Business Strategy Development in Zain Group: A Case Study

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@ 2016 AYAT A. SALEH, submitted as a part of the 'Business Strategy and Strategic
Management' course in the University of Warwick, United Kingdom
Business Strategy Development in Zain Group: A Case Study
A company's failure is not necessary attributed to a bad management. Instead, it is
related to the absence of a management system that articulates a business strategy,
implements it, and finally evaluates that effectiveness of it (Norton & Robert 2008).
Strategic management is viewed as three stages and defined as "the art and science
of formulating, implementing and evaluating cross-functional decisions that enable an
organization to achieve its objectives" (David 2013, p.35).
The overall purpose of this case study is to evaluate the above three stages in Zain
Group. Zain is the Arabic translation for the word 'Good' or 'Wonderful'. Zain Group
is a major player in the telecommunication industry for more than 30 years across the
Middle East and North Africa (MENA) (Zain Company 2014). The detailed
framework for this case study is shown in figure 1.
Figure 1 Framework for the Case Study

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1. Telecommunication Industry in MENA Region
The British author, C. S. Lewis, once said "isn't it funny how day by day, nothing
changes, but when you look back, everything is different?" our life is changing
radically due to the revolution of science and technology. In fact, the
telecommunication industry has been one of the most growing sectors in the last ten
years, and is expected to grow further in the next five years (Ernst & Young 2015,
p.7). This dynamic environment includes many players interacting together to bring
continuously innovation solutions for the end users. Examples for these players are
shown in figure 2.
Figure 2 Telecommunication Sectors' Major Players
(Source: Ernst & Young 2015, p.16)
This diversity shapes the attractiveness of this market which will be examined here
using Porter Five- Force Model. Porter Five- Forces Model is a tool used to reveal
the competitiveness of an industry by analysing five forces, namely: "threats of new
entry, buyers power, suppliers power, threats of substitutes and competitive rivalry"
(David 2013, p.105).
Table 1 shows a summarized Porter Five Force Analysis and the detailed one is
available in Appendix A.

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Table 1 Porter's Five Forces Analysis for the Telecommunication Industry
Threats of New
Entry
Buyers Power Suppliers Power
Threats of
Substitutes
Competitive
Rivalry
Low High Moderate High High
(Source: please refer to Appendix A)
The scope of this case study is the MENA region where Zain Group operates. In
order to understand the external factors in this region, PESTEL analysis will be used.
PESTEL is a tool used to understand the external environment and how it affects the
organization in terms of the political, economic, sociological, technological, ecological
and legal) (Campbell & Craig 2005, p.501). A summarized PESTEL analysis is
shown in table 2 and the detailed one is available in Appendix B.
Table 2 PESTEL Analysis for the Telecommunication Industry
Political Economical
 Political conflict and unstable situations in
different parts in the MENA region
especially Iraq and Sudan.
 Low economic growth in MEAN region.
 High unemployment rate in the
telecommunication-related jobs.
 Fluctuating currency exchange rate.
Sociological Technological
 Growing number of youth.
 Changes in customers habits due to the
use of new technology.
 Increase in the number of refugees.
 Declining customers' confidence level in
certain topics such as data privacy and
security.
 Growing sector with new technology
advancement every day.
 MENA region got low ranking in the
global innovation indicators.
Ecological Legal
 MENA reign is water-stressed area.
 Increase the awareness about the
importance of adapting energy efficiency
practices and reducing the CO2
emissions.
 Telecommunication sector is well-
regulated one with too many local
regulations varying from one country to
another.
 Lack of uncertainty.
(Source: please refer to Appendix B)

