nadir qaiser zong project
DESCRIPTION
Qaiser Abbas, Nadir Ali, Rafaqat Karamat, Shafqat Ali, Faisal Nadeem, Abdul JabbarTRANSCRIPT
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V I S I O N
“Making
communication
exciting”
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MISSION
“To be the leading mobile
operator of Pakistan by
continuously innovating and
offering exceptional quality
services to be good
corporate citizen and envoy
of friendship between china
and Pakistan core value.
Responsibility makes
perfection”
``
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Introduction
ABOUT ZONG
Zong is the first International brand of China Mobile being launched in Pakistan. The company is often cited as China Mobile (Pakistan). It is meant to empower and liberate the people of Pakistan in every nook and corner of the country. It will become a part of their hearts, their minds and bring about a change in their lives that every one desired but few thought would be possible. The core essence of ZONG is to allow people to communicate at will. Without worrying about tariffs, network coverage, capacity issues or congestion. ZONG will be supported by ground breaking communications, trend setting customer service and an unmatched product offering which will redefine rules of the game and establish ZONG as a serious contender for the number one spot. ZONG would offer its customers with entertaining & innovative value added services and will empower them by giving a wide variety of products,
services & content to choose from. We are privileged to be the pioneering country introducing this brand with others to follow. And God willing, together we will also make ZONG a success story for others to try and replicate.
ABOUT China Mobile Pakistan (CMPak)
China Mobile Pakistan (CMPak) is a 100% subsidiary of China Mobile. The pioneering overseas set up of China Mobile came through acquisition of a license from Millicom to operate a GSM network in Pakistan.
So far CMPak has invested more than US$ 700 million in the telecom sector in Pakistan and an additional US$ 800 million will be invested till the end of year 2008.
With ambitious plans to cater to the fastest growing Pakistani market and to win over the ever demanding Pakistani customer, it will be offering unprecedented coverage, voice and data services as well as a wide range of tariff options to choose from.
CMPak's edge comes from the experience and expertise of running the world's largest telecom service and the commitment they make to setting quality and customer relations standards.CMPak is geared to offer neatly packaged VAS products that will benefit the individuals, corporate as well as small businesses. Led by a team of professionals from the field of cellular
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Communication, CMPak is determined to make its mark in the Pakistani market and to change the way people communicate.
HISTORY
Recently china mobile company in Pakistan after replacing the code 0304 with 0314 now introduced its new brand in called “ZONG”. With an introductory slogan “Say everything” or “Sub Keh Do” & started its advertising campaign at popular print & electronic media outlets. Paktel started its commercial operations in Pakistan in November 1990 as the pioneer of cellular telephony with an AMPS network which was converted to TDMA (Digital) in 2003. Soon after GSM quickly gained popularity all over the world and became the technology of choice leaving AMPS/TDMA far behind. Paktel’s principal shareholder was Millicom Pakistan, which held 98.86% equity of Paktel. But however on Feb 13th 2007 Millicom announced that it had completed the sale of its 88.86 per cent shareholding in Paktel Limited to China Mobile Communications Corporation which finalized Millicom’s exit from Pakistan. Soon after, china mobile company bought all the assets of Paktel, the new management seems busy, to tie up promotional strategies, with the intention to win the telecom market slowly & silently. Well that is just a prediction I have made because in Pakistan Chinese products mostly are famous due to their cheap prices. & more the 90% population in Pakistan is price conscious due to their lower or medium income level, so lets see weather ZONG is facilitating mobile users specially youngsters by providing lowest calling, SMS, MMS as well as GPRS rates or not.
MISSION STATEMENT ANALYSIS
MISSION STATEMENT ANALYSIS
Customer No
Product and services Yes
Market No
Technology Yes
Survival, growth, profit Yes
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Self concept Yes
Public image Yes
Employees No
Psychology Yes
PRODUCTS AND SERVICES
Packages
PREPAID
ZONG 65Ladies and Gentlemen, we bring you ZONG 65, the new pre-paid package of ZONG that delivers 100% on economy and guarantees lowest call rates to any network in Pakistan 12 Aanay PackageTalk for an entire hour - any hour, for only Rs.4.99 and for the first time in Pakistan you can change the hour everyday! 50 Paisa/Call (8 Aanay)People claim of simplicity and yet give you half the truth. Only ZONG gives you the full truth at half the price. Now make calls to any other mobile network for 8 Aanay. Free PackageFor the first time in Pakistan you can make free calls for life!
ZONG Super Free NumberThat's right you can literally talk your heart out 24 hours a day everyday to that special someone - all for FREE!
Break Time OfferFor the first time in Pakistan, ZONG offers you the benefit of calling your friends and family freely during daytime.
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Aik Second PackageMake call for just 4 paisa’s per second!
Unlimited SMS PackageZONG offers unlimited message package only for 3RS per day.
Postpaid Packages
Line Rent (Rs)
100 300 600 1200 2000
On-Net Calls Airtime 0.5 0.45 0.375 0.3 0.1Off-Net Calls Airtime 0.5 0.45 0.375 0.3 0.2FNF 0.4 0.3 0.2 NA N/ASpouse Number N/A N/A N/A Free N/AFree SMS (On & Off-Net) 20 60 100 150 300SMS Rate 1 1 1 1 1GPRS 15 15 15 15 15
Free Minutes Break Up 100 300 600 1,200 6,800On-Net 60 180 360 720 6,000Off-Net-PTCL 20 60 120 240 400Off-Net-Other Mobile Operator 20 60 120 240 400Refundable Security Deposit 600 1000 1500 2500 4000
Interconnect Charges Other Mobile Operators
PTCL
Per/ min 1 0.52Per /30 Sec 0.5 0.26
Details
30 Sec billing
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Air-time rate for both On-Net & off-Net calls are same
Off-Net Calls i.e. Calls to other mobile operators & PTCL will be subjected to Interconnect charges given above
Free minutes will be calculated on per minutes basis
We will offer 5 FnF (on-net only) numbers on 100, 300 & 600 package
FnF addition charges will be Rs 15 for each addition
For FnF Addition / Modification dial 1313 from your Mobile
Spouse number will only be applicable on Rs 1200 price plan with zero charges
Spouse number can be added / changed once in a month
Free minutes calculation for Rs 1200 price plan will be exclusive of Spouse number as the charging on Spouse number will be zero
Free Minutes on 1200 package are exclusive of Spouse number
Spouse number can be added by calling our help line or visit our Customer services centre
Rs 2000 LR package will have 6800 free minutes in total, 6000 minutes will be On-Net with a daily cap of 200 Minutes (Fair usage policy)
The first 200 minutes of the day will be charged at Rs 0 after which charging will be done at On-Net Airtime rates i.e. 0.1 per 30 sec
Mobile Number Portability – MNP
Mobile Number Portability (MNP) enables customers to retain their mobile telephone numbers (including the three digit prefix) when changing from one mobile operator to another mobile operator.
