Term Report on Warid Telecom for Strategic Management
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Term Report on Warid Telecom for Strategic Management

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    Term Report on Warid Telecom for Strategic Management Term Report on Warid Telecom for Strategic Management Document Transcript

    • Strategic Management – Term Report – Warid Telecom Submitted To: Sir ZarrarZubair Submitted By: Umair Khalid Paracha (13257) ZeeshanValliani (12543) S.M. Zeeshan (8779) Muhammad Kashif (11017) Muhammad Asim Hayat (11084) Semester: Summer 2013
    • 1 Contents 1. Letter of Transmittal .....................................................................................................................2 2. About Warid Telecom....................................................................................................................3 3. Business Definition and Scope ..................................................................................................4 Analysis of Warid’s Mission Statement...........................................................................................4 4. Telecom Industry Overview .......................................................................................................5 5. Macro Environmental Analysis ..................................................................................................6 Porter’s Five Forces ...........................................................................................................................6 PEST Analysis ..................................................................................................................................12 6. The Input Stage............................................................................................................................13 External Factor Analysis ................................................................................................................13 Suggested Strategies......................................................................................................................13 Competitive Profile Matrix.............................................................................................................14 Internal Analysis...............................................................................................................................15 Strengths and weaknesses.............................................................................................................17 Suggested Strategies ......................................................................................................................18 7. The Matching Stage.....................................................................................................................20 TOWS Matrix ......................................................................................................................................20 The SPACE Matrix.............................................................................................................................22 BCG Matrix..........................................................................................................................................25 The Internal-External (IE) Matrix.............................................................................................26 Grand Strategy Matrix....................................................................................................................27 Warid’s Company Specific Strategies...........................................................................................28 8. Decision Stage for Warid Telecom.........................................................................................29 QSPM Matrix.......................................................................................................................................29 9. Blue Ocean Strategy ...................................................................................................................31 10. Strategy Implementation......................................................................................................32
    • 2 1. Letter of Transmittal September 13th , 2013 Mr. ZarrarZubair Lecturer Sales Management Institute of Business Management Dear Sir, Presented is our term report on “Warid Telecom”. The project involved strategic analysisandresearch on the company and is prepared according to the guidelines provided during the semester. We would like to thank you for providing the guidelines & suggestions which enabled us to complete this report as our final project. We have worked vigorously on this project to bring you the accurate and reliable results. Sincerely, Umair Khalid Paracha (13257) Zeeshan Valliani (12543) S.M. Zeeshan (8779) Muhammad Kashif (11017) Muhammad Asim Hayat (11084)
    • 3 2. About Warid Telecom Warid Telecom is one of the cellular service providers in Pakistan launched in May 2005. The company is now 100% owned company of the Abu Dhabi Group and offers state-of-the-art telecommunication services at over 7,000 destinations in Pakistan. The company was formed as a joint venture between Abu Dhabi Group and Sing Tel where SingTel acquired 30% percent equity stake but later Abu Dhabi Group bought the remaining stakes in the company from Sing Tel. Many view the purchase of remaining stake as part of Abu Dhabi Group strategy to support Warid Telecom’s continued growth and enhance its market position. Board of Directors His Highness Sheikh Nahayan Mabarak Al Nahayan (Chairman/Director) Mr. Boulos ("Paul") H. B. Doany (Alternate Director for Sheikh Nahayan Mabarak Al Nahayan) Mr. Khurshid Hadi (Director) Mr. Michael Buchen (Director) Mr. Adeel Bajwa (Director) Mr. Jinah Haj Ali (Director) Mr. Muneer Farooqui (Director & Chief Executive Officer) Management Team Mr. Muneer Farooqui (Chief Executive Officer) Mr. Tariq Gulzar (Chief Financial Officer) Mr. Ali Raza Mehdi (VP Administration & Human Resources) Mr. Younas Iqbal Sheikh (Chief Commercial Officer) Mr. Muhammad Irfan Chaudry (Chief Technical Officer & Chief Information Officer) Mr. Suhail Jan (VP Sales & Distribution)
    • 4 3. Business Definition and Scope Mission and Purpose “We will continue to challenge ourselves and set new performance standards by investing in the future of our people and seeking knowledge and innovation in order to exceed customer expectations and serve our community” 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”. Warid Telecom started its operation in May 2005 from Pakistan. Warid Telecom International LLC, purchased a license for operating a nationwide mobile telephone network, (WLL) and long distance international (LDI) for $291 million US dollars. Within 80 days of launch Warid attracted more than 1 million users. Currently the network has around 15 million subscribers. In Warid’s business strategy core determinants include: Competitiveness: differentiated in value added aspects Rapid Response of company: when need is identified they respond to it Customer care by providing quality service: The pre-paid segment is branded and marketed as Zem Pre-Paid. Users enjoy various value added services (VAS), such as SMS, MMS, GPRS, 64K SIM and a host of other features. Analysis of Warid’s Mission Statement Determinan t Customer s Product s and Service Market s Technolog y Survival Growth and Profitabilit y Self Concep t Concer n for Public Image Philosoph y Concern for Employee s       
    • 5 4. Telecom Industry Overview Mobilink was the first to enter the telecom sector in Pakistan. It was in early 1990s that the telecom sector got attention of end consumers. At that time also, people were not aware of all those value added services or the benefits of carrying a cellular network. Telecom sector has been expanding with every passing year. The subscriber base has also increased from 5.02 million to 114 million people. This shows the exponential growth of the sector. However, the revenues from each customer have drastically decreased due to the price wars in the sector. 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 If we start to observe this chart of subscribers only, then we can very clearly see that the growth is not linear but exponential but Warid seem to go through a down turn. Warid’s subscriber base has recently shrinked to approximately 12.5 million from almost 18 million 3 years back.
