the-top Content that is delivered to the end-user over the 225

TERM DEFINITION Internet by a third party in such a way that the provider of the Internet service is responsible for the delivery of the content, yet without the ability to control distribution of the content. Research problem, research A standard of logic (process) for research design that design, empirical evidence, Johann Mouton defined for empirical research that and conclusions (ProDEC) integrates the problem, design, evidence and conclusions Regulation of Interception of Act was put in place by the South African Communications and Government requires, amongst other things, for Provision of Communication- Customer information to be recorded and verified Related Information Act Service Provider Independent cellular solutions providers that offer Customers the choice of services across operator networks Voice over Internet Protocol Technology that allows voice and interactive communication to happen over internet capability Worldwide Interoperability for A standards-based, wireless communications Microwave Access technology enabling the delivery of last mile wireless broadband access as an alternative to cable and DSL

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ANNEXURE B: LIST OF ABBREVIATIONS ABBREVIATION DESCRIPTION CDI Customer Delight Index CE Customer Experience CEM Customer Experience Management CEO Chief Executive Officer CRM Customer Relationship Management ENPS Employee Net Promoter Score GDP Gross Domestic Product GNP Geographic Number Portability GPRS General Packet Radio Service GSM Global System for Mobile Communications ICT Information and Communication Technology ICASA Independent Communications Authority of South Africa IOT Internet of Things IP Internet Protocol ITU International Telecommunication Union JSE Johannesburg Securities Exchange MMS Multimedia Messaging Service MNP Mobile Number Portability MTN Mobile Telecommunication Networks MVNO Mobile Virtual Network Operator NBA National Basketball Association NPS Net Promoter Score OTT Over the Top ProDEC Research problem, research design, empirical evidence, and conclusions RICA Regulation of Interception of Communications and Provision of Communication-Related Information Act SP Service Provider USA United States of America VOIP Voice over Internet Protocol WiMax Worldwide Interoperability for Microwave Access

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ANNEXURE C: INTERVIEW SCHEDULE 90 minute interviews were scheduled and conducted as follows: # INTERVIEWEE ROLE DATE A Donna Packs ** IT Systems Engineer 10/04/2010 B Brandon Oliver ** Manager: Retail Support 13/04/2010 C Sue Gad ** Consultant: Product 13/04/2010 Management D Sara Bunting ** Specialist: Contact Centre 15/04/2010 Processes E Bert van der Westerhuisen ** Executive Head: 19/04/2010 Commercialisation F Lynne Morrow ** Executive Head: Credit and 29/04/2010 Risk G Sheri Mason ** Specialist: Business 04/05/2010 Intelligence H Cheryl Stillman ** Manager: Customer 11/05/2010 Experience I Sheila Abraham ** Manager: Product 12/05/2010 Operationalisation J Andrew Vosloo ** Executive Head: Logistics 17/05/2010 K Joe Clark ** Executive Head: Systems 19/05/2010 L Mark Rodney ** Sales Executive 22/05/2010 M Mandla Qunu ** Manager: Engineering 24/05/2010 N Lisa Colins ** Marketing Manager: 26/05/2010 Products O Monica Louw ** Customer 08/07/2010 P Nicky Pughe ** Customer 01/08/2010

** Pseudonyms used to conceal the identity of research participants

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ANNEXURE D: CATEGORIES AND CODES EXTRACTED FROM THE DATA The following categories and codes were extracted through qualitative data analysis using the content analysis technique: CATEGORY SUB- CODE CATEGO- RY Telecommunic Industry How it has played out ations Whether companies are doing the right things in response Recommendations for changes in the industry Leading/directing the change What the industry will look like in 10 years Growth What will grow the company What will grow the Customer Experience What the metrics are to measure growth Product What the core product is What attracts a Customer to a provider What drives the creation of products Value Chain Definition of Value Chain Description of Value Chain for my company How Value Chain impacts the Customer Experience Whether Value Chain adds value to the Customer How Value Chain adds value to the Customer Areas of Value Chain that add the most value to Customers Areas of Value Chain that add the least value to Customers Theoretical frameworks are great. Application may need to be different Customer How Customers view company functions The view of a company for the value that it adds to the life of Customers Description of Customer Experience Ways that companies measure Customer Experience Ways that Customers alert companies about Customer Experience Recommendations for changes to the way the companies run Assessment of a link between Value Chain and 229

CATEGORY SUB- CODE CATEGO- RY Customer Experience Definition of the link between Value Chain and Customer Experience Functional areas where there is a Customer Experience How the market views service from operators Where Customer Experience starts and ends Business unit Structures of business units Strategy Assessment of strategic initiatives that are in implementation Link between strategic initiatives and company strategy Link between strategic initiatives and Value Chain Understanding that Customers have of strategy How the Value Chain, Customer Experience, strategy impact each other Topic What the phrase ‘Value Chain analysis of the Mobile Telecommunications Industry – the effect on the Customer Experience’ makes me think of Brand Where brand engagement starts and ends Interviewee My personal philosophy in dealing with Customers My background Closing statements

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ANNEXURE E: SAMPLE INTERVIEW INVITATION LETTER The following invitation letter was sent to each potential interviewee: Email: eldon.phukuile@<>.com Phone: 011 <<555 6666>> <>

<> By Email: <>

RE: Invitation to participate in research interview

Dear <>,

I am performing a research study for the degree MPhil Business Management at the University of Johannesburg. I would like to extend an invitation to you to participate in the data gathering (interview) process.