Benefits
You will be able to take advantage of ZONG’s attractive tariffs and service offerings without even changing your mobile number.
You will save the inconvenience of informing all your contacts as is faced in the changing your number.
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You will experience cost saving by avoiding stationary cost (letterheads and business cards) printing since your number will remain the same.
Customer service centers
“The beacon of ZONG’s impression and torch bearers of a new era in customer interaction, taking customer service into a portal of customer excitement. These are the doors to ZONG’s first and foremost realization of its promise to excite customers with a new trend in service. Setting the tone and ambiance which is second only to your home, these are ZONG’s arms across the country to welcome everyone to experience the comfort when a true promise is fulfilled.”
Zone Address
KARACHI 1. S.A 16, 17 & 18, Plot # FL 17, Block 5, KDA Scheme 5, Clifton Karachi2. Gulshan-e-Iqbal Opposite Batul Mukaram Masjid Karachi
LAHORE Big City, Shop No G 59 & 60. 3-E-2, Liberty Roundabout. Main Boulevard. Gulberg III
ISLAMABAD 68-E Jinnah Avenue, Blue Area IslamabadRAWALPINDI Plot # 7, 8 ,9 Bank Road RawalpindiFAISALABAD Lucky Plaza, 213 Main Susan Road. FaisalabadMULTAN Multan Arcade Main Katchery Road MultanQUETTA Fayyaz Lab, Jinnah Road- QuettaPESHAWAR Burjaman Centre, University Road, PeshawarHYDERABAD Shop # 5, Ali heights, Auto Bhan Road, near CitiBank, HyderabadJHELUM Old Al-Bilal Hotel, Cantt chowk ,GT Road, JhelumSAHIWAL 511/BVII, Jail Road, Civil Lines. SahiwalDG KHAN Azmat Road DG KhanGUJRAT Euro Heights GT Road GujratGUJRANWALA Near Traffic Police Office, GT Road, GujranwalaSIALKOT Shop No. 17, Aziz Shaheed Rd. SialkotABBOTABAD Abbotabad Business Complex, Supply Bazar, Manshera Road- AbbotabadMARDAN Zong Plaza, Mall Road, Mardan CanttSARGODHA Parhar Plaza, Railway Road SargodhaBAHAWALPUR Baghdad UL Jadeed Road DIG Chowk Near Al Haq House Bahawalpur
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RAWALPINDI - SATELLITE TOWN
Plot # B130, B block- Satellite town- Rawalpindi
SUKKUR Shop # 421-422.C Minara Road Sukkur
Careers
ZONG is committed on attracting and retaining the best human resource from all over Pakistan. Its also provides a working environment which satisfies the professional and personal needs of its employees.
ZONG Mobile Internet
GPRS CoverageFastest growing coverage in Pakistan.
ZONG Unlimited@ Rs. 400+Tax/month
ZONG Free @ Rs. 10+Tax/M MMSThe epoch of multimedia content is upon us and the last thing we’d want is to stick to the age old conventional messaging techniques.
ZONG Mobile Internet Hourly PackageAnother spectacular service from ZONG that will keep you entertained 24/7. After rocking the market with our services and all the amazing call rates, we are back with an outstanding feature for all packages; ZONG hourly based Internet package.
ZONG Internet USB Card
The ZONG Internet USB Card is a device (with a SIM inside it) which can be inserted in your laptop/desktop PC (in the USB Slot) to provide you with access to the internet. It works on the
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EDGE/GPRS network and gives you wireless Internet connectivity, anytime anywhere!
ZONG Mobile
Zong has come up with another interestingPromotion…. you get a phone, almost free but With a year’s payment in advance. This is equivalent to the US model where customers have to sign a contract to get a discounted phone. In Zong’s case they just get the money in advance (great for them) and hope that users will stay with Them after 12 months.
External Assessment:
PEST Analysis of Pakistan in Telecom Industry
In order to survive and remain profitable in today’s competitive marketplace, Zong need to be
able to react and adapt to changes in the external environment and ideally be proactive in
impacting these forces. External environment factors can be classified into five general
categories: competitive, social/cultural, legal, economic, political, and technological.
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Political Factors
Political Instability:
Pakistan is facing political instability causing danger for the telecom industry. But the
political factor does not effect on Zong so high because Zong related from china and
relationship of china and Pakistan is very strong.
Deregulation:
The telecom sector of Pakistan has successfully liberalized in an efficient, transparent
and fastest deregulation of telecom in the region. The Government of Pakistan gave the
status of Industry to Pakistan Telecommunication Sector.
Changes in Tax Laws:
Tax rates have been increased day by day government tax rate of call is 15% and recently government increased it by 6 % more.
Economic Factors:
Gross Domestic Product:
Telecom sector of Pakistan has a share of almost 2 percent in National GDP.
Average Revenue per User (ARPU):
The average revenue per user is falling. It does not affect value able on Zong. Because Zong started in same condition.
Decline in Money Value:
The decline in Rupee value against the US Dollar, the decrease in the interconnect charges and lower priced tariffs have resulted in an overall decrease of ARPU in US Dollar terms.
Outflow of Capital:The ongoing economic turmoil along with the worsening of security conditions in Pakistan has caused an increased outflow of capital from the country.
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Technological Factors:
Technological Development:
Companies are investing in their infrastructure to not only expand but also to upgrade
their existing structure. As the competition is strong Zong is focusing on its value added
services
Technological Advancement:
Currently all companies are providing Multi-media Messaging Services (MMS), General
Packet Radio Service (GPRS), Virtual Private Network (VPN), Pocket Stocks, Conference
Calling, Wallpapers Animated pictures Polyphonic ring tones (WAP), and Voice Mail at
low price.
