mobilink pakistan - strategic management

8/9/2019 Mobilink Pakistan - Strategic Management

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Section 1:

MACRO-ENVIRONMENTAL

ANALYSISANDINDUSTRY

ATTRACTIVENESS


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EXTERNAL ENVIRONMENT

Porters Five ForcesApplying Porters five forces to the Pakistani telecommunication industry allows us to garner aretrospective view of the potential attractiveness in terms of profitability of the industry. Wefirst must analyze the industry through the five-force template, which will allow us to more

accurately gauge the industry in terms of its potential.

A THREAT OF NEW ENTRANTS YES(+)

~ NO

()

1. Do large firms have a cost or performance advantage in yoursegment of the industry?

2. Are there any established brand identities in your industry?

3. Do your customers incur any significant costs in switchingsuppliers?

4. Is a lot of capital needed to enter your industry?

5. Is serviceable used equipment expensive?

6. Does the newcomer to your industry face difficulty in accessingdistribution channels?

7. Does experience help you to continuously lower costs?

8. Does the newcomer have any problems in obtaining the necessaryskilled people, materials or supplies?

9. Are there any licenses, insurance or qualifications that are difficultto obtain?

10. Can the newcomer expect strong retaliation on entering themarket?


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In this industry, the threat of new entrants is very low or in other words, the entry barriers arevery high, as shown by the above template. It is very difficult and costly to acquire the neededtechnologies and expertise to set up operations in this industry. Large amount of capital is neededfor a player to enter the market. Apart from that, to enter this industry, the new player mustobtain a license from the government which is usually a huge amount. Currently to obtain thislicense it costs $300 million and this license needs to be renewed every 10 years. It is a very biginvestment that a player needs to make in order to enter this industry. Also for the new entrant, itwould be very extremely difficult to come up with the capital to infiltrate the establisheddistribution network of the current well-established players.

It is also very difficult for a new comer to enter this market because there are already big nameslike Mobilink, Ufone, Telenor, etc which are very well established in the market. It will be very

difficult to change the perception of millions of customers and to convince them to leave theircurrent service provider. This can be seen with the example of zong, a new entrant. Even thoughit has done a lot of promotions to break through the competition, it has hardly managed areasonable share for itself. So new entrants will face very heavy resistance from the alreadywell established brands who not only have very high brand equity, but also with their experiencethey can lower down their prices without considerable damage to their brands, to force the newentrant out of business. Thus this low threat of new entrants makes it a favorable point for theindustry.

Vodafone and Orange5 are two international companies who have been trying to penetrate in thePakistani telecom industry, but have been unsuccessful so far. They still have not given up and

are still trying to obtain the license to operate here.

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B BARGAINING POWER OF BUYERS YES(+)

~ NO

()1. Are there a large number of buyers relative to the number of

firms in the business?

2. Do you have a large number of customers, each with relativelysmall purchases?

3. Does the customer face any significant costs in switchingsuppliers?

4. Does the buyer need a lot of important information?

5. Is the buyer aware of the need for additional information?

6. Your customers are not highly sensitive to price.

7. Your product is unique to some degree or has accepted branding.

8. You provide incentives to the decision makers.

Judging by the template above, the buyer power is quite high for this industry. The main reasonfor this are there are a lot of price sensitive customers who face no significant costs whileswitching to another supplier. This gives buyers considerable power over the industry. All theplayers in the market work to cater to the needs of the customers, trying to come up with betterand more attractive packages every now and then, to broaden their consumer base and tomaintain their existing one. A new SIM of any mobile service costs Rs.150 which is a quitecheap. Plus, the product itself is not technical to understand so buyers can easily switch from oneservice provider to another, without facing any difficulty in the process. However, there are

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established brands in this industry and quite a few people are brand loyal customers who wouldswitch over to other brands that easily. But the portion of such customers is very small and themajority is price sensitive. High buyer power proves to be unfavorable for cellular serviceproviders.