    • 6 5. Macro Environmental Analysis Porter’s Five Forces 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
    • 7 The threat of new entrants is low because the industry is reaching a saturation point and the cost of entering the industry is also very high in terms of setting up the poles for signals in each area. The coverage is not easily obtained and that is where the entrance as well as survival in the industry becomes difficult for every player. They can make use of this positive element by expanding their coverage and customer base. *1*2 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 The bargaining power of buyers is moderate. There are both positive and negative aspects of this factor. The reason for this moderate power is that there are two types of buyers for this particular industry. One buyer is the end user of the network and another buyer is the retail stores that carry the Sim cards and the recharge vouchers. Here, the threat that it may pose is that if companies are unable to judge the threshold of expanding into the markets, then they will
    • 8 end up even reducing their own power over their buyers. *1 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 The bargaining power of suppliers is on the lower side. The suppliers do not have the ability to threaten the company because there are abundant suppliers in the industry and also, the supplies are commodities instead of differentiated products. There are many retail outlets available for the company to expand into. *2 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. 
    • 9 Your customer has no real substitute.  Your customer is not likely to substitute.  2 1 1 The threat of substitutes is also low because there are no many real substitutes to make the task for a company difficult. The substitutes are in the form of PTCL, Go CDMA or other such communication providers. But they lack the ability to mobilize their services and therefore the threat of substitutes remains low. 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 The rivalry against competition is tough. The reason which is leading to this situation is the fact that there are fewer players in the industry. The total number of players in the industry is less
    • 10 than 10 however; the market size is big in comparison to that. A company can reduce this threat by offering more value added services so that there is some differentiation element created. The threat here is that the competitors are also big in size and can simply follow what one companydoes to differentiate itself. *3*4
    • 11 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 The industry is overall moderate in terms of its attractiveness on the basis of its overall score on all external factors.
    • 12 PEST Analysis Political factors Political factors include government regulations and legal issues and define both formal and informal under which the firm must operate. Some examples include: Tax policy Employment laws Environmental regulations Trade restrictions Political stability The political factor makes the Telecom Industry unattractive in Pakistan because of the political instability issues and also the security conditions are not stable. Therefore 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.*2 Economic Factors Economic factors affect the purchasing power of potential customers and the firm’s cost of capital. The economic factor has made the Pakistani Telecom industry unattractive as it has led to a decrease in the purchasing cost of the end consumer as well as the companies negatively. The companies can only progress if they tend to reduce the overall prices. The effect of these reduced prices directly affects the profitability of all companies. Their profit margins are cut down and they can only survive if they stop to go for those price wars among themselves.*3 Social Factors Since social lives have become virtual these days. We tend to send text messages or call each other instead of going for a hang out. This is why this factor is in favour of the telecom industry. The company can cash this element by coming up with packages like groups of friends and family etc.*4 Technological Factors Technological factors include R & D activity, Automation, Technological incentives, and Rate of technological change. The technological factor has made the Telecom Industry very competitive as this is one crucial factor for any company in the sector of telecom. Since profits are mostly generated through economies of scale, therefore in order to achieve that objective latest state of the art technology has to be implemented to gain a competitive edge. That technology is currently available in the form of 3G license which Warid tends to obtain from PTA.*5
    • 13 6. The Input Stage Opportunities Threats Expand customer base Buyers can easily switch to other networks Expand network coverage High initial capital investment Provide more value added services Price wars among competitors Packages for Family and friends Competitors can easily follow Acquire 3G License 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 Suggested Strategies For the current situation, the suggested strategies for Warid include;
    • 14 Acquire 3G license so that as soon as the technology becomes operable in Pakistan, then Warid would be the first one to serve its customers with that technology and this will further enhance the quality of their services and customer care. Warid must try to expand its customer base so that the threat of competitors is also reduced and the company does not have much to fear about. For doing so, the company can come up with packages for new connections to attract more traffic of people. Providing more value added services will help the company in retaining the newly acquired customers. Competitive Profile Matrix Critical SuccessFactors Warid Mobilink Telenor Ufone Weight Rating Weighted Score Rating Weighted Score Rating 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 From the above matrix, it is obvious that 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. These steps can be taken if the company focuses more on its service centre and franchisee so that each customer who enters their service centre, does not
