report on strategic management by izhar muhammad student in im|sciences peshawar

8/9/2019 Report on strategic management by izhar muhammad student in im|sciences peshawar

1/24

REPORT ON

Warid telecommunication

Submitted By: izhar Muhammad

MBA- 3rd semester

GROUP- A

Submitted to: sir shaheer alam

Date of submission: 10-06-2010

1


2/24

Table of contents

Topics page #

1 introduction-company background 01

1.1 The group 01-021.2 The company 02

2 internal analysis 03

2.1 vision and mission statement, goals and objective... 032.1.1 Group vision and mission 03

2.1.2 Company 042.2 management philosophy and attitude, cultural and leadership 052.2.1 The group. 05

2.2.2 The company. 062.3 strategies formulation.. 06-7

2.3.1 List of strategies formulated 08-92.3.2 The strategies implementation. 102.4 enhancements of efficiency, quality, innovation and customer responsiveness.10

2.4.1 The company. 102.4.2 Competition 10-11

2.5 value chain 112.6 strategies Execution process 12-13

3 External analyses

3.1 PESTEL analysis 14-173.2 PORTERs 5 forces 17-183.3 SWOT analysis 18-20

4 conclusion 20

5 References . 21

2


3/24

1 Introduction Company Background:

The Dhabi Group is a multinational company based in the UAE, which owns and

operates a wide range of business concerns that are spread across 3 different continents.

It has a diversified business interest in the institutions that have enjoyed commercial

success as a result of its strong financial resources and extensive management expertise.

The Abu Dhabi Group's major investments are in the following sectors:

Telecommunications

Hospitality services

Property development

Oil exploration and supplies

Banking and financial services

Automobile industries

Warid Telecom takes pride in being backed by the Abu Dhabi Group, one of thelargestgroups in the Middle East and in Pakistan. Warid Telecom is currently operational inBangladesh and Pakistan, while it is also setting pace o initiate its operation inUganda& Congo. Within the markets Warid is already operating, it has quickly developed alarge customer base and established itself as one of the leaders of telecom servicesector.

In Bangladesh, Warid Telecom commenced its operations under a landmark MOUagreed upon by the Dhabi Group and the Government of Bangladesh worth USD 1billion, out of which USD 750 million was exclusively committed for investment inthetelecommunication sector of the country. Succeeding the MOU signing, the BTRClicense for telecom service provision was issued to Warid Telecom, followed by thesigning of interconnectivity agreement with all the existing telecom companies ofBangladesh.In May 10th, 2007, Warid Telecom launched its commercial operations inBangladesh

The Group Dhabi Group:

The Dhabi Group is a multinational company based in the UAE, which owns andOperates a wide range of business concerns that are spread across 3 different continents.It has a diversified business interest in the institutions that have enjoyed commercialSuccess as a result of its strong financial resources and extensive management expertise.

3


4/24

The Abu Dhabi Group's major investments are in the following sectors:

Telecommunications Hospitality services Property development

Oil exploration and supplies Banking and financial services Automobile industries.

Warid Telecom takes pride in being backed by the Abu Dhabi Group, one of the largestGroups in the Middle East and in Pakistan. Warid Telecom is currently operational inBangladesh and Pakistan, while it is also setting pace o initiate its operation in Uganda& Congo. Within the markets Warid is already operating, it has quickly developed aLarge customer base and established itself as one of the leaders of telecom service sector.In Bangladesh, Warid Telecom commenced its operations under a landmark MOUAgreed upon by the Dhabi Group and the Government of Bangladesh worth USD 1

Billion, out of which USD 750 million was exclusively committed for investment in theTelecommunication sector of the country. Succeeding the MOU signing, the BTRCLicense for telecom service provision was issued to Warid Telecom, followed by theSigning of interconnectivity agreement with all the existing telecom companies ofBangladesh.

In May 10th, 2007, Warid Telecom launched its commercial operations in BangladeshWith a network encompassing 26 districts. By November 2007, the network had beenExpanded to cover 61 districts and being used by 2 million customers.