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C THREAT OF SUBSTITUTESYES

(+)

~ NO

()1. Substitutes have performance limitations that do not completely

offset their lowest price. Or, their performance is not justified bytheir higher price.

2. The customer will incur costs in switching to a substitute.

3. Your customer has no real substitute.

4. Your customer is not likely to substitute.

The threat of substitutes in this industry is extremely low. It can be said to be almost negligiblehence it does not affect the profitability of the industry. One thing is that the customers if want toswitch to a substitute, they will then have to incur a considerably high cost to do so. Plus no realsubstitute exists for cell phones. The closest thing to a substitute is the CDMA phones and thewireless phones. A few years ago, the demand for CDMA technology was high, but that wasattributed to poor service of PTCL connections. So the shift to CDMA was the action ofeliminating landlines from homes and keeping CDMA phones instead. The use of cell phoneswas hardly affected by it. Hence no real substitutes for mobiles, and therefore mobile serviceproviders, exist. This is an extremely favorable aspect of the industry.

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The main suppliers for the telecommunication industry comprise of the SIM card manufacturersand the scratch card manufacturers. Apart from them, there are suppliers who handle thelabeling, packaging and printing of the packet in which the SIM card is sold.

The industry has a lot of such suppliers to choose from which gives the industry an edge over thesuppliers. The SIM card manufacturers are vast in number and the companies also have theoption of choosing a foreign company or a local company. The players in the industry do nothave to deal with the same suppliers and they can easily switch to other suppliers, depending ontheir prices. For suppliers, their clients are very important to them as they buy a major portion oftheir production and also because there is not a large clientele for them. Packaging and printingdo not require any special expertise as well and for this companies can go to any supplier. There

D BARGAINING POWER OF SUPPLIERSYES

(+)

~ NO

()1. My inputs (materials, labor, supplies, services, etc.) are standard

rather than unique or differentiated

2. I can switch between suppliers quickly and cheaply.

3. My suppliers would find it difficult to enter my business or mycustomers would find it difficult to perform my function in-house.

4. I can substitute inputs readily.

5. I have many potential suppliers.

6. My business is important to my suppliers.

7. My cost of purchases has no significant influence on my overallcosts.

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are again a large number of suppliers for this. Hence the bargaining power of the suppliers isconsiderably low which is favorable for the telecommunication industry.

E DETERMINANTS OF RIVALRY AMONG EXISTING COMPETITIONYES(+)

~ NO()

1. The industry is growing rapidly.

2. The fixed costs of the business are a relatively low portion oftotal costs.

3. There are significant product differences and brand identitiesbetween the competitors.

4. The competitors are diversified rather than specialized.

5. It would not be hard to get out of this business because there areno specialized skills and facilities or long-term contractcommitments, etc.

6. My customers would incur significant costs in switching to acompetitor.

7. My product is complex and requires a detailed understanding onthe part of my customer.

8. My competitors are all of approximately the same size as I am.

The telecommunication industry has one of the most competitive rivalries in any industry. Thereare a large number of buyers and there are only few players in the industry to cater to this vastmarket. The price to enter the market is really high and similarly to exit is also very high.

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Therefore, the players in the market are there to stay. The market is extremely price sensitive andeven if one service provider reduces prices, then the others will have to follow suit otherwisethey will lose out on their piece of the pie and their negative churn will increase. There aresignificant brand differences which have created brand loyal customers, but looking at the totalmarket, the portion of loyal customers is very small.

Another interesting technology has evolved which has served to increase rivalry within theindustry. This technology, popularly referred to as MNP6 (Mobile Number Portability), providesmobile users with the opportunity of keeping their original numbers while switching over toother networks. This has further made it easy for mobile users to switch from one network toanother, whenever a good deal is offered.

Currently the market leader in the industry is Mobilink with a market share of 31%. Just 2 yearsago, this figure was approximately 45% which just shows that the rivalry has increased a lot inthe past couple of years. The major competition that Mobilink faces is from Telenor with amarket share of 22% and Ufone with a market share of 20%. After that Warid telecom comes inwith 18% of the market.

