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Concentration risk |
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GTL reports its revenues from two business segments – Network Engineering and IT Services. The focus on only two businesses exposes us to the risk of revenue concentration. GTL has managed this risk by spreading its revenues across several geographies, industry verticals, service offerings and customers. |
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Competition risk |
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GTL operates in intensely competitive markets across several geographies and service offerings; the competition can only increase in the future. |
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Some of GTL’s competitors have larger financial, technical and marketing resources; they may be able to respond faster and better to new and emerging technologies or dynamism in customer requirements. |
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For GTL, the result could be price reduction, fewer customer orders, reduced profit margins and loss of market share. |
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GTL expects that its future business growth will be driven by: |
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GTL’s ability to provide end-to-end solutions to its customers. GTL, unlike its competitors, offers a wide range of solutions, this gives it an edge over the competition and provides an effective cover for its business risks. For instance, undertaking comprehensive turnkey projects provide higher profit margins |
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GTL’s capability to acquire, retain & enlarge its customer base, which is a direct function of the quality of service, pricing and customer relationships |
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To ensure that the cyclical behaviour of any one industry or sudden changes in the industry characteristics does not adversely affect GTL, the revenue concentration across industries is monitored. Industry segments have different business cycles, competitive structures and price points; hence GTL enforces limits on revenues from specific industry segments. |
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GTL’s record so far—consistent, long-term success with large customers. |
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International operations risk |
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The risks in conducting business internationally include: |
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For each country or region that GTL operates in, changes in political and economic conditions, laws or regulations |
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Staffing and managing operations with sufficient numbers of skilled personnel |
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Employment laws and practices in different countries, including visa practices |
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Different laws concerning the protection of intellectual property rights |
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Country-specific taxes |
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Trade barriers and import / export licensing requirements |
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GTL’s international operations spread across different regions and countries reduce these risks on GTL’s business. |
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Mergers and acquisitions risk |
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GTL continually looks to invest in complementary businesses, technologies and services or enter into strategic alliances for access to processes, management, business and industry expertise. The systemic adjustments from such acquisitions and alliances potentially redirect capital and the Management attention away from other business issues and opportunities. |
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To minimize the adverse impact of a merger, acquisition or an alliance, GTL follows rigorous due diligence norms to evaluate potential mergers and acquisitions, before arriving at any far reaching decision. |
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