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As a conclusion, the telecommunication industry is a highly competitive environment
with different alternative products and services, combined with a high pressure from
the end users. Operating in the MENA region with all the external factors that were
addressed in the previous PESTEL analysis creates more challenges for any
company in that sector.
The next section will analyse the strategic management in one of these companies;
Zain Group.
2. Zain Group: A Wonderful Journey
The strong commitment to reap every singly opportunity, supported by a diverse
leadership team and a passion to create a "wonderful digital life", Zain has
succeeded in building a solid name as a telecommunication provider in MENA region
(Zain Company 2014, p.8).
2.1 History
Initially, the company was founded in Kuwait in 1983 as Mobile Telecommunications
Company (MTC). Ten years later, it was the first telecom operator to introduce the
commercial Global System for Mobiles (GSM) service in the Middle East in 1994
(Zain Company 2014, p.28). In 2007, MTC was rebranded into Zain. The journey
from Kuwait to eight countries in MENA region incorporated different strategies.
Normally, one of the strategies an organization can use to increase their profits and
expand their business is by performing integrative growth; backward integration,
forward integration and horizontal integration such as merge and alliance (M&A)
(Kotler & Keller 2012, p.43).
Zain Group adapted horizontal integration strategy where they managed several
successful acquisitions and mergers in the region such as:
 Full acquisition for Fastlink in Jordan and Madacom in Madagascar.
 Partial acquisition for V-mobile in Nigeria and Westel in Ghana.
 Merged with MTC Atheer and Iraqna and rebranded them to Zain
In addition, they acquired and then sold Africa BV "Zain Africa" to Bharti Airtel Limited
in 2010 to have more focus on the MENA region.

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In essence, the M&A strategy is considered as one of the main expansion options in
the telecommunication sector (Ernst & Young 2015, p.14). Table 3 summarizes the
current group's subsidiaries and associates.
Table 2 Zain Groups' Subsidiaries and Associates
(Source: Zain Company 2014, p.82)
2.2 Core Competences
In a journey of 30 years, Zain Groups sustained a strong market position due to
different core competences. The core competency is a concept that was introduced
by Prahalad and Hamel to describe the collective skills, knowledge and capacities in
an organization that it used to create its products and services and deliver value to
customers (Prahalad & Hamel 1990; Dole 2013). The core competencies of Zain
Group are shown in figure 3.

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Figure 1 Zain Groups' Core Competencies
(Source: please refer to SWOT Analysis in Appendix E)
2.3 Key Competences
According to the analysis provided in section 1, the telecommunication sector in
MENA region is a very competitive and challenging one. A key difficulty comes from
the competitive rivalry in this market. Despite of all the challenges, Zain Group
managed to sustain a strong market share in most of its markets as shown in table 4.
Table 3 Zain Group's Key Competitors
Country Company and
Market Share
Competitor and Market
Share
Competitor and
Market Share
Kuwait 33% Viva 35% Zain 32% Ooredoo
Iraq 39% Asiacell 42% Zain 19% Korek
Sudan 31% MTN 42% Zain 27% Sudani
Jordan 31% Orange 40% Zain 29% Umniah
Saudi Arabia 45% STC 17% Zain 38% Mobiley
Lebanon 47% Alfa 53% Touch*
(Source: adapted from Zain Company 2014, pp.28–44)
The complete group's profile is shown in Appendix C.
After this overview about Zain's journey, the next section will start the evaluation
process of the three stages of strategic management; formulation, implementation
and evaluation.

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3. Zain Group: Strategy Formulation
Serving more than 44 million customers and maintaining a strong market share is not
an easy job. How could Zain do that for 30 years? The answer is quite short; they
have envisioned a future and work on it. The purpose of this section is to provide an
understanding for the business strategy formulation in Zain Group.
3.1 Mission
Zain Group formulated a mission statement to provide a direction for the future as
shown in figure 4.
Figure 1 Zain Groups' Mission Statement
3.2 Strategic Commitments
Next to that mission, Zain formulated a strategy statement which is "transformation of
Zain into innovative, integrated telecommunications company serving consumers and
enterprises with a rich digital lifestyle experience" (Zain Company 2014, p.47). This
includes sustaining the current core business in terms of mobile voice and mobile
data services, and also fostering their presence in the enterprise and digital space.
In order to achieve that, Zain identified 6 transformational initiatives as shown in
figure 5.
Figure 2 Zain Groups' Strategic Transformational Initiatives