    • 15 come out with an unsolved problem. Internal Analysis Primary Activities Inbound Logistics The inbound logistics for Warid involve sim cards, designing packages, and printing handbooks or catalogs for packages. Operations The operations of Warid involve consistently manufacturing attractive packages for customers. It also involves designing roaming facilities and handling them so that the end user does not come across any problems. *1 Outbound Logistics The outbound logistics constitute of timely delivery of services to the consumers. The customers successfully make calls and communicate with others through the network. 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
    • 16 Marketing and Sales The marketing and sales consists of the company’s promotional activities. Warid has not been aggressively marketing as compared to other telecom players in the market. *1 The company’s marketing and sales further includes personified packages for its consumers. *2 Services Their services include providing call centre facilities, timely response to the queries, and also value added services. This helps the company maintain certain differentiation from its competitors that they are able to cater to their consumers in due time. They also come across a fewer number of customer complaints.*3 Despite all of these possible elements, Warid has not been successful in creating a strong differentiating element for the brand. The brand is still not clearly defined to its customers.*2 Support Activities Procurement Procurement mainly revolves around obtaining material for the packaging of the sims to shape them into the final deliverable condition. Their procurement does not have anything special or unique to offer in comparison to any other cellular network provider. Human Resource Management The human resource of the organization is very strong. The company encourages people to work in groups and those groups work in a decentralized manner. Their approach is very pragmatic.*4 Technological Development Warid is trying to utilize state of the art technologies to stay ahead of time. They are recently also trying to acquire 3G technology so that they can serve their customers in the best way. But apart from their recent efforts to acquire 3G technology, they do not presently have any such system which can help them differentiate in any way.*3
    • 17 Firm Infrastructure The firm infrastructure is poorly managed. Despite having great human asset, they have not been able to use that human asset in managing their firm infrastructure. At present, Warid has a big customer base, but their customer base has been going down because they are not establishing their infrastructure in a strong way.*4 Core Competencies of Warid Warid core competency is their ability to operate on lower operating costs. They have been able to reduce their operational costs. But that cost cutting has not been passed on to the end users. Yet, they have wisely maintained to remain competitive in terms of their prices and packages.*5 Another element which differentiates Warid from its competition is that Warid is the only company which is least affected due to these price wars. All other companies have been reacting to each others’ strategies regarding price wars and price cuts.*6 Strengths and weaknesses Strengths Weaknesses Roaming facilities Very few marketing activities for the brand Personified packages Ambiguous brand identity Better customer packages Unutilized technology Cooperative work groups Poor firm infrastructure Appropriate value against price Not prone to price wars
    • 18 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 The company’s overall position with respect to its strengths and weaknesses is average. The score indicates that the company has enough margins to improve in many areas in which it currently is giving a moderate performance. Suggested Strategies At this stage, the suggested strategy is to focus more on building upon the strengths rather than paying attention to the weaknesses. The action plan to do so involves introducing more personified packages so that customers feel exclusive and valued. In order to reduce the impact of weaknesses, Warid can and must improve its firm infrastructure
    • 19 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. Response (Strengths) With respect to this action plan, the strength will pay off my being highlighted. 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. Response (Weaknesses) The weakness will wear off if the firm makes an effort for establishing and improving on what is already built. The already established firm infrastructure can also be improved with just a little effort from the human resource and also by involving some financial resources to plan and implement it. The company can actually afford to invest on its improvement due to their efficient operations and lower costs. The profit margins for the company are also higher than its competitors because of not being highly involved in price cuts. Generic Strategy Warid is following a focused differentiation strategy. Their focus is on creating a difference in their services. Their packages like Zem and Glow are to differentiate the service from other competitors in the market. They also have cost effectiveness but their focus is more on differentiation with respect to their core products and services. 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