Technological Trends:The well-recognized technology trends that are influencing the evolution of the network indicate that:
o The cost of a call is becoming even more insensitive to the distance;o The modularity of the network is increasing;o The networking is shifting from circuit-switched to packet-routing;o The voice communication is now independent of the network;o The geographic boundaries are irrelevant for emerging technology;o The intelligence and function are moving away from the central office.
In these conditions competition is very strong among competitors. Zong is improving itself in technology.
Five Forces Porter Model
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Five forces looks at five key areas namely threat of new entry, power of buyers, power of suppliers, threat of substitutes, and competitive rivalry.
Threat of New Entry
• As government of Pakistan is showing liberalism in case of telecommunication sector and opened its policies to award new licensees to new mobile service providers so threat of new entry is high.
• As set-up cost is in billions of dollars so in this case threat of new entry is low, but there are companies who are working to achieve licenses and approaching PTA to know terms and conditions for this.
• As for this business companies need a well established distributions and franchises network so threat of new entrant is high in this case.
Bargaining Power of Buyers
• Power of buyer is high in telecommunication sector. There are six market players and players are offering different packages at different prices and a situation of price war is running. Buyers have a power to buy any package which is suited to them.
• Cost of switching from one company package to other company package is low. Hence, power of buyers is high.
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Bargaining Power of Suppliers
• The power of suppliers is low in case of telecommunication sector.
• But the fact is that numbers of suppliers are few in the market but they are competing in the market to make agreements with mobile service providers.
Threat of Substitute Products
• Government also gave so many land lines and wireless local loop licenses to different companies like PTCL wireless local loop, GO CDMA, WORLD CALL etc. these services in future will be like mobile phone services like they are planning to offer services a lot but currently they are offering SMS and CLI services to their customers.
Rivalry among Competing Firms in Industry
• Currently there are six market players but in future they will be eight and nine or even more.
• Thuraya satellite service is offering subscribers freedom of mobility and uninterrupted service. Thuraya's satellite technology supplements of existing mobile service providers, overcoming the challenges of large geographical areas and insurmountable terrain.
Competitive Analysis
Major competitors of ZONG include
Mobilink Ufone
Telenor
Warid
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Mobilink GSM
Pakistan Mobile Communications Ltd (PMCL)
Type Private Limited Company
Genre Subsidiary
Founded 1994
Founder Motorola USA
HeadquartersIslamabad, Pakistan42 Kulsum Plaza, Blue Area
Area served5000 cities, towns, and villages across Pakistan
Key people Zouhair A Khaliq, President and CEO
Industry Telecommunication
Productspostpaid Indigo , prepaid JAZZ, Mobilink PCO
Owner Naguib Sawiris
Parent Orascom Telecom Egypt
Slogan Reshaping lives
Website www.mobilinkgsm.com
Pakistan Mobile Communications Limited, better known as Mobilink GSM, is a telecommunication service provider in Pakistan. According to PTA statistics, Mobilink has 30.88 million customers by January 2008. Mobilink's Head office is located in Kulsum Plaza, Blue
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Area, and Islamabad.
Mobilink started operations in 1994 as the first GSM cellular Mobile service in Pakistan by MOTOROLA Inc, later it was sold to Orascom, an Egypt-based multi-national company. Mobilink's corporate postpaid package is sold under the brand name "Indigo" and prepaid by the name of "Jazz".
Mobilink is the largest cellular service provider in Pakistan
Pakistan Telecommunication Mobile Ltd. (PTML),Ufone
Type Private
Genre Subsidiary
Founded January 29, 2001
FounderPakistan Telecommunication Company Ltd
HeadquartersIslamabad, Pakistan13-B, F-7 Markaz
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Area served2336 cities of Pakistan, GT Road, Super Highway & Motorway
Key people Abdul Aziz, CEO
Industry Telecommunication
Products Pre Pay, Post Pay
Revenue▼ Rs.5.1 billion PKR (first quarter 2006-07).
Parent PTCL Pakistan
Slogan It’s all about U! (Tum He Tou Ho)
Website www.ufone.com
Ufone GSM is a Pakistani GSM cellular service provider. It is one of six GSM Mobile companies in Pakistan and is a subsidiary of Pakistan Telecommunication Company.
The company commenced its operations under the brand name of Ufone from Islamabad on January 29 2001. Ufone expanded its coverage and has added new cities and highways to its coverage network. After the privatization of PTCL, Ufone is now owned by Etisalat.
During the year, as a consequence of PTCL’s privatization, 26% of its shares were acquired by Emirates Telecommunication Corporation (Etisalat). Being part of PTCL, the management of Ufone has also been handed over to Etisalat. During the year July 2005 to June 2006, Ufone continued on the path to success. The Company further expanded its coverage and has added new cities and highways. Ufone has network coverage in more than 750 cities, towns and across all major highways of the country.
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Warid Telecom
Type Private
Founded 2004
Headquarters301-Dhabi Tower, Hamdan Street, Post Box 44222, Abu Dhabi, United Arab Emirates
Key people
Sheikh Nahayan Mabarak Al Nahayan, ChairmanMr. Bashir A. Tahir, CEO Abu Dhabi Group & Warid International
Industry Telecommunication
Products Telephony
Slogan We Care
Website
www.waridtel.com (Pakistan) www.waridtel.com.bd (Bangladesh)
Warid Telecom International is an Abu Dhabi based mobile telecommunication firm providing telephony services in Bangladesh, Pakistan and Uganda.
Warid is expected to launch in Congo soon.
In December 2005, Warid Telecom International LLC obtained a 15 year GSM license to operate as the sixth mobile phone
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operator in Bangladesh for 50 million US dollars.
Warid Bangladesh launched their operations on the 10th of May, 2007 and uses the code 16 proceeded by the code number of Bangladesh +880. Warid Bangladesh has acquired a million subscribers within 70 days of launch.
The company started rolling out network from mid-2006. In less than a year, amidst much speculation, Warid Bangladesh launched their commercial operation with 26 districts – the largest ever launch in terms of network coverage and BTS Stations. Unlike its operations in other countries Warid Bangladesh uses the slogan be heard instead of we care.