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Zain translated the mission and this strategy into five major commitments which are
illustrated in figure 6.
Figure 3 Zain Groups' Commitments
(Source: adapted from Zain Group website, available on the WWW at:
http://www.zain.com/en/social-responsibility/our-commitments/ [Last accessed 21st
Feb, 2016])
3.3 Strategic Position: Ansoff's Matrix
What growth strategies Zain has adapted in the last 30 years? Ansoff's matrix, which
is a model used to generate alternative product-growth strategies for the company
based on two dimensions, will be used to answer that question. Ansoff's matrix
shows four growth alternatives based on 'market growth' and 'product growth'. The

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result could be one of four options; "market penetration", "market development",
"product development" and "diversification" (Pleshko & Heiens 2008).
Zain Company grew by multiple acquisitions across MENA region. In addition, they
managed to adapt the four Ansoff’s growth strategies during the last 30 years as
shown in figure 7. The detailed Ansoff’s matrix is in Appendix D.
Service Growth
MarketGrowth
Existing Service New Service
ExistingMarket
Market Penetration
 Providing basic services
(message, voice, and
pre-paid) to eight
countries
Product Development
 High speed mobile internet,
and mobile data and
broadband in the eight
countries
 3G service in Jordan in 2003
 4G LTE service in MEAN
region in 2014
NewMarket
Market Development
 Operating in 15 African
countries in 2005
Diversification
 Enterprise mobility solutions
such as; M2M, Direct Billing
Operators and Cloud Solutions
Figure 4 Zain Groups' Ansoff's Matrix
(Source: please refer to Appendix D)
3.4 SWOT Analysis
The final tool that will be used to understand stagey formulation in Zain is SWOT
analysis. SWOT analysis is a tool used to understand the internal strengths and
weakness of an organization, at the same time, understanding the external threats
and opportunities that could affect that organization (Dyson 2004). A summarized
SWOT analysis for Zain Group is shown in table 5 and the detailed one is available in
Appendix E.

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Table 5 SWOT Analysis for Zain Group
Strength Weaknesses
 Strong and reliable network.
 Strong brand name.
 Leader in bringing new technology and
innovation to MENA market.
 Highly capable and skilled team.
 Weak financial performance.
 Decrease in the number of customers.
 Lack of key performance indicators
related to innovation.
 Increase in the financial risk as shown
in the increase in the Gearing Ratio.
Opportunities Threats
 Growing market in Saudi Arabia, Bahrain,
Kuwait and Jordan.
 Positive trends in the demand of digital
services.
 Increase in youth percentage in MENA
region.
 Increase in the popularity of LTE services in
Kuwait and Saudi Arabia.
 Fluctuation in the local currency
exchange rate.
 Changes to local regulations related to
SIM cards and active customers'
registration.
 Declining in customers' confidence in
telecom companies due to changes to
data privacy regulations.
 Changes in the competition forms due
to the rapid increase in OTT and
MVNOs.
(Source: please refer to Appendix E)
This SWOT analysis will be used later to generate Internal Factors Evaluation (IFE)
and External Factors Evaluation (EFE) in order to construct Internal- External (IE)
Matrix in strategy evaluation.
After discussing the strategy formulation in Zain group, the next section will address
the second stage of strategy development which is strategy implementation.
4. Zain Group: Strategy Implementation
Business Strategy implementation in Zain Group will be examined by reviewing the
products and services that Zain provides, the human resources and the last financial
results in 2014.

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4.1 Products and Services' Portfolio
Zain works continuously to fulfill its goal, ''towards a wonderful digital world'', by
providing a wide products and services portfolio as shown in figure 8.
Figure 1 Zain Group's Products and Services Portfolio
(Source: adapted from Zain Company 2014, p.55)
4.2 Human Resources
Zain Group has continuously been selected as "Employer of Choice" in the countries
where it operates (Zain Company 2011, p.40). This comes as the fruit of their
leadership team and the careful human resources (HR) procedures that they
adapted. In fact, the HR strategic goals were designed to support the overall group's
strategic (Zain Company 2014, p.84). The four HR pillars are shown in figure 9.