    • 20 7. The Matching Stage TOWS Matrix Strengths 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 1. 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 2. 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 3. Provide more value added services 3. Provide more value added services in the form of personified packages 4. Packages for Family and friends 5. Acquire 3G License Threats S-T Strategies W-T Strategies 1. Buyers can easily switch to other 1. Play on the basis of quality services instead of prices so that 1. The company must try to clarify the brand identity to reduce the threat from
    • 21 networks competitors find it hard to imitate. rivals 2. High initial capital investment 2. Provide appropriate value against prices so that buyers do not switch frequently. 2. Warid must increase their marketing activities so that the buyers have reasons to believe and do not leave the company. 3. Price wars among competitors 3. Cooperative work groups can help them reduce on their fixed operating costs 4. Competitors can easily follow
    • 22 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
    • 23 SPACE Quadrant Conservative FS Aggressive CA IS Defensive ES Competitive Aggressive Quadrant This means that an organization is in an excellent position to use its internal strengths to: 1. Take advantage of external opportunities 2. Overcome internal weaknesses -6 -5 -4 -3 -2 -1 +0 +1 +2 +3 +4 +5 +6 -5 -4 -3 -2 -1 +0 +1 +2 +3 +4 +5
    • 24 3. Avoid external threats Strategies for SPACE Quadrant Following Strategies are available to a company falling in the aggressive quadrant. 1. Backward, Forward, horizontal integration 2. Market penetration 3. Market development 4. Product development 5. Diversification Company Specific Strategies In Warid’s case, the company can go for market penetration through expanding its network coverage and expanding its customer base. This will require the company to widen the scope of its own target audience and formulate its messages in such a way that they cater to a wider audience. The company must go for product development with the help of 3G technology which is the hot topic in the industry. Warid can gain substantial attention from every corner if it acts as the pioneer in serving its consumers with 3G technology.
    • 25 BCG Matrix Warid’s Position on the BCG Matrix If we begin to consider Warid as a product in the telecom sector and the remaining competitors as other products, then Warid can be placed in the quadrant of Question Mark. At this stage, it depends upon the company to decide whether it would want to grow or close down. At this stage, looking at the entire industry, Warid has more options to expand and grow as there are many underutilized resources and various open opportunities in the market to grab.
    • 26 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 IX 1.0 to 1.99 Analysis The analysis of Internal External Matrix suggests that warid must grow and build at this stage. They can grow and build by expanding into untapped segments and covering the uncovered areas of the market as well. This means they must widen the scope of their target market and try to cater to more people and more economic classes of people.
    • 27 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 Analysis Warid’s current position does not have much to offer but there are opportunities available in the market to benefit from. Strategies for third quadrant include: 1. Retrenchment 2. Concentric diversification 3. Horizontal diversification 4. Conglomerate diversification 5. Divestiture
    • 28 6. Liquidation Warid’s Company Specific Strategies Warid can apply the strategy of diversifying into related areas. Warid can come up with internet facilities in order to expand its market coverage as well as customer base. It will give more options to the end consumers to choose from as well. Concentric diversification on the level of partnerships with other smaller groups offering related services can also lead to growth opportunities for Warid.
    • 29 8. Decision Stage for Warid Telecom QSPM Matrix QUANTITATIVE STRATEGIC PLANNING MATRIX FOR Warid Telecom Strategic Alternatives Critical Success Factors Weigh t 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
    • 30 Critical Success Factors Weigh t 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 QSPM Strategy to be Implemented On the basis of the total attractiveness scores for both the alternates, Warid should go for acquiring 3G technology so that it can overcome its weakness of unutilized technology as well
    • 31 and serve its present and potential customers in a better way. 9. Blue Ocean Strategy The ERRC Grid This is one of the unorthodox models for a cellular company which is currently not used by any other company. This model can help them bring clarity to their ambiguous brand identity and also help them in expanding their customer base which is crucial for the company at this stage of weak competitive position and low market growth. Until now, no one seems to be eliminating the hassle of physical visits to the company franchise which really troubles almost all the consumers. Another element which is not yet thought about by any other company is of virtual billing system. People still need to buy those scratch cards to recharge their accounts. They can instead use their PayPal accounts to recharge their accounts. This will also eliminate the time constraint which was there in the scratch card system. People cannot buy scratch cards if shops are closed. On that element, cellular companies also lose huge revenues and business. •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
    • 32 10. Strategy Implementation This is the phase where most of the firms go wrong. Despite doing so much of homework and struggle in coming up with the right action plan and set of activities, this is the phase, which ruins it all for many companies. 9 out of ten companies fail in strategy implementation. There are three determinants which require to be given proper attention for the selected action plan to reap the desired results. 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