Currently Warid Bangladesh provides both post-paid and pre-paid connection plans. The post-paid plan is branded and marketed across the country under the name Zahi Post-paid, which means leader or royalty. The pre-paid segment is branded and marketed and ZEM PREPAID According to Pakistan Telecommunication Authority, currently Warid Telecom has more than 10 millions subscribers in Pakistan and is ranked as the fourth largest operator in Pakistan. Warid Pakistan claims it has the largest "post-paid" subscriber base in Pakistan.
Telenor
Type Public
Founded 1855
Headquarters Fornebu, Norway
Key peopleCEO: Jon Fredrik Baksaas, Chairman: Thorleif Enger
Industry Telecommunication
ProductsTelephony and broadband
Revenue ▲ 91.1 billion NOK
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(2006)
Operating income
▲ 18.3 billion NOK (2006)
Net income▲ 15.9 billion NOK (2006)
Employees 31,750
Slogan Here to help
Website www.telenor.com
Telenor (OSE: TEL, NASDAQ: TELN) is the incumbent telecommunications company in Norway, with headquarters located at Fornebu, close to Oslo. Today, Telenor is mostly an international wireless carrier with operations in Scandinavia, Eastern Europe and Asia. In addition, it has extensive broadband and TV distribution operations in four Nordic Countries.
At year-end 2005, Telenor held controlling interests in mobile operations in Norway, Denmark, Sweden, Ukraine, Hungary, Montenegro, Thailand, Malaysia, Bangladesh and Pakistan. In October 2006, Telenor entered into an agreement with Vodafone Group for the acquisition of subsidiary Vodafone Sweden for a consideration of NOK 8,170 million, including assumption of debt.
Telenor Pakistan is a wholly owned subsidiary that started operations on the 15th of March 2005 and holds one of six mobile licenses in Pakistan. Its also the fastest growing cellular network of Pakistan. Currently Telenor holds the second largest GSM and the largest GPRS and EDGE coverage in Pakistan. It has also achieved the second largest retailer network in Pakistan within the 2 years of its operations and it has started operations in Azad Kashmir and the Northern Areas of Pakistan. Telenor has reached its breakeven in the first quarter of 2007 and beat largest mobile operator Mobilink in sales. Telenor proactively participated in earthquake disaster relief, and is carrying out a campaign for the welfare of flood victims in Balochistan. Current CEO of Telenor Pakistan is Tore Johnsen.
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Cellular Service Providers of Pakistan
Cellular Service Provider Market ShareMobilink 31.6%Ufone 21.5%Telenor 21.6%Warid 18.8%Zong 6.1%
Source: (Pakistan Telecom Authority,2008)
Opportunities of Zong
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Expand Globally ZONG can expand the globally and can develop it strategy in other countries. Publicity and Marketing With the right marketing strategy they can acquire much more.Acquire / mergerAs warid is going in loss and in the condition of liquidation its big opportunity for Zong to acquire warid telecom.
New product development:Zong can introduce new products such as dish TV.Opportunity in northern areasZong can have a clear edge over the competition in the Northern Areas especially, as China Mobile has huge experience of network operation in similar high mountainous areas in China itself.
Pak China BorderZong can cover the border of China, with the Karakoram highway (old Silk Route) and can play a vital role in freight transportation.
Threats of Zong
Old stable companiesMobilink and Ufone are well-establish as compare to Zong in Pakistan.
Better Packages by Other CellularCompanies like Telenor offer better packages for corporate customers. Telenor Postpaid connection “Persona” is a good example of it.Wireless local loop (WLL) service providers are also targeting areas which are less developed
Price WarsCurrent price war among cellular service providers may reach at a position where only brand names survive.
Government InterferenceGovernment Interference will always be treated as a threat in terms of taxes
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Internal Assessment:
Management
Through its published manual on the code of business conduct at Zong. The company addresses individual responsibility. Its value of integrity, respect, imagination and passion and its commitment to serving its customer, it has several sections an ethics and how Zong encourages employees to respect explicit ethics violations or questionable ethics conduct and give guidance on how to handle such situations. This manual also guides management on how to handles issues of discrimination, harassment, ethics violations reports.
Management Line Of Zong
MANAGEMENT LINE OF ZONG
Management line Name Location From
CEO Qin Lee Islambad China
CTO Xu Haiyong Islambad China
CFO Xin Jee Islambad China
COO Zafar Usmani Islambad Pakistan
CHRO Wai Giang Fu Islambad China
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Direct Rollout Khurram Alive Islambad Pakistan
Director Operations Syrus Sikander Islambad Pakistan
Director Finances Amir Mahmood Islambad Pakistan
Director PMO Liu Lidong Islambad China
Director sales Mannan Shabbir Islambad Pakistan
Director NPS Mohammed Bilal Islambad Pakistan
Line Manager And Heads
LINE MANAGER AND HEADS
Category Levels Management
Officers 1A+1B+1C Line managers+ Regional Head
Officers 2A+2B+2C Line managers+ Regional Head
Executives 3A+3B+3C Line managers+ Regional Head
Managers 4A+4B+4C Line managers+ Regional Head+SMT
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Directors 5A+5B+5C SMT
Chief 6A+6B+6C SMT+CEO
Marketing Department
Marketing is particularly important today in telecommunication industry, especially as consumers are becoming more sensitive to price. Customers are bombarded daily with endless solicitations and Zong and its competitors are doing what can to diversify their services and their names being remembered as the one customers turn to when they want to sign up for services or switch to different provider many customers are finding out that Zong bundled services are often better across the board than its competitors promotional services, which sometimes last for only one on the services. Marketing department select the packages for customers Zong packages are more attractive for the customers as compare to the competitors
Finance Department Zong has strong financial position since its inception. China mobile acquires Paktel in $27.5 billion and it has been invested $1500 million in Pakistan for Zong and want to invest more. Zong has been collected $ 36,575,000 in 2008. The improvement in net earnings resulting from strong internal sales growth from both postpaid prepaid segments.
Value Chain
Zong purchases equipment from four companies ZTE, Ericson, Alcetle, and Hawaii. These are the venders and operator of Zong. Zong distributors are franchises, customer care service centers and different outlets. Zong has 22 CCSC and 100000 different outlets in Pakistan.
