Complete SWOT Analysis of Claro – A Mexican Telecom Group

Quick Stats on Claro

Founder	Manola Ayala
Year Founded	2003
Origin	Mexico
No. of Employees	100,000+
Company Type	Subsidiary
Market Cap	USD$61.28 Billion
Annual Revenue	USD$9.1 Billion
Net Income/ Profit	1.5 Billion Reals

 

Products & Services by Claro 

Claro has contributed to the telecommunication industry with various products for more than a century.

• Mobile
• Internet 
• TV 
• Voice 
• Internet of things 

Competitors of Claro

Claro contests with brands across the globe. The topmost brands are:

• Oi/Telemar
• Suddenlink
• Frontier Communications
• Comcast Corporation
• TIM Participacoes S.A.

Now as we are familiarised with the company brand and business let’s shovel into the SWOT analysis of Claro.

SWOT Analysis of Claro 

SWOT Analysis is a useful technique for developing business strategies for both new and current businesses. This simplified methodology is used to assess a company’s competitive standing. SWOT analysis of Claro can help the organisation develop effective and efficient business strategies.

To better understand the SWOT analysis of Claro, refer to the infographics below:

Below is an explicit guide to the SWOT analysis of Claro.

Strengths of Claro

The brand’s competence gives an edge over capturing the maximum market in the industry and earning more profits. Hence here we go with the strengths as follows:

• Wide Spread Distribution Network: Claro has created a reliable distribution network over its 18 years of journey that allows it to reach the majority of its potential market through innovation.
• Leading Market Position: Claro holds a leading market position because of its inception as the sole provider of wireless services in Latin America & Mexican cities. Since its inception the growth enabled the company to create a new revenue stream and diversify the economic cycle risk in the markets it serves, propelling Claro to the top of the Latin American & Mexican market.
• Highly Qualified Workforce: Through training and learning initiatives, Claro has been able to develop a highly qualified staff of 100,000+. Claro devotes significant resources to employee training and development, resulting in a team that is not just highly competent but also driven to attain greater success.
• Good Capital Expenditure Returns: Claro has a solid track record of completing new projects including international operators such as Tigo, Personal and VOX were acquired in 2011 and generated good returns on capital expenditure by establishing new revenue sources with the support of its parent company América Móvil.
• Customer Satisfaction is Just High: Claro has been able to achieve high customer satisfaction among current customers of 279 million and strong brand equity among potential customers due to its dedicated customer relationship management department.
• Strong Network: Claro is one of the most prestigious companies in the world. The strong distribution network has led to the formation of more than 27 data centres and a radio base of 242,000 including Europe.

Weaknesses of Claro

Claro’s weakness is an area where he can improve. Strategy is about making important decisions, and weaknesses are areas where a company could improve with the help of a SWOT analysis.

• Moderate Success Beyond its Core Business: Even though Claro is one of the leading organisations in its industry it has faced challenges in moving to other product segments with its present culture.
• High Prices for Small Plans: Claro struggles when it comes to the pricing of its budgeted devices. Its pricing seems to fall slightly on a higher side in small data plans ranging between 1 – 5 GB.  Claro’s competitors seemed to have an upper hand when it comes to small budgeted plans.
• Competition with Brands Affecting the Market: Although Claro has a unique marketing strategy the new brands and other existing brands are also coming up with new strategies. But to maintain the position of best telecom services they need constant advertising, improvement in their products and this causes the majority of the expenses of the brand.
• Reliance on Latin American Market for Major Revenue: As Claro has its main headquarters in Latin America and it is providing the services more efficiently and gets major revenue from Latin America. It is mostly dependent on the Latin American market and hence lacks revenue from worldwide.
• Limited International Presence: Claro currently operates in only 18 markets around the world. It should consider operating in other countries, to expand its business and create strong brand recognition and awareness in the market.
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Opportunities for Claro

Opportunities are possible areas for a company to consider to improve results, sales, and, ultimately, profit. Claro includes the following opportunities:

• Internet Users: According to Statista.com, there are over 4.66 billion active internet users in the world. Claro has a huge opportunity to increase its customer base by providing affordable data plans. 
• New Environmental Policies: The new opportunities will open doors to a level playing field for all the players in the industry. It provides a good opportunity for Claro to drive the advantage home buying new technology and gain market share for new product categories. Also to sustain the potential customers as well as loyal ones.
• Stable Free Cash Flow: The stable cash flow provides opportunities to invest in adjacent products. Hence when more cash is with the company can think of some new technologies and product segments to increase the market share. 
• Technological Advancements: The new technology provides an opportunity for Claro to practice a differentiated pricing strategy in the new market. It enables the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
• Improvement in the Customers: These days we see a very dynamic lifestyle of the people and hence lifestyle and standards mean more consumption of the products and services, and in turn more opportunities to encourage the purchase. This will eventually increase the market share of Claro.

Threats to Claro

External environmental factors that can harm a Claro’s growth are known as threats. Claro’s threats include the following:

• Strong Rivalry from other Communication Providers: There is a lot of competition in the industry these days. This affects prices, resulting in a drop in revenue or income for Claro.
• Threat from Local Distributors: Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• Client Dissatisfaction: A single dissatisfied customer can lead to a loss for the company. Understanding customers’ needs is essential for the company for long term success. A satisfied customer can bring more customers through word of mouth about the company.
• Loss of Key People to Competitors: Employees are considered as important as customers in a company. Loss of experienced employees leads to destruction in the working of the company. It is important to keep employees happy by providing remuneration, health facilities etc. 
• Global Prices: An increase in prices for data globally can affect the company’s customer base. With power surges and an increase in the prices of data, offering cheaper plans become hard for the companies as their profit cuts down.

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This ends our detailed SWOT analysis of Claro. Let us conclude our learning below.