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Strategic Management - Warid Telecom

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  • 1. P R E S E N T E D T O : Z A R R A R Z U B A I R STRATEGIC MANAGEMENT
  • 2. Group Members  Umair Khalid Paracha (13257)  Zeeshan Valliani (12543)  S.M. Zeeshan (8779)  Muhammad Kashif (11017)  Muhammad Asim Hayat (11084) ASIM HAYAT ZEESHAN VALLIANI ALI ZEESHAN KASHIF UMAIR PARACHA
  • 3. About Warid Telecom  Warid Telecom is one of the cellular service providers in Pakistan  100% owned company of the Abu Dhabi Group  Started its operation in May 2005  Acquired license for $291 million US dollars  Offers state-of-the-art telecommunication services at over 7,000 destinations in Pakistan
  • 4. Vision & Mission Statement  Mission and Purpose “Warid’s aim is to be perceived not only as a telecommunication operator of voice services, but also as a universal provider of comprehensive communications services for both residential and business customers. Warid's corporate identity seeks to reflect the changes in telecom sector in relation to helping customers keep pace with rapidly changing technology in the field of communication, through maximum network coverage and clear connectivity that we have committed to provide”
  • 5. Vision & Mission Statement Determinants Customers Products and Service Markets Technology Survival Growth and Profitability Self Concept Concern for Public Image Philosophy Concern for Employees        Analysis of Warid’s Mission Statement
  • 6. Vision & Mission Statement  Vision The company’s vision is to  “To become the primary service provider of all communication needs of subscribers in Pakistan‚ supported by exemplary customer care”.
  • 7. Industry Overview Annual Cellular Subscribers Mobilink Ufone Zong Instaphone Telenor Warid Total 2003-04 3,215,989 801,160 470,021 535,738 5,022,908 2004-05 7,469,085 2,579,103 924,486 454,147 835,727 508,655 12,771,203 2005-06 17,205,555 7,487,005 1,040,503 336,696 3,573,660 4,863,138 34,506,557 2006-07 26,466,451 14,014,044 1,024,563 333,081 10,701,332 10,620,386 63,159,857 2007-08 32,032,363 18,100,440 3,950,758 351,135 18,125,189 15,489,858 88,019,812 2008-09 29,136,839 20,004,707 6,386,571 34,048 20,893,129 17,886,736 94,342,030 2009-10 32,202,548 19,549,100 6,704,288 0 23,798,221 16,931,687 99,185,844 2010-11 33,378,161 20,533,787 10,927,693 0 26,667,079 17,387,798 108,894,518 2011-12 34,703,110 22,019,458 14,423,646 0 28,470,254 14,990,190 114,606,658 May 2013 36,747,587 23,869,218 20,199,828 0 31,693,191 12,503,036 125,012,860
  • 8. Porter’s Five Competitive Forces
  • 9. Threat of New Entrants Yes M No Do large firms have a cost or performance advantage in your segment of the industry?  Are there any established brand identities in your industry?  Does your company incur any significant costs in switching suppliers?  Is a lot of capital needed to enter your industry?  Does the newcomer to your industry face difficulty in accessing distribution channels?  Does the newcomer have any problems in obtaining the necessary skilled people, materials or supplies?  Does your product or service have any proprietary features that give you lower costs?  Are there any licenses, insurance or qualifications that are difficult to obtain?  Can the newcomer expect strong retaliation on entering the market?  7 1 1 Porter’s Five Competitive Forces
  • 10. Bargaining Power of Buyers Yes (+) M No (-) Are there a large number of buyers related to the number of firms in the business?  Do you have a large number of customers, each with relatively small purchases?  Does the buyer need a lot of important information?  Is the buyer aware of the need for additional information?  Is there anything that prevents your customer from taking your function in-house?  Your customers are not highly sensitive to price.  Your product is unique to some degree or has accepted branding,  Your customers’ businesses are profitable.  You provide incentives to the decision makers.  3 3 3 Porter’s Five Competitive Forces
  • 11. Bargaining Power of Suppliers Yes (+) M No (-) My inputs (materials, labor, supplies, services etc.) are standard rather than unique or differentiated.  I can switch between suppliers quickly and cheaply.  My suppliers would find it difficult to enter my business or my customers would find it difficult to perform my function in-house.  I can substitute inputs readily.  I have many potential suppliers.  My business is important to my suppliers.  My cost of purchases has no significant influence on my overall costs.  4 1 2 Porter’s Five Competitive Forces