Research And Development Department (R&D)
R&D of ZONG is working hard. Its select the site where it is feasible and check the access, now ZONG is covering all over the Pakistan rapidly
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Human Resources Department
The fundamental objective of human resource function is to ensure that every aspect for the organization, employment motivation and management of people is integrated with the strategic objective of business and contribute to the successful achievement of those objectives. Zong has two major sources of people inside sources and outside sources
Inside Sources
The manager of department having vacancy in mind speaks with personal manager and together they give consideration to specific job.
Out Sources And Recruitment Method
In Zong management continuously hire fresh blood from the market through the following sources.
Employee Referral Business Colleges Advertising Online Application Bank/Unsolicited application
Strength of Zong
Zong strength lies in the establishment of a strong, fundamental and coherent long-term business plan, designed to sustain economic challenges in the country. Investment:
It has invested heavily in infrastructure, technology, human resources and customer services which have given impetus for a broad-based future planning strategy. It further is investing US $ 800 million in Pakistan to develop its infrastructure. Therefore it has the competitive advantage of making huge investments in Pakistan which no-one else had made before regarding telecom.
Network portability
Over 500,000 people have been switched to Zong from other networks THE UNIVERSITY OF LAHORE
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Zong mobile
Zong has come up with another interesting promotion…. you get a phone, almost free but with a year’s payment in advance.
Resources, Assets and People
Being a multinational company Zong has huge resources in terms of capital. It has billions of capital to invest in various projects. Its offices are luxuriously equipped with every facility.
Zong while choosing people for jobs follow the strategy of “choosing the best among all” therefore majority of its staff people are highly qualified from renowned universities of Pakistan. A certain percent is foreign qualified as well
So far CMPak has invested more than US$ 700 million in the telecom sector in Pakistan and an additional US$ 800 million will be invested till the end of year 2008.
Location and Geographical Coverage
Zong is also covering the all cities of Pakistan and in 2008 Zong completed its record sites 1000 in Pakistan its great achievement.
Now Zong is covering the northern areas of Pakistan rapidly.
Government Dealings Pays a huge amount in taxes to the government of Pakistan. So it’s a big source of
revenue to the government as well. It conducts its business by abiding by the rules and regulations setup by the
government and cooperates with the government in every aspect.
Weaknesses of Zong
Coverage
Zong is establishing but it is new in market therefore it coverage is weak in rural areas of
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Pakistan.Bad imageBad image of associate with Paktel. And still now having old staff of Paktel.Bad MISZong does not have the proper lists of its customers. It has the list but this list is not authentic which is increasing the unauthorized use of its sim specially pre pay. Zong have to take serious steps to properly list its customers to ensure that there is no misuse.
A Comprehensive Strategy-Formulation FrameworkImportant strategy-formulation techniques can be integrated into a three-stage decision-making framework, as shown below. The tools presented in this framework are applicable to all sizes and types of organizations and can help strategists identify, evaluate, and select strategies.
Stage-1 (Formulation Framework)
1. External factor evaluation2. Competitive matrix profile3. Internal factor evaluation
Stage-2 (Matching Stage)
1. TWOS Matrix (Threats-Opportunities-Weaknesses-Strengths)2. SPACE Matrix (Strategic Position and Action Evaluation)3. BCG Matrix (Boston Consulting Group)4. IE Matrix (Internal and external)5. GS Matrix (Grand Strategy)
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1. QSPM (Quantitative Strategic Planning Matrix)
Stage-1 (Formulation Framework)
Industry Analysis: The External Factor Evaluation (EFE) Matrix
An External Factor Evaluation (EFE) Matrix allows strategists to summarize and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information. The EFE matrix consists of five steps process.Five-Step process:
• List key external factors (10-20)
Opportunities & threats. You have to prepare a list of all external factors which will affect the EFE matrix. These factors should be two points to be kept in mind these are opportunities and threats
• Assign weight to each (0 to 1.0)
Sum of all weights = 1.0Now you have to arrange them according to their weight age that which factor is most important. It should be weight age in % ages. The sum of the total of all the factors should always be one.
• Assign 1-4 rating to each factor
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Firm’s current strategies response to the factor: how well firms response to these factors.
• Multiply each factor’s weight by its rating
Produces a weighted scoreHow the firm will respond to these factors external factors. Such criteria are known as rating.
• Sum the weighted scores for each
Determines the total weighted score for the organization.Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5
EXTERNAL FACTOR EVALUATION (EFE) MATRIX
EXTERNAL FACTOR EVALUATION (EFE) MATRIX
Key External Factors Weight Rating Weighted Score
Opportunities
1 Globalization 0.10 3 0.30
2 Marketing 0.15 4 0.60
3 Acquisition 0.08 2 0.16
4 New Product Development 0.07 3 0.21
5 Northern Areas 0.10 3 0.30
6 Pak China Borders 0.13 3 0.39
Threats
1 Old Stable Companies 0.12 4 0.48
2 Attractive Packages By 0.10 3 0.30
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Others
3 Price War 0.06 3 0.18
4 Government Interference 0.09 3 0.27
TOTAL 1.00 3.19
Total weighted score for the ZONG external factor is 3.19 which is above average
The Competitive Profile Matrix (CPM)
The Competitive Profile Matrix (CPM) identifies a firm's major competitors and their particular strengths and weaknesses in relation to a sample firm's strategic position.The weights and total weighted scores in both a CPM and EFE have the same meaning. However, the factors in a CPM include both internal and external issues; therefore, the ratings refer to strengths and weaknesses, where 4 5 major strength, 3 5 minor strength, 2 5 minor weakness, and 1 5 major weakness.There are some important differences between the EFE and CPM. First of all, the critical success factors in a CPM are broader; they do not include specific or factual data and even may focus on internal issues. The critical success factors in a CPM also are not grouped into opportunities and threats as they are in an EFE.In a CPM the ratings and total weighted scores for rival firms can be compared to the sample firm. This comparative analysis provides important internal strategic information. Zong’s Competitive Profile Matrix is provided in Table. In this matrix market share, growth rate and financial strength are the most important critical success factors, as indicated by a weight of 0.60. in market share Mobilink is leading but in the growth factor zong is leading with the weighted point of 0.40
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Competitive Profile Matrix (CPM)
Competitive Profile Matrix (CPM)
Critical Success Factors (CSF)
Weight Rating Weighted Score
Rating Weighted Score
Rating Weighted Score
Rating Weighted Score
Market Share 0.15 4 0.60 3 0.45 1 0.15 3 0.45
Growth Rate 0.10 1 0.10 3 0.30 4 0.40 3 0.30
Financial Strength 0.08 3 0.24 3 0.24 4 0.32 3 0.24
Management 0.12 4 0.48 3 0.36 3 0.36 3 0.36
Coverage 0.10 4 0.40 3 0.30 2 0.20 2 0.20
CCS 0.13 4 0.52 3 0.39 3 0.39 2 0.26
Advertising 0.06 2 0.12 3 0.18 3 0.18 4 0.24
Brand Name 0.10 4 0.40 2 0.20 3 0.30 3 0.30
Packages 0.09 2 0.18 3 0.27 3 0.27 4 0.36
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Price Competitiveness
0.07 2 0.14 3 0.21 3 0.21 3 0.21
TOTAL 1.00 3.18 2.90 2.78 2.92
The ratings values are as follows: 1 = major weakness, 2 = minor weakness, 3 = minor strength, 4 =major strength.
