strategic management - ufone project

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S T R A T E G I C M A N A G E M E N T M G T 6 0 3 FINAL PROJECT MC070400829 NOORUDDIN TEACHER: M SHAFIQ

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Strategic Management Project MGT 603Virtual University of Pakistan

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Page 1: Strategic Management - Ufone Project

S T R A T E G I C M A N A G E M E N T

M G T 6 0 3

FINAL PROJECT

MC070400829 NOORUDDINTEACHER: M SHAFIQ

Page 2: Strategic Management - Ufone Project

ACKNOWLEDGEMENT

As a student of course.strategic management – MGT 603 and all the preaching and guidance of

my course teacher Mr. M. Shafiq. I hereby present my final project as required on firm operating

in Pakistan belonging to telecom sector. i.e Ufone one of the leading cellular service provider

alongwith value added service and business strategies.

I also hereby present all the facts and figures which I gather about Ufone from newspapers,

websites and from Ufone’s annual report. Due to my job and other secular activities I couldn’t be

able to approach the firm directly, however with the help of my friends those close to Ufone. I

prepared this project for consideration of approval of my learning and understanding about the

said subject.

MC070400829

Signature

Page 3: Strategic Management - Ufone Project

EXECUTIVE SUMMARY

Ufone (official name: PTML) is a PTCL company, PTML (Ufone) - a wholly-owned subsidiary

has improved its financial performance commenced its operations on 29th January 2001 as a

GSM 900 service provider. Since the outset, it has expanded its coverage and customer base at

a rapid pace and established itself as one of the leading cellular service providers in Pakistan.

During the last year Ufone successfully completed the launching of sites under Phase V in

existing as well as new cities and towns by investing more than US$ 525 million. This has

increased the asset base of Ufone from rupees 20 billion to 27 billion. To further enhance the

subscriber base and strategically position the company in the growing telecom market, Ufone has

finalized a network expansion for Phase VI contract amounting to about US$ 170 Million. Ufone

currently, has network coverage in more than 4,745 locations throughout the country.

Ufone's operational performance has been very encouraging despite stiff

competition in Pakistan telecom market which has led to reduction of prices

to bare minimum level. Ufone managed to improve its revenue and after tax

profit by 87% and 54% respectively, as compared to the last year through

aggressive policies and exercising strict control over expenses.

Page 4: Strategic Management - Ufone Project

TABLE OF CONTENTS

Introduction………………………………………………..1.0Details of Project……………………………..1.1Purpose of Project……………………………1.2

Findings……………………………………………………2.0External & Internal Analysis……………….2.1SWOT Analysis…………………………….2.3EFE Matrix…………………………………2.4IFE Matrix…………………………………2.5Nine – Cell Diagram…………………….2.6BCG Matrix………………………………2.8

Details of Product …….2.8.1BCG Matrix……………2.8.2

QSPM…………………………………….2.9

Conclusion……………………………………………….3.0

Recommendation………………………………………4.0

References………………………………………………5.0

Page 5: Strategic Management - Ufone Project

1.0 INTRODUCTION

1.1 DETAILS OF THE PROJECT

Ufone is a Cellular Service Provider founded in 2001 It is also a subsidiary firm of PTCL As of 2008,

Ufone employs more than 1,730 people. It manufactures it’s the GSM company providing services to all

four continents urban and rural areas., As of 2008, Ufone is the second largest telecommunication

company in Pakistan. In recent years the company has endured significant improvement in services to

almost 4,745 locations throughout the country.

The major competitors of Ufone are domestic companies like

MOBILIINKPakistan 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

Area, Islamabad

TELENORTelenor (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.

PAKTEL/ CHINA MOBILE/CMPAKPaktel was the first ever company granted license to carry out cellular phone services in

Pakistan, set up by Cable & Wireless. It carried out AMPS services until 2004, when the

company launched GSM services as well. Its main competitor emerged in late 1990s as

Instaphone and soon began to dominate the market. On 4th May 2007, Paktel was renamed to

CMPak. And then, on 16th May 2007, China Mobile announced that it had upped its stake in

CMPak to 100%. Moreover, PTA (Pakistan Telecommunication Authority) has announced that it

may resolve the frequency issue with China Mobile, as it was one of the main reason for pullout

by Millicom International Cellular S.A.

Page 6: Strategic Management - Ufone Project

WARIDWarid Telecom International is an Abu Dhabi based mobile telecommunication firm providing

telephony services in Bangladesh, Pakistan and Uganda.