1.2 Company:

Warid`s New Look:

An evolution that strengthens the Warid identity while keeping the customers inFocus Use of a more contemporary font & style to give a more approachable imageThis new logo encompasses the expanding reach of Warid not just in Pakistan butin an international footprintWith our strengthened GPRS/EDGE network we would empower our customersto create their own life style networks

Involving Businesses:

International Investments:

Iranian Sanden Industries J.C. Mc Leans & Co. Neo Pharma National Tele Systems and Services Al-Jazira Management Mall

4


5/24

Abu Dhabi Vegetable Oil Company Nama Development Enterprises. Le Royal Meridian Hotel, Abu Dhabi Dhabi contracting Union National Banking, U.A.E.

Alfalah Exchange Company, U.A.E. Bank Alfalah Ltd., U.A.E.

Investment in Pakistan:

. Bank Alfalah Ltd. Alfalah GHP Investment Management Alfalah Securities United Bank Limited Warid Telecom Wateen Telecom

Emaar Al Bilaad Properties

Warid Team:

Board of Directors:

1. Mr. Bashir A. Tahir2. Mr.Parvez a. Shahid3. Mr. Lim Chaon Poh4. Mr. Quah Kung Yang

Management Team:

1. Mr. Tariq Gulzar (Chief Financial Officer)2. Mr. Shahzad Rauf (Chief Strategy and Operation Officer3. Mr. Javed Mushtaq (Chief Information Officer)

2. Internal Analysis:

2.1 Vision and Mission statements, goals and objectives:

2.1.1 Groups Mission and Vision Statement:

To be Asia Pacifics best multimedia solutions group. Breaking Barriers, BuildingBonds.We enable communication by breaking barriers and building bonds. We helpbusinesses and people communicate anytime, anywhere and in variousways.We makecommunications easier, faster, more economical and reliable by: Breaking the barriers ofdistance, price, time and technology, and Building strong bonds among SingTelemployees, and with our shareholders, customers and business partners. We believe that

5


6/24


7/24

purchase prepaid scratch cards and load it into its Warid SIM at any time during aperiod of one year. The customers of Zem connections are free to load balances at anytime and amount of their own choice.

Zahi:

Zahi is a post-paid connection provided by the Warid telecom. In this connection, thecustomer has to pay line rent plus the charges of call every month. In this connectioncustomer is billed every month. In this connection Warid, telecom has four furthercategories Silver Gold Diamond Platinum

2.2 Management philosophy and attitudes, culture and leadership:

The company base rests on management's philosophy, values, vision and goals. This inturn drives the organizational culture which is composed of the formal organization,informal organization, and the social environment. The culture determines the type ofleadership, communication, and group dynamics within the organization. The finaloutcomes are performance, individual satisfaction, and personal growth and development.

2.2.1 Group:

Core Values underpin our desire to create a unity of purpose across the Group. They

reflect our common aspiration to foster a performance-based culture that is open andinnovative, and that promotes mutual trust and engagement.

Customer Focus:

Our success is based upon our customer focus. We listen to, and connect with, customersand treat them with dignity and respect. By understanding and anticipating their needs,we make it easy for our customers to do business with us. We aim to offer them valueand quality services to enrich lives and enhance business success.

Challenger Spirit:

The creativity and innovation of our people set us apart. We look for better ways of doingbusiness and share a passion for making a difference. When faced with challenges andopportunities, we do not say Cannot but ask Why not?. We are tenacious and wecompete fairly.

7


8/24

Teamwork:

By working as one team with shared goals, we believe we can achieve great things. Wevalue ideas and contributions from everyone. We recognize, respect and value diversityin the team. We develop strong bonds by communicating and sharing knowledge. We

encourage open discussion and commit to an agreed position. All of us have a part toplay.

Integrity:

Our reputation is based upon our ability to fulfill promises to shareholders, customers andemployees. We do so by being honest in our dealings, taking responsibility and beingaccountable for our actions. We treat everyone the way we would like to be treated. Weare proactive in identifying issues and coming up with solutions. We ensure that thehighest ethical standards guide us in making decisions.