As indicated by the total weighted score of 2.78, Zong is weakest. because it is at its initial position as compare to competitors. With the point of 3.18 Mobilink is leading. Only eight critical success factors are included for simplicity; this is too few in actuality.
The Internal Factor Evaluation (IFE) Matrix
A summary step in conducting an internal strategic-management audit is to construct an Internal Factor Evaluation (IFE) Matrix. This strategy-formulation tool summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among those areas. Intuitive judgments are required in developing an IFE Matrix, so the appearance of a scientific approach should not be interpreted to mean this is an all powerful technique. A thorough understanding of the factors included is more important than the actual numbers. Similar to the EFE Matrix and Competitive Profile Matrix, an IFE Matrix can be developed in five steps:
List key internal factors (10-20)
o Strengths & weaknesses Assign weight to each (0 to 1.0)
o Sum of all weights = 1.0 Assign 1-4 rating to each factor
o Firm’s current strategies response to the factor Multiply each factor’s weight by its rating
o Produces a weighted score Sum the weighted scores for each
o Determines the total weighted score for the organization
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Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5
INTERNAL FACTOR EVALUATION (IFE) MATRIX
INTERNAL FACTOR EVALUATION (IFE) MATRIX
Key Internal Factors Weight Rating Weighted Score
Strengths
1 Investment 0.09 4 0.36
2 High Growth Rate 0.11 4 0.44
3 Advertising 0.12 3 0.36
4 Net Work Portability 0.12 3 0.36
5 Zong Mobile 0.07 3 0.21
6 Resources Assets And People
0.08 3 0.24
7 Location And Geographical Coverage
0.10 3 0.30
8 Government Dealing 0.09 3 0.27
Weaknesses
1 Bad Image Of Paktel 0.06 2 0.12
2 Coverage 0.07 1 0.07
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3 Low Market Share 0.05 2 0.10
4 Weak MIS 0.04 2 0.08
TOTAL 1.00 2.91
Total weighted score for the Zong’s internal factors is 2.91 which is above average
Stage-2 (Matching Stage)
Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix
The Threats-Opportunities-Weaknesses-Strengths (TOWS) is also named as SWOT analysis. A TWOS Analysis is a strategic planning tool used to evaluate the Threats, Opportunities and Strengths, Weaknesses, involved in a project or in a business venture or in any other situation requiring a decision. This is an important tool in order to formulate strategy. This Matrix is an important matching tool that helps managers develops four types of strategies: SO Strategies (strength opportunities), WO Strategies (weakness- opportunities), ST Strategies (strength-threats), and WT Strategies (weakness-threats).The most difficult part of TOWS matrix is to match internal and external factor. Once the objective has been identified, TOWS are discovered and listed. TOWS are defined precisely as follows:Strengths are attributes of the organization that are helpful to the achievement of the objective.Weaknesses are attributes of the organization that are harmful to the achievement of the objective.Opportunities are external conditions that are helpful to the achievement of the objective.Threats are external conditions that are harmful to the achievement of the objective.
Steps for developing strategies:
There are eight steps involved in constructing a TOWS Matrix:1. Rank external opportunities2. Rank external threats3. Rank internal strength4. Rank internal weaknesses.5. Match internal strengths with external opportunities and mention the result in the SO Strategies cell.
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6. Match internal weaknesses with external opportunities and mention the result in the WO Strategies cell..7. Match internal strengths with external threats and mention the result in the ST Strategies cell.8. Match internal weaknesses with external threats and mention the result in the WT strategies cell.
TOWS MATRIX OF ZONG
Strengths–S
S1. CapitalS2. Network PortabilityS3. ResourcesS4. LocationS5. Government DealingsS6. High Growth RateS7. Advertising
Weaknesses – W
W1. CoverageW2. Bad Image Of PaktelW3. Low Market ShareW4. Weak MISW5. Old Staff
Opportunities – O
O1. GlobalizationO2. Marketing O3. Acquiring O4. Covering Pak China BorderO5. Covering Northern AreasO6. New ProductO7. Penetration
SO-Strategies
S1,O1 Expand S3,O7 Penetration S1,O3 Acquisition
WO-Strategies
W3,O3 Acquisition
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Threats – T
T1. Old Stable CompaniesT2. Attractive Packages By CompetitorsT3. Price WarT4. Government Interference
ST-Strategies
S1,T3 Cost Leadership
S3,T2 Penetration
WT-Strategies
W3,T2 Downsizing
STRATEGIES FROM TOWS MATRIX
SO-Strategies
Matching the strength 1 and opportunity 4 Zong can expand their business.
From S1 and O7 they can use the strategy of penetration.
From S1 and O3 they can use the strategy of acquisition.
ST-Strategies
Matching the strength 1 and threat3 Zong can use the strategy of cost leadership.
Matching the strength 3 and threat 2 Zong can use the strategy of penetration.
WO-Strategies
Matching the weakness 3 and opportunity 3 Zong can use the strategy of acquisition.
WT-Strategies
Matching the weakness 3 and threat 2 Zong can use the strategy of downsizing.