  • 12. Threat of Substitutes Yes (+) M No (-) Substitutes have performance limitations that do not completely offset their lowest price. Or, their performance is not justified by their higher price.  The customer will incur costs in switching to a substitute.  Your customer has no real substitute.  Your customer is not likely to substitute.  2 1 1 Porter’s Five Competitive Forces
  • 13. Rivalry Against Competitors Yes (+) M No (-) The industry is growing rapidly.  The industry is not cyclical with intermittent overcapacity.  The fixed costs of the business are a relatively low portion of total costs.  There are significant product differences and brand identities between the competitors.  The competitors are diversified rather than specialized  It would not be hard to get out of this business because there are no specialized skills and facilities or long-term contract commitments, etc.  My customers would incur significant costs in switching to a competitor.  My competitors are all of approximately the same size as I am.  0 4 4 Porter’s Five Competitive Forces
  • 14. Overall Industry Analysis Overall Industry Rating Favourable Moderate Unfavourable Implications 1 Threat of New Entrants 7 1 1 It is difficult for new players to enter so the current ones can avail larger shares. 2 Bargaining Power of buyers 3 3 3 The buyer power is moderate. 3 Bargaining power of Suppliers 4 1 2 The suppliers cannot impose any conditions on the company due to less power. 4 Threat of Substitutes 2 1 1 There are no real substitutes which is good for the industry. 5 Rivalry against competitors 0 4 4 The competition is strong therefore; the industry is facing tough competition among all rivals. Total 16 10 11
  • 15. PEST ANALYSIS
  • 16. Political Factors  Political instability issues  Security conditions are not stable  Profits can only be generated either through cost reductions or branding  Cost reductions are easy for this sector because the portion of variable cost in the total cost is low  Only the initial capital investment is very high PEST Analysis
  • 17. Economic Factors  Inflation  High Interest rates  Purchasing Power  Price Wars  Economics of Scale PEST Analysis
  • 18. Social Factors  Pakistan is a very social country  There are several Festivals  Such as Eid  Family & Friends Packages PEST Analysis
  • 19. Technological Factors  State of the art technology has to be implemented to gain a competitive edge  Must acquire 3G License PEST Analysis
  • 20. Opportunities Threats  Acquire 3G License  Expand Customer base  Expand Network coverage  Provide more value added services  Packages for Family & Friends  Buyers can easily switch to other networks  High initial capital investment  Price wars among competitors  Competitors can easily follow Opportunities & Threats
  • 21. External Factor Analysis Key External Factors Weight Rating Weighted score Opportunities Expand customer base 0.1 2 0.2 Expand network coverage 0.1 3 0.3 Provide more value added services 0.05 4 0.2 Packages for Family and friends 0.04 3 0.12 Acquire 3G License 0.2 4 0.8 Threats Buyers can easily switch to other networks 0.1 3 0.3 High initial capital investment 0.12 4 0.48 Price wars among competitors 0.19 3 0.57 Competitors can easily follow 0.1 3 0.3 Total 1.0 3.27
  • 22. Analysis  Acquire 3G license and become one of the first companies with the technology.  Warid must try to expand its customer base so that the threat of competitors is also reduced.  Providing more value added services will help the company in retaining the newly acquired customers.
  • 23. Competitive Profile Matrix Critical Success Factors Warid Mobilink Telenor Ufone Weight Rating Weighted Score Rating Weighted Score Ratin g Weighted Score Rating Weighted Score Service Quality 0.15 4 0.6 3 0.45 3 0.45 3 0.45 Customer Loyalty 0.10 1 0.1 3 0.30 4 0.40 3 0.30 Human resource 0.10 2 0.2 4 0.40 3 0.30 3 0.30 Technological know-how and innovation 0.20 3 0.6 4 0.80 3 0.60 4 0.80 Pricing 0.06 2 0.12 2 0.12 2 0.12 4 0.24 Global Expansion 0.10 2 0.2 3 0.30 4 0.40 0 0 Market Share 0.12 2 0.24 4 0.48 3 0.36 3 0.36 Financial Position 0.08 2 0.16 3 0.24 3 0.24 3 0.24 After Sales Service 0.09 3 0.27 2 0.18 3 0.27 2 0.18 Total 1.00 2.49 3.27 3.14 2.87
  • 24. Competitive Analysis  Warid’s positioning in comparison to its competitors is weak.  The company should improve in the area of market share, global expansion, and also in the area of after sales services.  Customer Convenience should be the focused.