Therefore the rivalry in this industry is extremely high which proves to be an unfavorable for theindustry.


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F OVERALL INDUSTRYRATING Favorable Moderate

Un-favorable Implications

1.

Threat of new entrants. 8

1 1 Threat of new entrants isvery low

2. Bargaining power ofbuyers.

3

0 5 Bargaining power of buyersis high

3. Threat of substitutes. 31 0 Threat of substitutes is very

low

4. Bargaining power ofsuppliers. 51 1

Bargaining power ofsuppliers is considerably

low

5. Intensity of rivalryamong competitors.

1

2 5 Intensity or rivalry isextremely high

An over-all study of the 5 forces of porters model shows that the industry is fairly favorable.

The threat of new entrants is very low and the threat of substitutes barely exists. And thebargaining power of the suppliers is also very low. However, the very high bargaining power ofbuyers and the extremely high rivalry among the competitors does give an unfavorable scenariofor the industry.

By aggregating the results as well as the detailed analysis of each of porters 5 forces shows thatthe telecommunication industry is a convincingly favorable and attractive industry.


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New Entrants+ + +

Suppliers

++

Buyers

_ _

Substitutes

+ ++

Bargaining

Power of

Suppliers

Bargaining

Power of

Customers

Threat of New

Entrants

Threat of Substitute

Products

THE INDUSTRY

Rivalr amon


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PESTPolitical Factors

De-regulation of telecommunication sector has made the sector investor friendly but due to the

present instability of the political environment in the country, Pakistan is suffering a lot at theeconomic front. Former government provided great opportunities for foreign investors to bring intheir foreign direct investment (FDI), but due to the recent security issues in the country andpolitical major factors like Judicial issues, Pakistans role in war on terror, suicide attacks,energy crises, money laundering cases, food crises and bilateral issues (with India), the cellularservice sector is becoming highly unattractive for the investors both; domestic as well as foreigndirect investment. Allthese factors greatlyreducethreatof newentrantsin theindustry.

Another important issue is of the Government Activation Tax (GAT)7. As soon as a newsubscriber registers and a new SIM is registered and activated, cellular service providers mustmake a onetime GAT payment per SIM to the government. Since the commencement of cellular

services in Pakistan in 1994, the GAT was Rs. 500 per SIM activation, which was lowered to Rs.250 in 2001. However the current government of Pakistan is negotiating a change in their policy,charging a GAT of Rs. 750 per SIM activation. Each new SIM that is activated costs Rs. 150 tothe subscriber of the SIM. The cellular service providers constitute this charge in their GATpayment, which means that based on the current GAT of Rs. 250, they pay Rs 100 from theircorporate operations. If the GAT is increased to Rs. 750 per SIM activation, this would highlyaffect the profitability and cost of operations for the cellular service providers to a great extent.

This may maketheindustryattractiveasduetolow profitability, newentrants maybe

discouragedtoentertheindustry.

The current government has enhanced the GST rate on the cellular sector from 15% to 16% inthe current fiscal year. According to the projections made by the Pakistan Telecom Authority

(PTA) and current analysis, this raise in GST has and will continue to have a negative impact oncell phone usage. Again this policyofthe governmenthas providedan advantagetothesubstitutecompanies (wireless phonesand CDMA) asthisincreasein GST isan on-going

expense for mobileusersandsincetherearelowcostsofswitching tothesesubstitute

services,thisincreasesthreatofsubstitutes.

The current policy of the Government has increased the licensing cost of operation in order tostart a business within the cellular service industry to US$ 300 million, with additional renewalcosts charged every year to the cellular service providers. Thishasincreasedthecostof

operationswithin theindustry making itverycostly forthe newentrantstoenterthemarket.

Economic Factors

The global economic slump and current economic instability and recession9 in the country hasdrastically affected the state of cellular service industry in the Pakistan. High inflationary


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pressures and other unfavorable factors have resulted in low real incomes for people. This hasmade buyers more price-sensitive and willing to switch to any service that provides lower ratesand wider range of services. This is also because cost of switching for buyers is low. Thishasincreasedrivalrywithin theindustryaseachcompetitor fights forahigher marketshare,

whilethe growthin theindustrysaturates.