The approved topic of the dissertation is “Customer Value creation in the South African Mobile Telecommunications Industry.” This study will analyse the relationship between the areas of the Value Chain of the South African Mobile Telecommunications Industry and its effect on the Customer Experience.

The research emphasis is on understanding business / social perceptions, feelings and behaviours. There is no hypothesis for this study. The gathered data will be analysed with an appropriate technique allowing theory and conclusions to arise organically from trends that emerge within the data.

The interview selection is purposive / judgmental. This means that the sample of interviewees is specific and targeted - due to the unique ability to add particular insights and value within a particular context.

I plan to conduct semi-structured data collection interviews. The duration is approximately 90 minutes and the interview will be recorded - due to the requirement that the interviews

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be transcribed and attached to the dissertation as evidence.

The highest standard of research ethics will be observed at all times. This includes the requirement to exclude company names, interviewee details and company confidential information from the dissertation.

A date and time for the interview will be agreed upon after acceptance of the invitation. Please do not hesitate to contact me with any questions / queries.

Sincerely

Eldon Phukuile

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ANNEXURE F: PLANNED INTERVIEW QUESTIONS Ninety-minute interviews were scheduled and conducted. The interview questions were grouped into themes. A clear objective was tied to each question: THEME QUESTION OBJECTIVE Telecomm- Against the background of the What is the perception on whether unications changing ICT landscape, would you the industry has changed? say that Telecommunications 1. Has it changed? companies are doing the right 2. Has it not changed? things or would you recommend 3. Indifferent? any changes? 4. How has it changed? You are a Customer of/work for a Is there room for growth? Telco. What are a few of the key Has the industry realised it? things that would grow the Are all the 'gaps' or potential company? 'growth areas' identified? What are a few of the key things Exploration of the interviewee’s that would grow the Customer thoughts and perceptions. Experience? Value How would you define a Value Is there knowledge of Value Chain Chain? Chain? Does there need to be knowledge of Value Chain? How would you describe your Is there a common understanding company's Value Chain? of Value Chain? Does there need to be an understanding of Value Chain? How do you think the company's Assess the Value Chain impacts Value Chain impacts / affects the the Customer? Customer? 1. No impact. 2. Low impact. 3. High impact. 4. Cannot say. Do you think that the company's Assess whether the Value Chain Value Chain adds value to the adds value to the Customer. Customer? How? Assess the views on how the Value Chain adds value to the Customer. Which area adds the most value to Assess the views on which areas the Customer? of the Value Chain add the most value. Which area adds the least value to Assess the views on which areas the Customer? of the Value Chain add the least 233

THEME QUESTION OBJECTIVE value. Customer How do you suspect Customers Assess what the view is on how Experience view the company functions? Customers view the internal operations of a company. Do you think that Customers view Assess what the view is on the company in terms of the value it whether Customers view the adds to their lives? company for its core products, or for the value the company adds to their lives through their products. How would you describe Customer Assess the view / interpretation / Experience? definition of Customer Experience. Are you aware of any way that the Assess whether there is company is measuring Customer knowledge of tools to measure Experience? Customer Experience. Assess whether there is knowledge of tools to measure Customer Experience. Are you aware of any way that the Assess whether Customers are Customer is alerting the company alerting operators of their issues. about Customer Experience? 1. Customers may live with the issues. 2. Customers have no issues. Against the background of the Assess the opinion on whether Value Chain, would you the Value Chain is effective and / recommend any changes to the or useful. way the company runs? Would you say there is a link Assess whether there is a link between Value Chain and between the Value Chain and Customer Experience? Customer Experience. Define what the link between Value Understanding what the link Chain and Customer Experience between Value Chain and is? Customer Experience is. In which functional areas of the Assess the opinion on which business is there a Customer business units provide a Experience? Customer Experience. Business How would you describe the Assess the opinion on the Unit structure of your business unit - is structure of business units. it: - Defined by Value Chain? - Defined by organisational structure?

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THEME QUESTION OBJECTIVE - Defined by Customer needs? - Any other? Strategy Are there sets of specific strategic Assess whether there are specific initiatives that are operational within strategic initiatives in force. your business area? Are these initiatives linked to Assess whether there is a link company strategy? between strategic initiatives in business areas and the strategy of the organisation. Are these initiatives linked to the Assess whether there is a link Value Chain? between strategic initiatives in business areas and the Value Chain. Closing Closing statements: Are there any Round up any thoughts triggered. other important / pertinent / relevant points that contribute to the study?

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ANNEXURE G: PLANNED INTERVIEW TRANSCRIPT TEMPLATE Date: XX May 20XX.

Interviewee: XX

Interviewer: Eldon Phukuile

Topic: Customer Value Creation in the South African Mobile Telecommunications Industry.

Notes: Crutch words and false starts have been removed from the transcript.

Eldon Phukuile (EP):

Interviewee (XX):

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