Strategic Management Analysis of Ufone
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Transcript of Strategic Management Analysis of Ufone
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STRATEGIC MANAGEMENT ANALYSIS
UFONE OF PAKISTAN CELLULAR INDUSTRY
28 DEC 2011
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SEQUENCE OF PRESENTATION• An overview of Pakistan Mobile Industry• Vision Statement of Ufone• Mission Statement of Ufone• Analysis of Mission Statement• IFE Matrix• EFE Matrix• CPM Profile• SWOT Analysis/Matrix• SPACE Matrix
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AN OVERVIEW OF PAKISTAN CELLULAR INDUSTRY
• 5 M cellular subscribers in 2004• Now 108.89 M subscribers in 2011• Initially Voice was the focus• Now Data & VAS are also the focus• 3G licensing policy under active considerations• Cellular Tele density increased from 3.3% (2004) to 62.5%
(2011)• This means 6 out of 10 people own cellular connection• Coverage of about 92% of the land area• More than 10,000 cities/towns/villages are under the
umbrella of cellular services• PTA is the regulatory authority
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Ufone Profile
• Pakistan Telecommunication Company Limited(PTCL),a wholly owned subsidary of PTCL
• Started its operations in 29 Jan 2001 under the brand name of “Ufone”
• As a result of PTCL’s privatization,Ufone became part of Emirates Telecommunication Group (ETISALAT) in 2006
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Competitors of Ufone• Mobilink, the Pakistani unit of Egypt-based
telecommunication company Orascom. It has been operating in Pakistan since 1994 with 31% market share now
• Norweigen Telenor, has started its operations in 15 Mar 2005 with 21% market share now
• Warid, owned by the Abu Dhabi group of the United Arab Emirates and sister-concern of Wateen group started its operations in 15 May 2005 having a billion dollar investment in Pakistan. About 17% market share
• CM Pak(Zong), formerly Paktel, was the latest target of foreign acquistion. After it got acquired by China Mobile,it was renamed as Zong, having 6% market share
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25%
21%
17%6%
Cellular Subscribers Market Share Dec 2010
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Cell Sites
• The hallmark of the success of any service pertain to its geographical presence and coverage in a country
• All mobile operators have collectively erected 30,169 cellular sites by end 2010 in different geographical locations of the homeland
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Vision Statement
“ To be the leading telecommunication services provider in Pakistan while exceeding
shareholders value and employee expectations”
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Mission Statement
“To be the best cellular communication option
for U. We aim to provide U with quality coverage, superior connectivity, clear signals and voice quality. where ever U are, U-fone keeps U connected”
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Mission Statement Analysis• Customers Y• Product/services Y• Markets Y• Technology Y• Concern for growth/survival N• Philosophy N• Self-efficacy N• Concern for society N• Concern for employees N
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Proposed Mission Statement
“To be the unmatchable mobile system of communication in Pakistan, thus providing the best values to our customers, employees, business partners and shareholders”
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Ufone Product Line
• Prepay
• Postpay
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Ufone Packages & OffersPrepaid Packages Postpaid Packages
U-Won Supplementary Connection
Uth Package Boundless Roaming
Lady’s Package Black Berry
Kisan Package U-fone Conference Call
Panch ka Pandra International MMS
Bundle offer IDD Bucket
SIM lagau offer Ur Edge
U-fone member banau offer
Prepaid Roaming
International MMS
U Share
U Loan
Sau Par do Sau
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Internal Factor Evaluation (IFE Matrix)
Sr No Strengths Weight Rating Score
1 Network Coverage (Geographic) .08 4 .32
2 International Roaming .06 4 .24
3 Pioneer of MMS/GPRS .04 3 .12
4 License for AJK & NAs .02 4 .08