The total revenue of the cellular service industry is stated in terms of U.S. Dollars. Recenteconomic crisis in the country have devalued the foreign exchange rate of Pak Rupees againstU.S. Dollars over the last year. Pak Rupee depreciated from approximately Rs.60/$ to Rs. 83/$ in20098. The depreciation of Pakistani currency has reduced the total revenue of the sector in termsof the U.S Dollars and therefore, real earnings are declining. This makestheindustryunfavorable forthe newcompetitorstoenterand makeinvestmentsin theindustry.

Social Factors

Due to the price sensitive nature, customers always look out for the connection that provide thebest priced packages and focus on network coverage. And usually an attractive package by onefirm can influence the purchase of many customers because of the multiplier effect. For instance,if one package is in demand, people would start switching over to that mobile connection ingroups of families, friends and colleagues. These packages are designed in a way that users ofthe same mobile connections can stay in touch for a very low amount. So a switch to competingbrand by one consumer may actually result in a lot of people switching over to that brand. Thisincreasesthebuyer powerbyalarge margin.

Recent trends have shown that more and more people in the society are becoming concernedabout their lifestyle and how others perceive them within the society. In the upper-middle and

higher income brackets majority of the people want to be perceived as sophisticated and want touse exclusive services in order to feel as being part of the higher class and status. For suchcustomers there is more focus on high value added service and exclusive packages. Thisslightly

reducesrivalryin theindustry, making it moreattractive.

The demand for cell phones has increased in the rural areas overtime. This is due to the fact thatcell phone service is a more reliable, yet affordable means of staying in touch with familymembers, compared to landlines, which are inoperative most part of the year because of weatherproblems and other related issues. With this new trend, there is demand for cell phone services inrural areas1 which is not properly catered to.

Technological Factors

The pace of technological advancements is so high in the industry that it makes the provision of

services more and more complex. The existing companies are finding it difficult to match the

current global technological competencies as it is very costly to provide these services.

Providing its users with the latest services through their mobile connections (like GPRS, WAP


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and Edge services) and other facilities such easy load, credit sharing and convenient and faster

billing services is very important for survival. To keep pace with these new services is very

important to retain customers and target new ones as these technological services have a high

potential demand and require continuous updates. Thisagain reflectsrivalryas firmscopy

eachotherslatestinnovation,even ifitsatahighercostorloss. In other words, any update

made by any company within the industry must be immediately taken into affect by all other

companies in order to compete successfully with rivals. 3-Generation3 technologies in

communication which include WLL, WI-FI/wireless LAN, UMTS are not provided by any

telecom service providers but there is a high potential of such service requirement by the

customers. Another technology called Wi-Max4

is cheaper than 3G, but is restricted only to

internet service in cell phones.

Another technology prevalent in the western part of the world is of account recharging services2

via the internet. This is for the convenience of users who can instantly load credit in their mobile

phones by going online.


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EXTERNAL FACTOR EVALUATION MATRIX

Key Factors Weight RatingWeighted

Score

Opportunities1. Increasing number of users in rural areas1

0.15 3 0.45

2. Account recharging service via internet2

0.10 1 0.1

3. Demand for 3G services3

0.15 2 0.3

4. Wi-max for internet service40.05 2 0.1

Threats

1. Vodafone/Orange trying to enter the market5

0.15 1 0.15

2. Introduction of Mobile number portability6

0.1 3 0.3

3. Political instability (negotiations for tax rates)7

0.05 3 0.15

4. Inclement weather can be detrimental for the service0.05 2 0.1

5. Rising dollar exchange rate8 0.1 2 0.2

6. Economic recession9 0.1 2 0.2Total 1.00 2.05


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Section 2:

