Globe Telecom: Redefining telecommunication in the Philippines

• Main Authors: ZERRILLO, Philip C., JOSHI, Havovi, DULA, Christopher
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2019
• Subjects: Telecommunications; Management of change; Disruption; Strategic Leadership; Organizational cultures; Consumer behavior; Communication Technology and New Media; Marketing; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/281; https://smu.sharepoint.com/sites/admin/CMP/cases/SMU-19-BATCH [PDF-Pic]/SMU-19-0031 [Globe Transformation]/SMU-19-0031 [Globe Transformation].pdf
• Institution: Singapore Management University

Globe Telecom, a leading telecommunications service provider in the Philippines, had a long history in the communications business. The company was incorporated in 1935 as an international wireless communications company connecting the Philippines to the rest of the world, and in 1994, it became the first company in the country to offer mobile telecommunications services. Nearly 25 years later, more than half of the Philippines’ 100 million residents were Globe subscribers, generating nearly US$280 million in net revenue. But the company was not always so well-positioned. Despite its first-mover advantage, Globe had found its market share steadily eroding, and by 2010, its market share had shrunk from 42% to 33% in just under six years. Morale within the company was at an all-time low, and the workplace had become toxic. Globe was clearly failing in the execution of its strategies, and also did not appear to have the right capabilities to conceive effective ones. Spearheaded by Ernest Cu, who had joined Globe in 2008 as the Deputy CEO and subsequently became President and CEO in 2009, Globe set out on a transformation journey to meet the competition head-on. It established a framework that systematically addressed these challenges by focusing on three pillars: Network; IT and Systems; Talent and Culture. Investment into these pillars proved essential to transforming Globe’s commercial offerings into an ever-growing array of sophisticated products and services supported by high-tech capabilities and entrepreneurial competencies. But was this framework robust enough to future-proof the company? Could Globe’s sheer size and complexity of its offerings become a liability going forward? This case is designed for graduate and undergraduate students, and offers them the opportunity to gain insights on how large incumbent organisations saddled by legacy systems can respond to new entrants with disruptive technologies and business models. They can also understand key strategic concepts and change management frameworks required for successful organisational transformation, and discuss competitive disruption and limiting risk exposure by leading change versus responding to it.