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Figure 2 Zain Groups' Human Resources' Pillars
The company has a board of directors and board committees as the following (Zain
Company 2014, p.65):
 "Corporate Governance Committee";
 "Audit Committee";
 "Executive Committee";
 "Legal Committee"; and
 "Investment Committee".
4.3 Financial Results
Zain plays a key role in all the communities they operate in, yet, on the financial side,
the company did not achieve a strong financial performance as shown in the
numbers in table 6. The external factors that were addressed in PESTEL analysis in
table 2 impacted the group negatively, especially when it comes to the economic
factors (i.e. the fluctuating local currency exchange rate) and the legal one (i.e.
changes in the way that the number of active customers in calculated) (Zain
Company 2014, p.8).
As a result, the key financial performance indicators were lower than 2013. In
addition to that, two financial ratios which are important to reflect the financial

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structure and the profitability of the company were not good. Firstly, the Gearing
Ratio which is a financial structure ratio represents how much a company's funds are
coming from borrowings (Walker 2009, p.191), and secondly, ROCE (Return on
Capital Investment) which is a profitability ratio reflects how much the company is
capable to generate profit as a percentage of the capital that it employed (Walker
2009, p.154).
Unfortunately, Zain did not manage to reduce its Gearing Ratio which means its
financial risk increased, and did not manage to increase ROCE ratio which means it
was not successful in managing their capital employed efficiently.
Table 1 Final Year 2014 Key Performance Indicators
CommentsFinal Year 2014Performance Indicator
4% reduction Year on Year44.3 million by end of 2014Total Managed Active Customers
2% down from 2013USD 4.3 BillionConsolidated Revenues
6% down from 2013USD 1.8 BillionConsolidated EBITDA*
41.8%EBITDA Margin
10% down from 2013USD 685 MillionConsolidated Net Income
12% down from 2013USD 0.18EPS**
17.6% higher than 201320%Gearing Ratio
7.5% down from 201314.97%ROCE ***
* EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization
** EPS: Earnings Per Share
*** ROCE: Retune on Capital Employed
(Source: adapted from Zain Company 2014, p.102 and the calculations for Gearing
Ratio and ROCE are shown in Appendix C)
The detailed products and services portfolio, executive management team, financial
results and the performance per country are available in Appendix C.
In conclusion, this section aimed at exploring how Zain translated its strategy into
products and services using different resources. In the next section, two tools will be

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used to evaluate these strategies and provide recommendations for future
adjustment.
5. Zain Group: Strategy Evaluation
The final step of strategic management process is evaluating the outcomes versus
the strategies that were initially formulated, and then act on the difference. The
evaluation process will take place using Internal- External (IE) Matrix as shown
below.
Internal- External (IE) Matrix
IE Matrix is a tool that was developed by General Electric Company and is used to
position the organization in a nine- cell grid based on two dimensions; the total IFE
weighted scores on the x-axis and the total EFE total weighted scores on the y-axis.
As a result, three alternative strategies are identified which are: "grow and build",
"hold and maintain" and finally "harvest or divest" (David 2013, p.216).
IE matrix for Zain Group is shown in figure 10 and the detailed calculations are
shown in Appendix F.
Figure 1 Zain Groups' IE Matrix
(Source: please refer to Appendix F)

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Zain got 3.5 in the IEF and 2.75 in the EEF, accordingly it has the below options for
future strategies:
 "Backward, forward or horizontal integration"
 "Market penetration"
 "Market development"
 "Product development"
The final results and conclusion will be formulated in the next section.
6. Conclusion and Recommendations
The purpose of this case study was to explore the strategic management in Zain
Group. As shown in the previous discussion, the strategic position is affected by
different internal and external factors. The final recommendations that can Zain
company implements to for the future are summarized in TWOS matrix.
TWOS is a tool used to improve the internal weaknesses by using the external
opportunities, avoid the external threats by using the internal strengths, reduce
weaknesses by avoiding the external threats and finally using the internal strength to
grab the external opportunities (David 2013, p.206).
Zain Group TWOS matrix is shown in figure 11 and the detailed one is available in
Appendix G.
As a final recommendation to improve this research, the quality of the input data
could be enhanced by combing the literature reviewed about Zain Group with other
data collection tools, e.g. interview senior managers from the company, questioners
or even group interviews. Adapting that approach will give more insights about the
company's strategic thinking and future directions (Biggam 2011, p.83).