The Strategic Position and Action Evaluation (SPACE) Matrix
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The Strategic Position and Action Evaluation (SPACE) Matrix is another important Stage 2 matching tool of formulation framework. It explains that what is our strategic position and what possible action can be taken. It is not closed matrix. It is prepared on graph. It is closed matrix. This follow counter clock wise direction. It contains four-quadrant named aggressive, conservative, defensive, or competitive strategies. The axes of the SPACE Matrix represent two internal dimensions financial strength [FS] and competitive advantage [CA]) and two external dimensions (environmental stability [ES] and industry strength [IS]).These four factors are the most important determinants of an organization's overall strategic position.
A SPACE Matrix for a Zong
Financial Strength (FS) RAITNGS
1. Revenues 5.0
2. Return on investment 4.03. Working capital 5.0
14
Competitive Advantage (CA)
1. Resources Assets -2.02. High growth rate -1.03. Advertising -2.04. Competition capacity utilization -3.0
-8.0
Environmental stability (ES)
1. Technological changes -3.02. Rate of inflation -4.03. Demand variability -2.04. Barriers to entry into market -1.0
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-10
Industry Strength (IS)
1. Deregulation increase completion in telecom industry 3.02. Financial stability 5.03. Resources utilization 4.04. Profit potential 4.0
16
Conclusion
FS average is 14/3 = 4.67 CA average is -8/4 = -2.0 ES average is -10/4 = -2.5IS average is 16/4 = 4.0
Directional Vector Coordinates: x-axis: 4.67+ (-2.5) = 2.17Directional Vector Coordinates: y-axis: 4.0+ (-2) = 2
The Zong should peruse Aggressive strategies
SPACE MATRIX FOR ZONG
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BCG GROWTH-SHARE MATRIX
Companies that are large enough to be organized into strategic business units face the challenge of allocating resources among those units. In the early 1970's the Boston Consulting Group developed a model for managing a portfolio of different business units. The BCG growth-share matrix displays the various business units on a graph of the market growth rate vs. market share relative to competitors.
BCG Growth-Share Matrix
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AggressiveConservative
Defensive Competitive
(2, 2.17)
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On the vertical axis, market growth rate provides a measure of market attractiveness. On the horizontal axis, relative market share serves as a measure of company strength in the market.
The growth-share matrix defines four types of SBUs:
CASH COW - (LOW GROWTH, HIGH MARKET SHARE)
A business unit that has a large market shares in a mature, slow growing industry. Cash cowsRequire little investment and generate cash that can be used to invest in other business units.
STAR - (HIGH GROWTH, HIGH MARKET SHARE)
A business unit that has a large market shares in a fast growing industry. Stars may generateCash, but because the market is growing rapidly they require investment to maintain their lead. If successful, a star will become a cash cow when its industry matures.
QUESTION MARK - (HIGH GROWTH, LOW MARKET SHARE)
A business unit that has a small market shares in a high growth market. These business unitsRequire resources to grow market share, but whether they will succeed and become stars is unknown.
DOG - (LOW GROWTH, LOW MARKET SHARE)
A business unit that has a small market shares in a mature industry. A dog may not requireSubstantial cash, but it ties up capital that could better be deployed elsewhere. Unless a dog has some other strategic purpose, it should be liquidated if there is little prospect for it to gain market share.
Zong SBU
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Post paid Prepaid Zong mobile Zong USB
Zong postpaid has low market share of 0.25% and high growth rate of16% so in BCG matrix it lies in 1ST quadrant of question marks.
Zong prepaid has high market share of 0.7% and high growth rate of15% so in BCG matrix it lies in 4TH quadrant of stars.
Zong mobile has low market share of 0.4% and high growth rate of11% so in BCG matrix it lies in 1ST quadrant of question marks.
Zong USB has low market share of 0.25% and no growth rate. So in BCG matrix it lies in 2ND
quadrant of dog.
Zong MobileStrategic Business Unit Of ZONG Telecom
Zong has come up with another interesting promotion …. You get a phone, almost free but with a year’s payment in advance. This is equivalent to the US model where customers have to sign a
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contract to get a discounted phone. In Zong case they just get the money in advance (great for them) and hope that users will stay with them after 12 months.
Strengths of ZONG mobile
Zong is the first company who introduced mobile With the brand name of ZONG. Zong is benchmark leader in this SBU.
It is available at very cheap price. Anyone can get it paying Rs 1900 with Rs 1900 balance.
Large number of people appreciates and gets the mobile immediately.
Weakness
Mobile is totally made by china and people’s perception about china mobile is not good. So its resale value is low.
Zong mobile is only made for zong network. Other networks cannot operate in this mobile.
Zong is depending on ZTE.(Zheng Telecommunication Electronics) ZTE is the vender of zong. Zong purchase mobile from ZTE.
Internal Factor Evaluation
Internal Factor Evaluation Of Zong Mobile
Strengths Weights Rates Score
Benchmark Leader 0.26 4 1.04 THE UNIVERSITY OF LAHORE
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Cheep Rates 0.35 4 1.4
People's Appreciation 0.09 3 0.27
Weakness
Resale Value 0.18 2 0.36
Restriction Of Other Networks 0.05 2 0.1
Dependent On ZTE 0.07 1 0.07
Total 1 3.24
Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5Total weighted score for the Zong mobile is 3.24 which is above average in its overall internal strength.Total weighted score by Zong in internal factor evaluation is 3.24 which is above average.
Threats of ZONG mobile
Other competitors can introduce like this mobile in market. It is very simple mobile which has no extra features but the other companies have
stylish and attracting mobiles in market.
Opportunities for ZONG mobile
It can improve its features like other cell companies. And can attract the people. Zong can manufacture the mobile its own. Because it depends on others
External Factor Evaluation Of Zong Mobile
External Factor Evaluation Of Zong Mobile
Opportunity Weights Rates Score
Improving Features 0.35 2 0.7 THE UNIVERSITY OF LAHORE
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Manufacture Mobile 0.15 1 0.15
Threats
Threats Of Competitors 0.35 2 0.7
Threats Of Cell Companies 0.15 1 0.15
Total 1 1.7
Total weighted score by Zong in external factor evaluation is 1.7 which is below average.