  • 25. Strengths Weaknesses  Roaming facilities  Personified packages  Better customer packages  Cooperative work groups  Appropriate value against price  Not prone to price wars  Very few marketing activities for the brand  Ambiguous brand identity  Unutilized technology  Poor firm infrastructure Strengths & Weaknesses
  • 26. Internal Factor Analysis Key External Factors Weight Rating Weighted score STRENGTHS Roaming facilities 0.10 3 0.30 Personified packages 0.08 3 0.24 Better customer packages 0.12 3 0.36 Cooperative work groups 0.10 4 0.4 Appropriate value against price 0.10 4 0.40 Not prone to price wars 0.05 4 0.20 WEAKNESSES Very few marketing activities for the brand 0.15 2 0.30 Ambiguous brand identity 0.08 2 0.16 Unutilized technology 0.12 3 0.36 Poor firm infrastructure 0.10 2 0.20 Total 1 2.92
  • 27. Internal Analysis Inbound Logistics • Catalogs Printing • Sim cards • Packages Operations • Roaming • Network Signals Outbound Logistics • Calls • Sms reservations Marketing and Sales • Promotion of packages • Personified packages Services • Query Handling • Corporate services for business clients
  • 28. Suggested Strategies  Warid should improve its firm infrastructure and make its presence felt in the market.  The company needs to create more reminder advertising so that people know of its presence and remember that it is also there to serve to their needs.  The company will gain more attention if it comes up with more personified packages because everyone today believes in exclusivity and thus Warid will end up having higher customer traffic.
  • 29. Generic Strategy Overall Cost Leadership Overall Differentiation Focused Cost Leadership Focused Differentiation • Warid Telecom Generic Strategy
  • 30. Generic Strategy  Warid is following a focused differentiation strategy.  Their packages like Zem and Glow are to differentiate the service from other competitors in the market. The reason they have a narrow audience is that they have not targeted the whole population.  Their focus is more on youth and even among youth, their focus is on A and B class of the economy which collectively forms a very small size of the entire population. Overall Cost Leadership Overall Differentiation Focused Cost Leadership Focused Differentiation •Warid Telecom Generic Strategy
  • 31. The Matching Stage
  • 32. The Matching Stage  TOWS Matrix Strenghts Weaknesses 1. Roaming facilities 1. Very few marketing activities for the brand 2. Personified packages 2. Ambiguous brand identity 3. Better customer packages 3. Unutilized technology 4. Cooperative work groups 4. Poor firm infrastructure 5. Appropriate value against price 6. Not prone to price wars Opportunities S-O Strategies W-O Strategies Expand customer base 1. Expand customer base by coming up with better customer packages. 1. Acquire 3G license to eliminate the weakness of unutilized technology Expand network coverage 2. Expand network coverage with the help of improved roaming facilities within the country and abroad. 2. Expand network coverage with the help of improved firm infrastructure Provide more value added services 3. Provide more value added services in the form of personified packages Packages for Family and friends Acquire 3G License
  • 33. The Matching Stage Threats S-T Strategies S-T Strategies Buyers can easily switch to other networks Play on the basis of quality services instead of prices so that competitors find it hard to imitate. Play on the basis of quality services instead of prices so that competitors find it hard to imitate. High initial capital investment Provide appropriate value against prices so that buyers do not switch frequently. Provide appropriate value against prices so that buyers do not switch frequently. Price wars among competitors Cooperative work groups can help them reduce on their fixed operating costs Cooperative work groups can help them reduce on their fixed operating costs Competitors can easily follow
  • 34. BCG Matrix  Warid can be placed in the quadrant of Question Mark