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SO Strategies WO Strategies
 Act a hub to develop the ITC
capabilities in job seekers since the
market lacks these skills.
 Acquire more companies especially in
stable markets.
 Seek partnerships with other telecom
companies and enter related societies
in order to be part of a larger
framework. This will help in sharing
knowledge and gaining a larger power
especially when they want to negotiate
for new legislations for example.
 Task force a dedicated team to
investigate the decrease in number of
customers.
 Develop performance indicators to
measure innovation and bench mark
against other companies in the same
filed.
 Follow the recommended strategy as
per IE matrix which was "Grow and
Build". Zain has four options: here:
Backward, forward or horizontal
integration. Market penetration, Market
development and finally Product
development
ST Strategies WT Strategies
 Seek legal support to identity the
potential trends related to new
legalisation.
 Utilize their strong brand to promote
concepts such as customers’ data
privacy.
 Develop partnership with OTT to gain
the benefits from the new trends.
 Seek financial support to cover the
financial risks associated with currency
fluctuation.
Figure 1 Zain TOWS Matrix
(Source: please refer to Appendix G)

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References
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Handbook 2nd ed., Maidenhead: Open University Press.
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Advantage Approach 14th ed., Harlow: Pearson.
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http://www.zain.com/media/images/resumes/Zain_PWC_Report_2014.pdf.

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Appendix A- Telecommunication Industry: Porter Five Forces Analysis
Table A.1 shows Porter Five-Forces analysis for the telecommunication industry. The
rationales behind these results are illustrated below.
Table 0.1 Porter's Five Forces Analysis for the Telecommunication Industry
Threats of New
Entry
Buyers Power Suppliers Power
Threats of
Substitutes
Competitive
Rivalry
Low High Moderate High High
First Force: Threats of New Entry
Telecommunication industry is very expensive due to the need for high capital
investment in networks, cables, servers, software or even the license fees which vary
between countries (Ernst & Young 2015, p.7). In addition to that, there are high
operational expense for upgrading and maintaining those equipment (Zain Company
2014, p.16). Accordingly, the threat of new entry to this market is low.
Second Force: Buyers Power
The basic services that are provided by telecommunication companies are almost the
same (messages, voice and data). Adding to that, the switching cost is usually low. A
report by Ernest & Young in 2014 analysed the top 10 risks in this industry. One of
them is the "failure to understand what customers value" because they are always
looking for more innovative solutions (Ernst & Young 2014, p.23). This risk increases
the buyers power so according to Porter's Five Forces model, it is high.
Third Force: Suppliers Power
A company in telecommunication sector such as Zain Group deals with a big number
of suppliers for software, servers, equipment, cables … etc. There are a lot of
vendors for such items, however one of the top 10 risks in this industry as identified
by Ernst & Young Company is that telecommunication companies should have more
agility when dealing with their customers, partners and suppliers and to provide new
channels when dealing with them (Ernst & Young 2014, p.17). Accordingly, the
suppliers' power here is moderate.
Fourth Force: Threats of Substitutes
There are multiple players in the telecommunication sector such as cable companies,
TV and satellite operators, web developers to name but a few. Those players could
create substitute services especially for the non- traditional services that the

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telecommunication companies usually provide (such as short messages and voice)
(Ernst & Young 2015, p.13). As a result, the threat of substitute in this industry is
high.
Fifth Force: Competitive Rivalry
Telecommunication sector is very competitive one either from traditional
telecommunication companies or even from the "disruptive competitors" such as
mobile application developers. In addition to that, the local regulations usually
creates a competitive atmosphere to prevent the monopoly that could ruin the market
(Zain Company 2014, p.44). As a result, the competitive rivalry is high.