ZONG

Zong is the first International brand of China Mobile being launched in Pakistan. It is meant to

empower and liberate the people of Pakistan in every nook and corner of the country

1.1 PURPOSE OF THE PROJECT

The purpose of this project is to enhance the ability of understanding the important

factors, matrix, strategy of business. And also to encourage to know more about

the telecommunication sector in Pakistan.

Ufone is one of my favorite cellular company. I have being using Ufone since

2004. Over the past few years Ufone developed dynamically. Ufone is the purpose

of my project and my communication medium in life.

Page 7: Strategic Management - Ufone Project

2.0 FINDINGS

2.1 INTERNAL & EXTERNAL ANALYSIS

INTERNAL ENVIORNMENT

Human Resource ManagementMarketing DepartmentCommercial DepartmentSales DepartmentFinance DepartmentPayroll DepartmentInformation Technology DepartmentEngineering DepartmentAdministrationAuditing DepartmentCustomer Care

EXTERNAL ENVIORNMENT

Economic ConditionsSocial ConditionsCulture DemographicsEnvironmentalCompetitiveTechnologicalConsumer AttitudeGlobalization

Page 8: Strategic Management - Ufone Project

2.3 SWOT ANALYSIS

Strengths

1. Second Large Market ShareAlthough Ufones market share has dropped due to current economic and political circumstancesit but is still very much competitive at 20 percent.

2. Worldwide Cheap call ExperienceAs explained above even with Ufone’s recent decline they still have the market share and the experience to bounce back. They have been a nationwide company for nearly ten years now and have established themselves as the national leader for most of them.

3. Variety of Value Added ServiceProvide variites of value added services as compared to other cellular networks

4. Representing PTCL nameAs it is the subsidiary of PTCL.

5. Coverage on GT Road 60%Now covering Pakistan business highway upto 73%

Weaknesses

1. Behind on Excessive DemandThis is Ufone's biggest weakness is not attempting to meet the demands

2. Poor Organizational StructureCentralized structure failed to provide proper guidance over instruction and policies

3. Stagnant ProfitabilityAs compared to financial assets, Ufone is not close to expected profitability

4. Overly Dependent on PTCL.Subsidiary of PTCL, it is dependent on PTCL

Page 9: Strategic Management - Ufone Project

Opportunities

1. Can target CorporateIt is obvious that GM was behind its competition with regards to the research and development of hybrid vehicles. However hybrid technology is still very much new giving GM the opportunity to once again become the automotive industry's leader in innovation and technology.

2. Continuing to Expand Globally.Ufone have the ability to expand globally. But due to current economic condition all its operation are on halt

3. Publicity and MarketingWith the right marketing strategy they can acquire much more.

4. Develop New Value Added Service This is an opportunity that will never be satisfied, meaning that Ufone should always be attempting to keep improvising new valued added services, and as we know, what is in today will be out tomorrow.

Threats

1. Govt. InterferenceGovt. Interference will always be treated as a threat in terms of taxes.

2. PTCL cellular licenseUfone is nothing just a cellular license to PTCL. PTCL should provide more financial support to enhance profitability of its subsidiary company.

3. Pension Payouts.Part of this threat is their own doing and the other is simply unavoidable. Ufone is responsible for providing generous pension benefits to its employees, which at the time seemed like a great idea, however they are now experiencing problems as more and more people begin to collect.

4. Increased Health Care CostsUfone, like many large companies with quality employee health care benefits, is experiencing a large financial hit that only gets worse as time continues as compare to other cellular firms.

Page 10: Strategic Management - Ufone Project

2.4 EXTERNAL FACTOR EVALUATION

KEY EXTERNAL FACTOR

OPPORTUNITIES Weight Rating w.score1. Can target Corporate

2. Continuing to Expand Globally.

3. Publicity and Marketing

4. Develop New Value Added Service

.20

.20

.05

.10

4

4

3

3

.80

.80

.15

.30

THREAT1. Govt. Interference

2. PTCL cellular license

3. Pension Payouts.

4. Increased Health Care Costs

.10

.05

.15

.15

2

2

2

2

.20

.10

.30

.30

1.00 2.95

Page 11: Strategic Management - Ufone Project

2.5 INTERNAL FACTOR EVALUATION

KEY INTERNAL FACTORINTERNAL STRENGTH Weight Rating w.scoreHuman Resource Management