5 Quality Coverage (Connectivity) .09 3 .30
6 VAS .05 3 .15
7 Lowest Prices .10 4 .40
8 2nd Largest Market Share .08 3 .24
9 Representation of PTCL (as subsidiary) .03 3 .09
4= Major Strength3= Minor Strength
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Internal Factor Evaluation (IFE Matrix)
Sr No Weakness Weight Rating Score
1 Behind on Excessive Demand .02 1 .02
2 Poor Organizational Structure .05 2 .10
3 Stagnant Profitability .04 1 .04
4 Overly Dependant of PTCL .04 1 .04
5 Lack of Franchise .07 1 .07
6 Lack of Innovative Services .08 2 .16
7 Competition .10 2 .20
8 Internal Problems .05 2 .10
Total 1.00 2.67
1= Major Weakness2= Minor Weakness
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External Factor Evaluation (EFE Matrix)
Sr No Opportunities Weight Rating Score
1 Can target Corporate Sector .10 4 .40
2 Global Expansion .10 3 .30
3 Publicity & Marketing .10 3 .30
4 Develop new VAS .10 3 .30
5 Develop Franchise in NA/Remote Area .08 1 .08
6 Competitive International SMS/MMS Packages
.06 2 .12
4= Superior Response3= Above Average2= Average1= Poor
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External Factor Evaluation (EFE Matrix)
Sr No Threat Weight Rating Score
1 Govt Interference .05 2 .10
2 Dependency on PTCL Cellular License .05 2 .10
3 Pension payouts .08 2 .16
4 Increased Health Care Cost .08 2 .16
5 Tough Competition .09 4 .36
6 Pressure Groups of Towers .02 3 .06
7 Economic Problems .09 4 .36
TOTAL 1.00 2.80
4= Superior Response3= Above Average2= Average1= Poor
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Competitive Profile Matrix (CPM)Critical Success Factors (CSF)
Mobilink Ufone Telenor ZongWeight Rating Score Rating Score Rating Score Rating Score
Market Share .15 4 .60 3 .45 3 .45 1 .15
Growth Rate .10 2 .20 3 .30 3 .30 3 .30
Financial Strength
.08 3 .24 2 .16 3 .24 3 .24
Management .12 4 .48 3 .36 3 .36 3 .36
Advertising & Marketing
.10 3 .30 4 .40 3 .30 3 .30
Brand Name .10 4 .40 3 .30 3 .30 2 .20
Packages & offers
.09 2 .18 3 .27 3 .27 2 .18
Price competitiveness
.07 2 .14 4 .28 3 .21 3 .21
Network Coverage
.10 4 .40 3 .30 3 .30 2 .20
Connectivity .09 3 .27 3 .27 3 .27 2 .18
Total 1.00 3.21 3.09 3.00 2.32
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SWOT MATRIX Strength Weakness
Opportunity
Threat
SO Strategies
1.Market Development : Expansion of work in AJK & NA (S1, S4,O5) Oversees Market Development (S2,S3, O2)1.Product Development: Introduce innovative VAS (S5,S6,O1,O4)
WO Strategies1.Market Penetration: Target Corporate Sector Increase market share by making postpaid attractive (W3, W7,O1) Open more franchise in Remote areas (W5,O5)
ST Strategies1.Market Development: Expansion plan for AJK & NAS for enhanced coverage (S1,S2,S5,T3,T4,T5)
WT Strategies1.Maket Development Build more infrastructure and franchises in AJK/NA/remote areas (W1,W5,T2,T5)
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SPACE MatrixFinancial Strength (FS) Revenue 4Operating Income 3Assets 5Equity 5
Avg = 4.25
Competitive Advantage (CA)2nd Largest Market Share -2Lowest price -1Product Line -3Network Coverage -3
Avg = -2.25
Industrial Strength (IS)Growth Rate 6Increased Competition 4PTCL Backing 5Profit Potential 3 Avg = 4.50
Environmental Stability (ES)Economic Recession -1Rate of Inflation -2Govt Regulations -2Competitive Pressure -4
Avg = -2.25
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SPACE Matrix CalculationsInternal Factors: External Factors:
Financial Strength (FS) Industry Strength (IS) Competitive Advantage (CA) Environmental Stability (ES)
FS & IS Values: +1 worst to 6 Best CA & ES Values: -1 Best to -6 Worst
Calculation:X-axis = IS + CA Y-axis = FS + ES
= 4.50 – 2.25 = 4.25 – 2.25= 2.25 = 2
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SPACE Matrix
Defensive
CA
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Recommendations
After going through the strategic analysis of Ufone, we recommend Ufone management a combination of Market/Product Development and Market Penetration strategies generally and particularly for Postpay
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THANK YOU
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BCG Matrix
PREPAY POSTPAY
Relative Market Share (Cash Generation)LOW
LOW
HIGH
HIG
H
Mar
ket G
row
th R
ate
(Cas
h U
sage
)