Personal Excellence:

Leadership and superior performance are achieved through the pursuit of personalexcellence. We are committed to doing and being the best. We seek continuousimprovement and take pride in what we do. We do things to the highest possiblestandards. We acknowledge the potential of the individual and create opportunities for allto grow and excel. Together, we celebrate our success and achievements.

2.2.2 Company:

According to the seasoned management author and practitioner, Peter Drucker, All

modern businesses have two and only two functions, Marketing and Innovation; the restis cost on business.

One can imagine how important innovation is for operating in todays businessenvironment. Warid insists on periodic innovations in products, customers retention fora longer time is impossible. It is impossible for technology dependant firms to survivewithout consistent innovation. Innovation can be the prime reason for a firms success.Innovation offers a competitive advantage, but it is costly and often is easily copied bycompetitors. For that reason, innovation tends to be more of an advantage in highlyevolving industries like Telecom, fashion, etc. In those industries, trends change quickly,so there is less risk of innovation by one company being copied by another company

2.3 Strategy Formulation:

It is useful to consider strategy formulation as part of a strategic management process thatcomprises three phases: diagnosis, formulation, and implementation. Strategicmanagement is an ongoing process to develop and revise future-oriented strategies thatallow an organization to achieve its objectives, considering its capabilities, constraints,and the environment in which it operates.

8


9/24

Diagnosis includes: (a) performing a situation analysis (analysis of the internalenvironment of the organization), including identification and evaluation of currentmission, strategic objectives, strategies, and results, plus major strengths and weaknesses;(b) analyzing the organization's external environment, including major opportunities andthreats; and (c) identifying the major critical issues, which are a small set, typically two

to five, of major problems, threats, weaknesses, and/or opportunities that requireparticularly high priority attention by management.Formulation, the second phase in the strategic management process, produces a

clear set of recommendations, with supporting justification, that revise as necessary themission and objectives of the organization, and supply the strategies for accomplishingthem. In formulation, we are trying to modify the current objectives and strategies inways to make the organization more successful. This includes trying to create"sustainable" competitive advantages -- although most competitive advantages are erodedsteadily by the efforts of competitors.

Three Aspects of Strategy formulation:

The following three aspects or levels of strategy formulation, each with a different focus,need to be dealt with in the formulation phase of strategic management. The three sets ofrecommendations must be internally consistent and fit together in a mutually supportivemanner that forms an integrated hierarchy of strategy, in the order given.

Corporate Level Strategy:

In this aspect of strategy, we are concerned with broad decisions about the totalorganization's scope and direction. Basically, we consider what changes should be madein our growth objective and strategy for achieving it, the lines of business we are in, andhow these lines of business fit together. It is useful to think of three components ofcorporate level strategy: (a) growth or directional strategy (what should be our growthobjective, ranging from retrenchment through stability to varying degrees of growth - andhow do we accomplish this), (b) portfolio strategy (what should be our portfolio of linesof business, which implicitly requires reconsidering how much concentration ordiversification we should have), and (c) parenting strategy (how we allocate resourcesand manage capabilities and activities across the portfolio -- where do we put specialemphasis, and how much do we integrate our various lines of business).

Competitive Strategy (often called Business Level Strategy):

This involves deciding how the company will compete within each line of business(LOB) or strategic business unit (SBU).

Functional Strategy:

9


10/24

These more localized and shorter-horizon strategies deal with how each functional areaand unit will carry out its functional activities to be effective and maximize resourceproductivity.

2.3.1 List of Strategies Formulated:On account of sluggish economic growth and political instability in the country, wesuggest that the company should localize its strategy in order to increase its market shareand improve its financial performance

Marketing Strategies:

Warid Telecom has divided its segmentation and strategy division into five segments onthe basis of their characteristics. Markets consist of buyers and buyers differ in one ormore ways. They may differ in their wants, resources, locations, buying attitudes andbuying practices. The core concept behind companies using marketing segmentationconcept is to divide large homogeneous markets into smaller segments that can bereached effectively and efficiently with products and services that satisfy needs, wants,desires and trends of certain segment.Characteristics that govern segmentation and strategy development in Telecom industry