- Staff Remuneration - Staff Personal Finance

Marketing Department- Marketing Planning- Prices

Commercial Department- Promotion- Advertisement

Sales Department- Target Market- Skilled Staff

Finance Department- Earning Per Share- Royalties

Payroll Department- Staff Salaries- Staff Bonuses

Information Technology Department- Hardware - Network- Operations

Engineering Department- Tier 3 level engineers- Highly skilled

Administration- Day to day expenses- Correspondance

Auditing Department- Financial Lookup- Cost and Management

Customer Care- Tier 1 Level Support- Customer Support

.10

.05

.10

.15

.05

.05

.05

.05

.05

.05

.15

4

4

4

3

3

3

3

3

3

4

3

.40

.20

.20

.15

.15

.15

.15

.15

.15

.20

.15

INTERNAL WEAKNESSESHuman Resource Management

- Staff Family Planning- Staff Pension Funds- Staff Training

.05 2 .10

Marketing Department- Global Expansion

.10 2 .10

1.00 1.85

Page 12: Strategic Management - Ufone Project

2.6 Nine – Cell Diagram

4.0

THE IFE WEIGHTED SCORE

3.0 2.0 1.0THE EFE WEIGHTED SCORE

3.0

Human Resource Management- Staff Remuneration - Staff Personal Finance

Marketing Department- Marketing Planning- Prices

Commercial Department- Promotion- Advertisement

Auditing Department- Financial Lookup- Cost and Management

Can target CorporateContinuing to Expand Globally

2.0

- Sales Department- Target Market- Skilled Staff

Finance Department- Earning Per Share- Royalties

Payroll Department- Staff Salaries- Staff Bonuses

Information Technology Department

- Hardware - Network- Operations

Engineering Department- Tier 3 level

engineers- Highly skilled

Administration

Page 13: Strategic Management - Ufone Project

- Day to day expenses

- Correspondence-

Customer Care- Tier 1 Level

SupportCustomer Support

Publicity and Marketing

Develop New Value Added Service

1.0

Human Resource Management

- Staff Family Planning

- Staff Pension Funds

- Staff TrainingMarketing Department- Global Expansion

Govt. Interference PTCL cellular license Pension Payouts.Increased Health Care Costs

Page 14: Strategic Management - Ufone Project

2.8 BCG

2.8.1 DETAILS OF PRODUCTS

Ufone understands the value of words and the need to communicate effectively and efficiently at all levels of society, which is why company’s primary focus is on U. Ufone offers, Prepay & Postpay services in the Telecom sector.

The telecom market’s growing rate in Pakistan is higher than any Asian country. Ufone offers lower rates and better network then other already established cellular companies. All living standards have been captured by Ufone, like Students, Labour and Businessmen, etc.

Ufone aims to provide with wider coverage, superior connectivity, clear signals & voice quality to their valued customers

2.8.2 MATRIX

RELATIVE MARKET SHARE

MARKET GROWTH RATE

POST PAYS

STARS QUESTION MARK

PREPAY

CASH COWS DOGS

Page 15: Strategic Management - Ufone Project

2.9 QSPM

Weight Strategy. 1 Strategy. 2 Strategy. 3KEY EXTERNAL FACTORHuman Resource ManagementMarketing DepartmentCommercial DepartmentSales DepartmentFinance DepartmentPayroll DepartmentInformation Technology DepartmentEngineering DepartmentAdministrationAuditing DepartmentCustomer Care

.15

.15

.10

.15

.05

.05

.05

.05

.05

.05

.15

.60 .60.20.15.15.15.15.15.15.20.15

KEY EXTERNAL FACTOREconomic ConditionsSocial ConditionsCulture DemographicsEnvironmentalCompetitiveTechnologicalConsumer AttitudeGlobalization

.20

.20

.05

.10

.10

.05

.15

.10

.05

.80

.80

.20

.40

.40

.20

.60

.40

.20

3.0 Conclusion

In View of the following data Ufone is one of the telecom sector who need to produce more

output by implementing new technologies, new tariffs, new consumer satisfaction value added

service. Further, it is still the second largest cellular service provider in the country

4.0 Recomendations

Should encourage new products like, Ufone PCO, Broadband services etc from its existing two

services.

Page 16: Strategic Management - Ufone Project

Suggested Strategies

1. Market Development2. Market Penetration3. Product Development4. Restructuring5. Retrenchment6. Liquidation

5.0 References

Pakistan Telecommunication Website

PTCL Annual Report

Ufone Website

Friends

Teachers Handout,