Company and Competitor Analysis


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COMPETITIVE PROFILE MATRIX

Critical SuccessFactors

Weights RatingWeighted

ScoreRating

WeightedScore

RatingWeighted

ScoreRating

WeightedScore

Advertising 0.1 3 0.3 4 0.4 2 0.2 3 0.3

Product quality 0.15 4 0.6 3 0.45 2 0.3 2 0.3

Distribution 0.05 3 0.15 2 0.1 2 0.1 2 0.1

PriceCompetition

0.15 2 0.3 4 0.6 4 0.6 3 0.45

Management 0.05 3 0.15 2 0.1 2 0.1 4 0.2

Financial Position 0.1 3 0.3 3 0.3 3 0.3 2 0.2

Customer Loyalty 0.05 3 0.15 2 0.1 2 0.1 2 0.1

Market Share 0.2 4 0.8 3 0.6 2 0.4 2 0.4

Customer Service 0.15 3 0.45 2 0.3 2 0.3 2 0.3

TOTAL 1.00 3.20 2.95 2.40 2.35


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Mobilink received a score of 3.10 in the Competitive Profile Matrix. Mobilink has scoredreasonably well on mostly all critical success factors. It is the market leader having the highestmarket share with a customer base of more than users.

Mobilink beats its competitors with a good difference in product quality. The product services itprovides are relatively better than what the rest provide. Mobilink provides instant connectivityand remarkable voice clarity, with some value-added services.

Mobilink, being the oldest player in the industry, has a widespread distribution network which ismore efficient compared to the rest. It has been working on its customer service and hasmanaged to gain an edge over its competitors and has also established a separate Club Indigodepartment that services premium customers who have become loyal to Mobilink.

The areas where Mobilink has taken a beating against Ufone are in financial position andadvertising. Ufone advertises extensively and more repeatedly, especially on television. Thefinancial position of Mobilink has always been strong because it generates revenues that areapproximately three-four times than what others earn, but since it has been the biggest player and

a highly leveraged company, it has been greatly hit by the recession. Also, Mobilink has not beenvery price competitive as the rest of the cellular companies who have increased their customerbases by offering cheaper packages.


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Section 3:

MICRO-ENVIRONMENTAL

ANALYSISANDINTERNAL

COMPANYRESOURCES


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Internal Resources

Core Competence

Mobilink was the first cellular service provider in Pakistan to operate on a hundred percent

digital GSM technology. Since its inception, it has maintained its position as the market leaderdue to constant technological innovation over the time. The company focuses on providing itscustomers with the latest technological developments worldwide, in the most cost-effectivemanner possible. It is very obvious that Mobilink has to bear a high cost and risk in bringingtechnology to this part of the world, because in Pakistan, demand for technologically advancedproducts is usually not very high. Regardless, Mobilink has kept up to its promise of providingits customers with more than they expect.

A recent technological advancement brought about by Mobilink in Pakistan was the introductionof Blackberry services (EDGE). Blackberry is an advanced phone with features that could not beused in Pakistan because no cellular service provider gave the option of activating those features.

Mobilink brought this phone to Pakistan and was the first one to introduce the activation of theservices the phone is meant to provide. Competition followed suit soon after. This showsMobilinks commitment towards giving its customers what they desire.


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FIRM INFRASTRUCTUREMOBILINKS WIDELY STRECHED ANDUNBEATABLE COVERAGE OF SERVICE

INDUCTION OF SIEBAL

HUMAN RESOURSE MANAGEMENTTHE MOST HIGHLY PAID PERSONNELS IN THE

COMPANY AS WELL AS HIGH RELATIVELY TO THAT OFOTHER FIRMS

HIGHLY TRAINED PERSONNELSFOCUSED TO RUN THE CLUB

INDIGO

TECHNOLOGICAL DEVELOPEMENT INDUCTION OF SIEBAL AS THESTATE OF THE ART SOFTWARESYSTEM

CO-BRANDING WITH BLACKBERRY AND PLANNINGTO BRING IN 3G AND WI-FI TECHNOLOGY. HENCE

TAPPING ON THE FIRST MOVER ADVANTAGE

PROCUREMENTSTANDARDIZED RAW MATERIAL USED IN PACKAGING OF THE SIM PACK BUT ANOTICEABLE AND RELATIVELY A BIGGER PACK IN SIZE TO THE JAZZ SIM PACK

