Esat Bt - Managing the Complexities of Sponsorship Campaigns

Esat BT - Managing the complexities of sponsorship campaigns

Esat Telecom was established in 1991 by a consortium led by Denis O'Brien.

They're objectives were:

- to offer consumers an alternative telecommunications service provider to the current one, Eircom.

- to challenge the then Government monopoly by forcing deregulation of the Irish Telecom telecommunications industry.

In 1995 the industry was finally opened to competition.

Due to a strong Irish economy Esat expanded its company portfolio through the acquisition of:

- Labyrinth, BridgeCOM: network solutions

- Ireland on line: an internet service provider

- Ocean telecom: a voice/internet service provider.

In 1997 they launched Esat Digifone in direct competition with Eircom's mobile phone provider Eircell.

In November 1997 Esat Telecom became the first Irish company to obtain a quotation on the NASDAQ stock exchange.

As being a listed company, they were exposed to potential hostile takeover.

In January 2000 British Telecom (BT) acquired Esat Telecom Group in a deal worth €2.4 billion.

BT established Esat BT as the brand name to head up their Irish operations among their European network.

Esat BT no longer competes in the mobile phone communications market, this part of the business being now managed independently by O2. This allowed Esat BT to put more focus on domestic customers, SMEs and corporate client markets.

By operating within these three markets, Esat BT currently has an overall share of the Irish telecommunications market of 18%.

Strengths - Internal Analysis

Esat BT has 40% share of the large corporate sector (some of their customers include Dell, B.O.I. and Apple).

They have the ability to offer their domestic costumers a greater choice on telecommunications packages (i.e. Broadband & Talk).

Esat BT has the ability to offer a complete integrated package of communications solutions that meets their business customers' needs, such as broadband Internet, DSL (direct subscriber line) and Wi-Fi (Wireless broadband Internet Connectivity).

It currently owns well established brands such as Ireland on Line and Ocean telecom.

Esat BT appeals to the younger more technologically minded consumer.

Esat BT has a large support network - 1000+ employees.

In a short period of time Esat BT has claimed 18% of the overall telecommunications market.

Esat BT has the advantage of being part of British Telecom Group - access to expertise and resources in various fields, marketing, technical...etc. (i.e. a Group sponsorship department with defined sponsorship objectives which ensures consistency with the company's core values and image).

The Esat BT association with the Young Scientist & Technology Exhibition is/has been successful managing to avoid the legacy effect of the previous sponsor Aer Lingus (33 years).

Weaknesses - Internal Analysis

Esat BT don't have the physical infrastructure which is owned by Eircom (i.e. exchanges and lines).

Not directly involved in the mobile phone market.

Hard for them to communicate some of their products to the target audience because of the complexity and technology involved.

The Group sponsorship department is based in the UK - not always sensitive to local market environment.

Esat BT is governed by a policy paper on sponsorships. By not adhering to this policy in its entirety lead to poor decisions (The Dunphy Show).

It's a British company and in the current environment can offer a potential influence on the choices of the customers.

Low brand awareness for its various core products.

Low penetration in the residential market.

Opportunities - External Analysis

Greater access to the Internet allows for expansion of promotion of the product portfolio aimed at Esat BT's specific target audience (younger more technologically minded consumer).

Stronger growth is predicted in non-traditional sponsorship sectors such as: education, the arts, environment and cause-related activities.

High potential for growth in the SME segment (currently 20% market share) and the residential segment (6% market share).

Sponsorship industry is growing with a predicted 5% annual increase.

Work in collaboration with other commercial entities (e.g. Dell, B.O.I., Apple).

Expand the target market (e.g. grey market).

Threats - External Analysis

Deregulation of the industry opens the market to potential new entrants.

Competitors - Eircom, Irish Broadband, Eircom Broadband and Smart.

Heavy discounting by competitors ads to the competitiveness in the market place.

The sponsorship market is becoming very cluttered - limited number of premier sponsorships available.

The increasing costs of sponsorships decreases cost effectiveness.

With flexibility to view movies, TV series, sports events via the Internet (ads being edited out) the key sponsors not always recognised.

Porter's Five Forces

Competitive rivalry within the industry - Eircom had for a very long time the monopoly for the telecommunications industry in Ireland and is still the major market share holder. It is an Irish owned company. They sponsor the RTE weather forecasts and the soccer league (Eircom League) to