Specifically mobile services according to a certain segment areAgeEducational backgroundGender

IncomeNational, regional or other geographical areas of originSocial classReligionCultureBehaviorsPopulationTele density in area to be segmentedSo according to these above mentioned factorsWarid divide its marketing strategy intofive segments which arePostpaid Segment

Masses SegmentFemale SegmentYouth SegmentCorporate Segment

Postpaid Segment:

10


11/24


12/24


13/24

Currently, with a market share of over 24%, and an aggressive commercial plan, we havemore than tripled our customer base in the last quarter to over 1.5 million subscribersthe fastest uptake of any cellular service operator in Pakistan!Ufone is the only GSM operator with 2.5G GPRS service, which is the next generationtechnology and offers

High speed data service. WAP data service. Multimedia messaging service. Offer real VPN system for corporate clients. Ufone is the subsidiary of PTCL. Therefore it has better protection.Mobilink GSM (PMCL), a subsidiary ofOrascom Telecom, is the market leader inproviding state-of-the-art communications solutions in Pakistan. We can proudlyboast ofbeing the first cellular service provider in Pakistan to operate on a 100% digital GSMtechnology.We offer tariff plans that are exclusively designed to cater to thecommunication needs f a diverse group of people, taking into account occasional users tobusinessmen. To chieve this objective, we offer both postpaid (Indigo) and the prepaid

(JAZZ) solutions to our customers. n addition to providing advanced voicecommunication services, we also offer a number of value added services to our valuedsubscribers. Keeping in mind our customers' onvenience, we have also bundled mobilehandsets, either sold independently or undled in Get Set Go PackMobilink GSM started operations in the year 1994; from then on it has shown enormousrowth. At the time when it entered the market it was a small player in the cellular arket ofPakistan it is now the market leader both in terms of growth as well as in erms of havingthe largest subscriber base in Pakistan ISO 9002 Quality Management SystemCertification for Billing, EngineeringDepartments and CS Contact Center Implementation of a full Intelligent Network (IN)latform from Siemens for the Prepaid platformggest Call Center in Pakistan, which isthere to assist the customers 24 hours.Only cellular service in Pakistan to provide coverage on the M2 motorway.Bilateral roaming agreements signed with 100 countries around the world to have trueoaming service operational in 151 operators of the world.MOBILINK GSM's Short Message Service Center allows Vehicle Tracking and Fleetanagement services that are being provided by Tracker (Pvt.) Ltd., under the brand ameof C-Track, a company licensed by Pakistan Telecom Authority (PTA). Tracker urrentlyoperates from Karachi but can provide these facilities at all those locations here GSMcoverage is available.

2.5 Value Chain Analysis:

A value chain is a chain of activities for a firm operating in a specific industry. Thebusiness unit is the appropriate level for construction of a value chain, not the divisionallevel or corporate level. Products pass through all activities of the chain in order, and ateach activity the product gains some value. The chain of activities gives the productsmore added value than the sum of added values of all activities. It is important not to mixthe concept of the value chain with the costs occurring throughout the activities. Adiamond cutter can be used as an example of the difference. The cutting activity mayhave a low cost, but the activity adds much of the value to the end product, since a rough

13


14/24

diamond is significantly less valuable than a cut diamond. Typically, the described valuechain and the documentation of processes, assessment and auditing of adherence to theprocess routines are at the core of the quality certification of the business, e.g. ISO 9001.

2.6 Strategy Executive Process:

This process empowers every employee toward a common strategy by focusing on acontinual process of prioritization, improvement, and control. In other words, it solidifiesthe workforce towards contributing to the development and implementation of asuccessful strategy via these three important parameters. The organization plans anddeploys strategic objectives during prioritization, while employees and managementcontinually fix performance gaps in the most critical areas throughout improvement, andsubsequently lock-in on improvement gains during control.

Activities to be implemented:

Sales representatives target all the untapped markets and niches, byusing WARIDs current products.

Revenue objectivity should be given high attention , and it shouldincrease by 40% every year (for the next 2 years.)