INBOUND LOGISTICS

SIM PACKAGE 'S SUPPLYPROCESS

SIM/JACKET

PACKAGE

HAND BOOK

SEALING

OPERATIONS

CONSISTENTMANUFACTURING OFATTRACTIVE PRODUCTS

WIDE INTERNATIONALROAMING

MARITIME ROAMING

IN-FLIGHT ROAMING

OUTBOUND LOGISTICS

RAPID AND TIMELYDELIVERY OF SERVICES

STOCK WATCH

MOBILE BANKING

CORPORATE SMS

PIA RESERVATIONS

MARKETING & SALES

STRONG CORDINATIONAMONG R&D, MARKETINGAND SALES FORMANAGING CLUB INDIGO

CLUB INDIGO

PERSONALISED CARE

PRIORITY ATCALLCENTERS

SERVICES

A UNIQUE BUSINESS CLASSSERVICE

Value Chain

MOBILINK INDIGO(DIFFERENTIATION BUSINESS LEVEL STRATEGY):


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One of the features where Mobilink stands the strongest than any other cellular company in the

industry is the coverage, as an unmatchable number of areas and regions come under it. Others just

might need more time and expense to reach. Siebel has also added to the infrastructure efficiency of the

firm as it providing state of the art database service.

The sim pack of Indigo is provided with details of features in the form of booklets. Though the rawmaterial used in the manufacturing of the sim packs is overall standardized and same as that of Jazz but

it is designed in a noticeable manner and size so that it gets easy to differentiate against the packages of

both the sister division and to that of companys. A new cost cutting activity related to inbound logistics

has be that of outsourcing the manufacturing of the sim packs to local manufacturers. Previously it was

imported at high rates, but still at this time, a fine margin of cost can be cut down if the complete order

of all products i.e. sim, package, handbook and sealing, is done by a single firm. But no firm in the

country is performing the activity as a complete whole.

Business services such as airline ticket booking and stocks watch are timely provided by the company to

the customers. All these related services are designed to match the needs of the target market.

The firm highly intensifies its focus on a number of elements in the value chain for the differentiation

strategy in Indigos case, the resultant of which is the core competency of Mobilink Indigo i.e. highly

efficient and personalized business class treatment of the customers through its customer service.

Among the primary services Indigo has high priorities for its Operations and Marketing & Sales which act

as the primary drivers to attract customers. The HRM and Technology are the areas where the firm is

constantly upgrading. The management of Club Indigo is a job that demands untiring commitment and

rewards with lucrative returns to the office holders of the club. The users here are entertained with the

topnotch services at the call centers and at all other customer related services which are carved to meet

the expectations of the proposed idea of care for them.


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FIRM INFRASTRUCTUREMOBILINKS WIDELY STRECHED AND UNBEATABLE

COVERAGE OF SERVICEINDUCTION OF SIEBAL

HUMAN RESOURSE MANAGEMENTEMPHASIS ON CREATING LOW COST SERVICES

FOR A BROADER AUDIENCETRAINING OF CALL CENTER

PERSONNELS

TECHNOLOGICAL DEVELOPEMENT INDUCTION OF SIEBAL AS THE STATE OF THE ART SOFTWARE SYSTEM

PROCUREMENTREDUCING THE OVERALL COST OF THE SIM PACK BY REDUCING THE SIZE OF THE

PACKAGE

INBOUND LOGISTICS

SIM PACKAGE 'S SUPPLYPROCESS

SIM/JACKET

PACKAGE

HAND BOOK

SEALING

POINT OF SALE

FRANCHISES

GENERAL STORES

ETC.