  • 35. The SPACE Matrix Internal Strategic Position Rating Internal Strategic Position Rating Financial Strength (FS) Return on investment Liquidity Working Capital Operating profit Risk involved in business 5 5 6 5 4 Environmental Stability (ES) Technological changes Price range of competing products Competitive pressure Inflation Barriers to entry Ease of exit from market -2 -1 -2 -2 -3 -2 -2 5 -2 Competitive Advantage (CA) Market Share Product Quality Customer Loyalty Technological updation Control over supplier and distributor -5 -5 -3 -3 -5 -3 Industry Strength (IS) Growth Potential Profit Potential Financial Stability Technological innovations Resource utilization Ease of entry into the market 6 6 6 5 5 2 -4 5
  • 36. The SPACE Matrix -6 -5 -4 -3 -2 -1 +0 +1 +2 +3 +4 +5 +6 -5 -4 -3 -2 -1 +0 +1 +2 +3 +4 +5 Defensive Competitive Conservative Aggressive
  • 37. The Internal-External (IE) Matrix The IFE Total Weighted Score Strong Average Weak 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99 High I II III 3.0 to 3.99 Warid Telecom Medium IV V VI The EFE Total Weighted Score 2.0 to 2.99 Low VII VIII 1.0 to 1.99
  • 38. Grand Strategy Matrix RAPID MARKET GROWTH Quadrant II Quadrant I Target WEAK COMPETITIVE STRONG POSITION COMPETITIVE POSITION Warid Telecom Quadrant III Quadrant IV SLOW MARKET GROWTH
  • 39. Blue Ocean Strategy •service errors •Physical visits to outlets •Virtual billing system through paypal or mastercard •Provide executional options through helpline only. •Value added services •value for money invested •Conventional system of recharge •Service centre or physical outlets Eliminate Raise ReduceCreate
  • 40. Strategy Implementation Resource Structure Culture High quality network to support latest technological advancements Well established technological structure should be present High teamwork among employees Most hi-tech infrastructure to accommodate 3G services De-centralized structure should be kept Very interactive culture exists with an open door policy Heavy financing will be required as introducing 3G services is very expensive High class business culture Good PR should be present to jump through loopholes and avoid extra taxes and licensing issues
  • 41. Decision Stage for Warid Telecom  QSPM Matrix QUANTITATIVE STRATEGIC PLANNING MATRIX FOR Warid Telecom Strategic Alternatives Critical Success Factors Weight Expanding Network Coverage Acquiring and Introducing 3G technology Strengths AS TAS AS TAS Roaming facilities 0.10 3.00 0.30 2.00 0.20 Personified packages 0.08 3.00 0.24 1.00 0.08 Better customer packages 0.12 4.00 0.48 1.00 0.12 Cooperative work groups 0.10 2.00 0.20 3.00 0.30 Appropriate value against price 0.10 1.00 0.10 3.00 0.30 Not prone to price wars 0.05 ---- ---- 2.00 0.10 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- Weaknesses Very few marketing activities for the brand 0.15 4.00 0.60 1.00 0.15 Ambiguous brand identity 0.08 4.00 0.32 2.00 0.16 Unutilized technology 0.12 ---- ---- 4.00 0.48 Poor firm infrastructure 0.10 1.00 0.10 3.00 0.30 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- SUBTOTAL 1.00 2.34 2.19 Critical Success Factors Weig ht Expanding Network Coverage Acquiring and Introducing 3G technology Opportunities AS TAS AS TAS Expand customer base 0.10 4.00 0.40 2.00 0.20 Expand network Coverage 0.00 4.00 ---- 3.00 ---- Provide more value added services 0.05 3.00 0.15 2.00 0.10 Packages for Family and friends 0.04 3.00 0.12 1.00 0.04 Acquire 3G License 0.20 ---- ---- 4.00 0.80 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- Threats Buyers can easily switch to other networks 0.10 3.00 0.30 3.00 0.30 High initial capital investment 0.12 ---- ---- 2.00 0.24 Price wars among competitors 0.19 3.00 0.57 2.00 0.38 Competitors can easily follow 0.10 2.00 0.20 4.00 0.40 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- 0.00 ---- ---- ---- ---- SUBTOTAL 0.90 1.74 2.46 SUM TOTAL ATTRACTIVENESS SCORE 4.08 4.65
  • 42. THANK YOU