Product line should be extended by offering new service for thecustomers.Warid is lacking in communication with its customers so it shouldfocus on this activity.

More Regional Departmentalization should be there for detailed

marketing analysis.There should be dencetrization decision making and employee shouldbe encouraged for their opinions.More budget and resources should be allocated to advertisement andsales promotion.

Role of R&D should be increased to helpa) Target markets most effectivelyb) To get knowledge about consumers table and preference as.

How implementation is to be done:

Develop desirable skills in the employees who are assigned the basicsof target implemented these skills may include.The ability of sales force, personnel in finance department, expertin R&D etc, should first understand the nature of the tasks ortasks importance foot the company.To increase the ability to put right people on right jobs .i.e. Theperson of finance dept. should not be given the tasks of R&D,which is highly sensitive and innovational field.

14
http://en.wikipedia.org/wiki/ISO_9001http://en.wikipedia.org/wiki/ISO_9001


15/24

Responsibilities for implementation:

Create the effectiveness of the personnel to focus on critical aspects of their

job.

Other remedies to enhance implementation include:

Organizational Design:

Organizational design should consist of multifunctional teams,Including at least 1 member of each department to solve the problem orto achieve the targets.

Incentives:

Various rewards may help achieve successful implementation.For Example in case of WARID TELECOM, bonuses or commissionshould be given to members of sales force/personal selling teams whosales more than its target.

Communication:

Rapid and accurate movement of information should beconfirmed .To do so efficient and effective feedback systems should be introduced.

Time and location of implementation:

Proper time period should be given for the start and end of the task andeach personnel related to that specific job should be given completeinformation about the geographic area of his/her sales and the volume tobe sold in case o personal selling and sale promotion.(the balanced score board techniquemay be adopted)

Evaluation and Control:

For evaluation and control WARID should conducts a comprehensive auditof all the depts. By comparing the current results to that of companyobjectives .They get comprehensive information from all the departmentscarefully and its analysis is conducted with great care. The results areanalyzed with great emphasis on the companys behalf. If there appears anydeficit then revise their strategies implement them and then get the results and if there areno loopholes found they continue to implement thatstrategy for the specified period of time. This evaluation conduct twice a year

15


16/24

3External Analysis :

PEST Analysis of Warid Telecom

A PEST analysis is the analysis of the external macro environment that affects all thefirms, P.E.S.T is an acronym for the political, economics, social and technological factorsof the external macro environment.These factors are out of control of the organization. However, changing externalenvironment can also create new opportunities. Below is the explanation of the macroenvironmental factors which we have analyzed for Warid Telecom.

1) Political and legal Factors

Political Instability in Pakistan:

Recent political instability in Pakistan has affected almost all businesses in Pakistan.Warids sales and scratch cards turnover has shown a considerable decrease due touncertain political situation in Pakistan. The current uncertainty has its origins in amilitary revolution in 1999 which appointed the head of the army, General PervezMusharraf, as president. With powers to dismiss the elected government backed by strong

influence over the judiciary in Pakistan.

Political Interference in Warid:

High political approaches in recruitment and selection procedure in Warid are deprivingWarid of getting the right and deserving truly qualified human resources. Most of therecruitments have been done on the basis of political approaches. Mr. Omer Haider,General Maneger of Warid is the cousin of President of Pakistan. Annual increments andbonuses are under the political influences. Employees, with high political approaches gettheir commissions and bonuses double than their efforts. High political and social figuresin Pakistan have got free postpaid connections for their business purposes, which has

affected Warid in financial terms.

Terrorism:

Warid spent Rs.94 million to improve network coverage in Swat. The work has beenstopped due to the ongoing terrorists activities in Swat. Same is the case in tribal areaswhere Warid has wasted millions of rupees.

16


17/24

Deregulation Policy:

Pakistan governments deregulation policy for telecom sector in Pakistan has encouragedmany investors to come and invest in Pakistan.