OPERATIONS

SIEBAL INSTALLATIONRESULTING IN REDUCTION

OFOPERATION/PROCESSINGTIME AND HENCE THEMONETARY COSTS ALSO

OUTBOUND LOGISTICS

INTERRELATIONSHIPWITH SISTER UNITS

SAME CUSTOMER CAREOFFICES FOR JAZZ ANDINDIGO BOTH

SAME SUPPLIERS OF SIMPACKS

SIEBAL SYSTEM

MARKETING & SALES

HUGE SCALEADVERSTSING FEATURING

POPULAR PUBLIC FIGURES

SERVICES

MOBILINK JAZZ

(COST LEADERSHIP BUSINESS LEVEL STRATEGY):


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Primarily, Jazz has focused on its Inbound and Outbound logistics. The processes under these two

logistics in the firm are the same for both Jazz and Indigo which effectively reduce the overall cost. The

focus here is to mobilize the value chain in accordance with the cost-leadership business strategy that is

targeted towards a huge audience. The trick here is to reduce costs of the operations and to

communicate the product to prospective customers. The induction of Siebel in the firm has remarkably

reduced the cost of database management.

Similar to other firms, Jazz also is making its marketing and sales revolve around advertising using

popular figures that attract the masses.

As for the support activities, Siebel as a part of infrastructure and technological advancement again

proves more cost effective, especially for Jazz as it is focused to follow a cost-differentiation strategy.

The procurement processes are led to reduced sizes of sim packs to curtail costs.


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Strategic Cost Management

Financial Strengths


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INTERNAL FACTOR EVALUATION MATRIX

Key FactorsWeight Rating

WeightedScore

Strengths1. Good financial performance

0.1 3 0.3

2. Siebel technology centralized computer system0.1 3 0.3

3. Strong Human Resource Management0.05 4 0.2

4. A strong established brand image0.1 3 0.3

5. Club Indigo department servicing premium customers0.2 4 0.8

6. Extensive coverage nation-wide0.15 4 0.6

Weaknesses

1. High cost of distribution

0.1 2 0.2

2. Lack of strategic relationship with suppliers0.05 1 0.05

3. Unsatisfactory call centre services for prepaid users0.1 2 0.2

4. Brand name associated with being expensive0.05 3 0.15

Total 1.00 3.1


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Strengths Weaknesses

1. Good financial performance 1. High cost of distribution

2. Siebel technology centralized computersystem

2. Lack of strategic relationship withsuppliers

3. Strong Human Resource Management 3. Unsatisfactory call centre services foprepaid users

4. A strong established brand image 4. Brand name associated with beingexpensive

5. Club Indigo department servicingpremium customers

6. Extensive coverage nation-wide

Opportunities S-O Strategies W-O Strategies

. Increasing number of users in ruralareas

1. Efficient utilization of financial resourcesto cater increasing demand for 3G andWi-Max services

1. Outsource distribution services inrural areas to minimize distributioncosts

. Account recharging service via internet 2. Taking advantage of extensive coverage

nationwide and familiarity to capture ruralmarket (NIDA)

2. Introducing recharging services via

internet to reduce distribution costs

. Demand for 3G services 3. Provision of 3G services for the Indigocustomers

. Wi-max for internet service 4. Programming Siebel to introduce accountrecharging service via internet

hreats S-T Strategies W-T Strategies

. Vodafone/Orange trying to enter the

market

1. Capitalize on strong brand image to

decrease of new entrants(Vodafone/Orange/Hutch/O2)

1. Altering the perceived image of

Mobilink in the minds of thecustomers to reduce the number ofMNPs

. Introduction of Mobile numberportability

2. Using brand image to retain customers

. Political instability (negotiations for taxrates)

3. Bearing the burden of recession andincreasing tax rates by utilizing the soundfinancial performance

. Inclement weather can be detrimentalfor the service


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Space matrix

1. Market Development - to enter rural areas (check from web)2. Product development Wi max is a faster version of internet in cell phones which has become a

necessity for users over time. This service is not provided by any telecom service providers. Forbothe pre-paid and post paid

3G is another service which offers various other features, including the internet service, but is

more expensive due to the broad range of services it provides. Video conferencing, data

transfer/ data sharing. For post paid

mobilink pakistan - strategic management

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