The Internal-External (IE) Matrix
This is also an important matrix of matching stage of strategy formulation. This matrix already explains earlier. It relate to internal (IFE) and external factor evaluation (EFE). The findings form internal and external position and weighted score plot on it. It contains nine cells. Its characteristics is a s follow• Positions an organization’s various divisions in a nine-cell display.• Similar to BCG Matrix except the IE Matrix:o Requires more information about the divisionso Strategic implications of each matrix are different• Based on two key dimensionso The IFE total weighted scores on the x-axiso The EFE total weighted scores on the y-axis• Divided into three major regionso Grow and build – Cells I, II, or IVo Hold and maintain – Cells III, V, or VIIo Harvest or divest – Cells VI, VIII, or IX
Internal External Evaluation Matrix
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Total weight of IFE 4 3.4 3 2 1
3
Total weightOf EFE 2
1
Steps for the development of IE matrix
Based on two key dimensions IFE and EFE.Plot IFE total weighted scores on the x-axis and the EFE total weighted scores on the y axisOn the x-axis of the IE Matrix, an IFE total weighted score of 1.0 to 1.99 represents a weakInternal position; a score of 2.0 to 2.99 is considered average; and a score of 3.0 to 4.0 is strong.On the y-axis, an EFE total weighted score of 1.0 to 1.99 is considered low; a score of 2.0 to 2.99 isMedium; and a score of 3.0 to 4.0 are high.IE Matrix divided into three major regions.Grow and build – Cells I, II, or IVHold and maintain – Cells III, V, or VIIHarvest or divest – Cells VI, VIII, or IX
The SBU of Zong (mobile) lies in 3, 5, 7 quadrant. So the strategy of these quadrants (hold and maintained) will be apply here.
Grand Strategy Matrix THE UNIVERSITY OF LAHORE
i. 1 i. 2 ii. 3
iii. 4 iv. 5 v. 6
vi. 7 vii. 8 viii. 9
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This is also an important matrix of strategy formulation frame work. Grand strategy matrix it is popular tool for formulating alternative strategies. In this matrix all organization divides into four quadrants.Any organization should be placed in any one of four quadrants. Appropriate strategies for anOrganization to consider is listed in sequential order of attractiveness in each quadrant of the matrix. It is based two major dimensions1. Market growth2. Competitive positionAll quadrants contain all possible strategies there are four quadrants in grand matrix that further contain various set strategies.
Quardrant-1Market developmentMarket penetrationProduct developmentForward integrationBackward integrationHorizontal integrationConcentric diversification
Quardrant-2Market developmentMarket penetrationProduct developmentHorizontal integrationDivestitureLiquidation
Quardrant-3RetrenchmentConcentric diversificationHorizontal diversificationConglomerate diversificationLiquidation
Quardrant-4Concentric diversificationHorizontal diversification
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GR AND STRATEGY MATRI X FOR ZONG
Quadrant II Quadrant I
Quadrant III Quadrant IV
ZONG lies in first quadrant so the all strategies of 1st quadrant can be apply on zong
Stage-3 (Decision Stage)
The Quantitative Strategic Planning Matrix (QSPM)
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Strong Competitive Position
Rapid Market Growth
Weak Competitive Position
Slow Market Growth
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The last stage of strategy formulation is decision stage. In this stage it is decided that which way is most appropriate or which alternative strategy should be select.
Steps in preparation of QSPM
1. List of the firm's key external opportunities/threats and internal strengths/weaknesses in the left column of the QSPM.
2. Assign weights to each key external and internal factor3. Examine the Stage 2 (matching) matrices and identify alternative strategies that the
organization should consider implementing4. Determine the Attractiveness Scores (AS)5. Compute the Total Attractiveness Scores6. Compute the Sum Total Attractiveness Score
Quantitative Strategic Planning Matrix (QSPM)
SELECTIVE STRATEGIES MARKET PENETRATION MARKET DEVELOPMENT
Key External Factors Weight Attractiveness Scores (AS)
Total Attractiveness Scores (TAS)
Attractiveness Scores (AS)
Total Attractiveness Scores (TAS)
Opportunities
1 Globalization 0.10 3 0.30 2 0.20
2 Marketing 0.15 4 0.60 3 0.45
3 Acquisition 0.08 2 0.16 2 0.16
4 New Product
Development
0.07 3 0.21 3 0.21
5 Northern Areas 0.10 3 0.30 2 0.20
6 Pak China Borders 0.13 3 0.39 2 0.26
Threats
1 Old Stable Companies
0.12 4 0.48 3 0.36
2 Attractive Packages 0.10 3 0.30 3 0.30
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By Others
3 Price War 0.06 3 0.18 2 0.12
4 Government Interference
0.09 3 0.27 2 0.18
TOTAL 1.00
Strengths
1 Investment 0.09 4 0.36 4 0.36
2 High Growth Rate 0.11 4 0.44 3 0.33
3 Advertising 0.12 3 0.36 3 0.36
4 Net Work Portability 0.12 3 0.36 3 0.36
5 Zong Mobile 0.07 3 0.21 3 0.21
6 Resources Assets And People
0.08 3 0.24 3 0.24
7 Location And Geographical Coverage
0.10 3 0.30 3 0.30
8 Government Dealing 0.09 3 0.27 3 0.27
Weaknesses
1 Bad Image Of Paktel 0.06 2 0.12 1 0.06
2 Coverage 0.07 1 0.07 1 0.07
3 Low Market Share 0.05 2 0.10 2 0.10
4 Weak MIS 0.04 2 0.08 1 0.04
SUM TOTAL ATTRACTIVENESS SCORE
1.00 6.10 5.14
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We select the two strategies market penetration and market development. There total attractive score is 6.10 and 5.01 respectively. The strategy market penetration has big score.
CONCLUSION
Zong has strong financial position and growing fast. That is the reason we didn’t found much discrepancies. As seeing the growth rate of Zong it may be possible that Zong can be the leading mobile operator in Pakistan. There are some minor discrepancies but they are adjustable with little effort.
Recommendation
Zong Telecom should be increasing their network coverage and foot prints in every
corner of the country to capture the market.
Zong should adopt the strategies of market penetration market development and related diversification, but the most effective strategy would be market penetration.
In the SBU of Zong mobile Zong should use the strategy of hold and maintain.
Zong should hire the skilled management.
Zong should not waste their opportunities and get more help as possible.
References
www.zong.com.www.google.comwww.pta.com.pk Rana Armughan Zong Garden Town Ali Block LahoreRao Farhan Ali Khan Zong Kchehri Chowk Multan
The end
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