Policy Objectives:

Increase service choice for customers of telecommunication services atcompetitive and affordable rates

Promote infrastructure development, especially infrastructure that will increaseteledensity and the spread of telecommunication services in all market segments(Including voice, data and cellular etc)

Increase private investment in the telecommunication sector and encourage localtelecom manufacturing / service industry

Policy Tenure:

The Policy would be valid for five years from date of implementation and will be subjectto review after this period. The licenses awarded to LL / LDI operators will be valid for20 years.

Advertising Problems:

Warid mostly advertises on private cable channels; Geo, Geo Super and ARY.Governments ban on these channels in Pakistan a few months ago, affected Warids

advertising activities.

Long Legal Formalities:

Warids expansion strategies for installing new network boosters are sometimes affectedby time wasted in fulfilling long legal formalities.

2) Economic Factors:

Pakistans economy is basically a growing economy, mostly dependant on foreigninvestment. Pakistan has been ranked as one of the top favorable economies in the world,

states Doing Business 2008, a recent report released by the World Bank in 2008.Despite ups and downs and political uncertainty in the country, foreign investment hascontinued to flow in. It is worth mentioning that our trade with Asian countries, otherthan Middle East, in the year 2003-4, was US$ 8 billion. Exports were $2.8 billion andimports accounted for US$ 5.2 billion. A major portion of this trade volume was withJapan and China. Trade with other East Asian countries was only around $2 billion. Thetrade balance with Asia is heavily tilted against us. The economy of Pakistan is primarilydriven by agriculture, which accounts for the largest share of GDP, contributing about

17


18/24

25% to the economy. Pakistans per capita income per annum was about US $ 858 in2006. The Pakistani economy throughout 2006 has continued to post strong results withinflation under control at approximately 3% per annum and GDP growth at 5%.

A rise in the prices of goods represents inflation. Inflation rate in Pakistan is rising faster

than the personal income of an average individual. Inflation rate is 7.76 andunemployment rate is 6.50%. Pakistans currency is loosing its value day by day due tothe uncertain political situation and security problems. A table below shows the foreigncurrency exchange rates in Pakistani rupee. US dollars buying rate was 61.8 in March2008 but in May, with a break of only two months it jumped to 65.46. This is howeconomic fluctuations take place in Pakistan and thats why investors are afraid ofPakistan.

Due to high inflation rate people nowadays prefer their basic needs rather than savingmoney for communication expenses. Therefore telecom industry as a whole is loosing itslow income consumers. Telephony in Pakistan is an optional choice due to taxes.Taxation does not end at connection taxes and call taxes. An additional 10 per cent tax is

levied on all prepaid scratch cards and also adjusted on postpaid numbers. Even outgoingSMS is taxed at a similar rate. New mobile connections are still heavily taxed at Rs.800per connection by Pakistan Telecommunication Authority.

3) Social Factors:

Pakistans Demographics:

Pakistan is an ideological state, based on the concept of Islam. 98% of the Pakistanspopulation is Muslims. Rest of the 2% is a mixed population of Christians and others.

There are 24 different types of cultures identified in Pakistan. The westernization has aprofound impact on Pakistans basic cultural values. Society of Pakistan is a collectivisticsociety. People in Pakistan like to live for collective interests of people all around.Family, relations and cultural values matters a lot for a Pakistani. However,westernization has cast a profound impact on Pakistans basic cultural values. The trendsand lifestyles are changing very rapidly. Mostly affected are the urban areas. Speed ofdiffusion in rural areas in a bit slower but unwantedly they have been affected by westernculture.

18


19/24

Pakistan has experienced sizable population growth over the last few decades. Located inthe South Asia, Pakistan comes in 10 most populous countries in the world with apopulation base of 150 million. Its current population is expected to grow to 190 millionby 2018 according to UN forecasts. Assuming that future cellular coverage reaches 95%

of all urban population and 30% of rural population and taking into account the relativegeography and population density of each Province, there is a potential demand ofapproximately 25 million cellular subscriptions by 2018.As a whole literacy rate in Pakistan is 28%. The rate of male and female education is61.2% and 32.2% respectively.Any change in peoples socio-cultural pattern, affect businesses operating in that area. Alltelecommunication companies including Warid is deprived of a huge segment of femaleconsumers in rural areas of Pakistan. A cell phone usage by females in rural areas isconsidered against the cultural values. Sometimes, people spread rumors about mobile phones like mobile virus, which mislead some unaware and simple people whoeventually stop using cell phones.

4) Technological Factors:

Technology has a tremendous impact on life style, consumption pattern and economicwell being. The introduction of modern technology in the field of communication hascompelled people to improve their life style and businesses. Technology affects nearly allbusinesses but the rate of diffusion of modern technology in communication sector isfaster than any other business sector. People in Pakistan have started realizing that time ismoney and if they want to save money they need to utilize quick and faster technologiesavailable. In todays business environment, companies operating in the communicationindustry have to provide the modern, up to date technology to its customers. Companies

without technological considerations for its customers are surely to fail. Thus withouttechnology telecom companies cant survive in todays business environment.

3.3 Porters 5 forces and industry attractiveness strength of competitive

pressure as an overview:

In telecommunication sectors Porter' five forces can be better applied as compared toother businesses. Below we have discussed all those factors which directly and indirectlyaffect Warid Telecom.

The Threat of New Entrants in Telecom Industry:

Government of Pakistan is giving a friendly environment to telecommunication sectors.Now there are six competitors in telecom sectors and competition is becoming hardamong these telecom sectors. It is said that although Telenor has 18% market sharecompared to Ufone'22% but Telenor has continued its efforts even to outdo the telecomgiant in Pakistan, Mobilink. Therefore Telenor is creating a tougher environment for

19


20/24

Warid. Furthermore the entry of Vodafone can create unpredictable situation for Warid.So we can say that the threat of new entry in telecom sectors is very high.

The Power of Buyers:

There are six competitors in telecom sectors having strong competition. They are offeringattractive packages at cheaper price. Buyers have the power to buy any service whichsuits them. Introduction of MNP (Mobile Number Portability) has given service to thecustomers to switch to another telecom company if they are not satisfied with theircurrent connection. So in Pakistan the power of buyers for telecom sector is high. Alltelecom companies devise their strategies and policies as per the customers demands.

The Power of Suppliers:

In telecommunication sectors the competition between suppliers is also high. As ZTE,Alcatel, Nortel, Sony Ericsson, Nokia and Huawei are the suppliers of boosterequipments. Each one has contract with different telecom companies. So we can say thatbargaining power of suppliers is a bit higher, but Warid having a strong financial base donot face any difficulty in contracting these suppliers.

The Threat of Substitute Product or Service:

The threat of substitute product is high because government of Pakistan is giving manylandline and wireless loop to different companies like PTCL wireless loop and GOCDMA. Although currently they are only providing SMS and CLI services but in futureit is expected that they will offers exact services like mobile phones.

3.3 SWOT Analysis of Telecom Sector:

SWOT Analysis is a tool that identifies the strengths, weaknesses, opportunities andthreats for the organization. Specifically, SWOT is a basic, model that assesses what anorganization can and cannot do as well as its potential opportunities and threats.

Major difference between SWOT and PEST analysis:

PEST assesses a market, including competitors, from the standpoint of aparticular proposition or a business.

SWOT is an assessment of a business or proposition, whether your own or acompetitors.

SWOT Analysis of Warid Telecom is given below:

20


21/24

Warid like all other organizations possesses some strengths, weaknesses, threats andopportunities.

Strengths of Warid Telecom:

Warids strengths are those features and packages which gives Warid Telecom an edgeover other telecommunication services providers in Pakistan. Warid key strengths arediscussed below;

Not tax charges on card loading. On loading Warids scratch card of 100 rupeescustomers get total 100 rupees. While loading any other telecoms card 9% isdeducted as government taxes.

Warid has largest postpaid subscribers base in Pakistan.

Sim capacity of Warid is 64 kb for postpaid and 3 kb for prepaid. None of thecompetitors of Warid gives this much facility.

Warid has largest postpaid subscribers base in Pakistan.

Warid scratch cards can be used for making calls from PTCL.

Warid uses booster technology of Sony erricsson, which is the most moderntechnology used by a cellular company in Pakistan.

Warid offers Zero line rent on postpaid connection.

Warids network frequency is the highest of all cellular companies. i.e. 1900mega Hz.

Weaknesses of Warid Telecom:

Warid Telecom has limited network coverage. It operates in about 150 cities andtowns in Pakistan. On the other hand Ufone and Mobilink have covered almost allparts of the country.

Warids promotional activities are limited as compared to Telenor and othercellular service providers

Warid has amateur IT staff, who cant handle customer feedback, emails anddatabase.

Although Warid is a company backed by financially strong Abu Dhabi group,employees still complained about their salaries.

Customer care section is comparatively weaker than other cellular companies.

Opportunities available to Warid Telecom:

If Warid Telecom improves its network coverage it can attract million of morecustomers.

21


22/24

Warid can utilize Wateens gateway technology for connectivity purposes. If itdid this, on one hand Warid can offer surprisingly lower call rates to itscustomers, since Wateen is Warids sister company. On the other hand it will getride of PTCLs heavy taxes for using PTCLs gateway.

Warid is an Arabic brand name; millions of pro-Islam and anti-Western customers

can be attracted by effective marketing strategies. Warid should treat education sector as a separate segment because it is a huge

segment, ignored by other telecom companies.

Threats to Warid Telecom:

Competitors strong and effective advertising strategies are distorting the initiallydeveloped good image of Warid Telecom

Customers unsatisfied state due to weak network coverage of Warid may create aweak competitive ground for Warid

Weak customer care department may affect its present customers satisfaction Employees at Warid are not happy with their salaries and treatment by seniors

which can lead to some drastic results for Warid in future

Call connectivity and call crossing problems may hurt customers loyalty

Most of the franchisees are not satisfied with companies strict policies regardingtheir rights. Their complaint is that company is not cooperating with them inmarketing and advertising efforts

Specifically Ufone and Telenors attractive packages like Free Minute and SMSbundle packages are a serious threat to Warid.

4 Conclusion:

So far looking at the Warid strategies, we have come to conclusion that

to survive in the long run Warid is doing strategic partnership with Nokia and Ericson.

Its like that they cant manage their network by their own. Its seems they cant do

research of market so they are taking help from international companies that are already

functioning in the Pakistan.

Warid is increasing its customer base, but not considering quality of their network. So it

will create problems for them in the future. Customer complaints are not fulfilled by the

Warid. There is no rapid response to the need of the customers. Warid is not very

successful globally. It is functioning in Bangladesh and Uganda, these are developing

22


23/24

countries. And Warid is not very successful in both of the country. Warid is now unable

to continue its cost leadership strategy. Its cant low its prices any more.

At the operational point Warid is not good. It seems it is going to be sold.

So in the long run it is difficult for the Warid to survive. Changing of its corporate

Slogan gave the idea that it is not any more customer oriented company

5. References:

Book Consulted:

Title: Marketing Planning and Strategy

Author: S. Jain

Edition: 6th

URLs Visited:

www.knowthis.com

www.answers.com

www.netmba.com

www.wikipedia.org

http://netxpress.com.pk/2008/05/12/pakistan-stock-market-has-huge-potential-usambassador/

http://www.privatisation.gov.pk/Handout/HO-AR-08/Apr-08/HO2942008%20P

Persons Contacted:

Mr. Sheraz Khan

Corporate Sales Manager, Warid Telecom

Mr. Pervaiz Khan

Corporate Placement Manager, Warid Telecom

Mr. Fakhr-e-Alam

23
http://www.knowthis.com/http://www.answers.com/http://www.netmba.com/http://www.wikipedia.org/http://www.privatisation.gov.pk/Handout/HO-AR-08/Apr-08/HO2942008%20Phttp://www.knowthis.com/http://www.answers.com/http://www.netmba.com/http://www.wikipedia.org/http://www.privatisation.gov.pk/Handout/HO-AR-08/Apr-08/HO2942008%20P


24/24

Corporate Sales Manager, Warid Telecom

report on strategic management by izhar muhammad student in im|sciences peshawar

Documents