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Appendix B- Telecommunication Industry: PESTEL Analysis
Telecommunication Industry: PESTEL Analysis
Table B.1 shows PESTEL analysis for the telecommunication industry and the details
explanations are shown below.
Table B.1 PESTEL Analysis for the Telecommunication Industry
Political Economical
 Political conflict and unstable situations in
different parts in the MENA region
especially Iraq and Sudan.
 Low economic growth in MEAN region.
 High unemployment rate in the
telecommunication-related jobs.
 Fluctuating currency exchange rate.
Sociological Technological
 Growing number of youth.
 Changes in customers habits due to the
use of new technology.
 Increase in the number of refugees.
 Declining customers' confidence level in
certain topics such as data privacy and
security.
 Growing sector with new technology
advancement every day.
 MENA region got low ranking in the
global innovation indicators.
Ecological Legal
 MENA reign is water-stressed area.
 Increase the awareness about the
importance of adapting energy efficiency
practices and reducing the CO2
emissions.
 Telecommunication sector is well-
regulated one with too many local
regulations varying from one country to
another.
 Lack of uncertainty.
First: Political
MENA region is not a political stable area. Different civil wars and political conflicts in
different countries where Zain operates such as Iraq and Sudan (Zain Company
2014, pp.8–9).
Second: Economical
MEAN region achieved 4% as economic growth rate between 2000 and 2009 which
is very far from the developing countries in the same period (7.2%) as per Word Bank
statistics (Zain Company 2016, p.4).

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There is a gap between the required skills and competencies needed for the
telecommunication industries versus the ones that are available in the job market.
This creates a burden and high unemployment rate in the MENA region in general
The currency exchange rate in MENA region is fluctuating due to the unstable
political situation (Zain Company 2014, p.9).
Third: Sociological
Growing number in youth where 63% of the population is in the working age (Zain
Company 2016, p.4).
The new technology changed the way people do their daily transactions when using
smart phones such as using the mobile payment applications (Zain Company 2014,
p.15).
The political unrest creates many refugees across MEAN region especially in Syria,
Iraq, Palestine and Sudan. This situation creates burden for the host countries as
well as for their original countries (Zain Company 2014, p.14).
Customers' trust level is declining due to different changes in the privacy regulations
as imposed by the regulators (Ernst & Young 2014, p.15).
Fourth: Technological
The telecommunication sector is entitled with growing technological advancement
every day such as the use of smart devices and the mobile applications (Zain
Company 2014, p.8).
Most countries in MEAN region got low marks in the global innovation indicators. This
reflects the differences between MENA region and the developing countries in terms
of: the low spending for research and development (R&D) in these areas, the low
quality of education in telecommunication fields provided in most MENA region and
the local regulations that could promote the entrepreneurship spirit in the region (Zain
Company 2016, p.5).

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Fifth: Ecological
Some countries in the MENA region are one of the most water-scarce in the world.
This creates high desertification and reduction in the agricultural crops. In addition to
that, this affected the income of framers and the availability of many corps and food
There is an increase in the environmental awareness in the world which creates
pressure to reduce the CO2 emissions from the industry, and to adapt more energy
efficient practices in day to day operations (Zain Company 2016, p.53).
Sixth: Legal
The telecommunication industry is an intense one where there are a lot of
regulations. The below ones are expected to be changed within 2-3 years (Ernst &
Young 2015, p.17):
 "Spectrum release and auction frameworks";
 "Data privacy and retention";
 "Net neutrality";
 "Wholesale access pricing"; and
 "Mobile roaming and termination rates".
In addition to that, there is lack of uncertainty in terms of the regulations in some
market which affected some of the acquisition contracts (Ernst & Young 2015, p.13).
Examples for such changes in regulations were (Zain Company 2014, p.14):
 Change in the way the active customers are calculated in Iraq.
 Change in the Subscriber Identity Module (SIM) card registration policy in
Sudan.

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Appendix C- Zain Group: Company's Profile
Zain Group is a market leader in the telecommunication industry in MENA region.
The main aspects of the group are summarized as the following (Zain Company
2014, p.11):
 More than 7000 employees.
 USD 1.8 Billion in EBITDA.
 USD 4.3 Billion in Revenues.
 815 TB of Daily Data Usage.
 47 Million Daily Total SMS.
Moreover, it is the largest 4G LET Network provide in different parts of the region (in
Saudi Arabia, Kuwait, Bahrain and Lebanon).
First: Key Milestones
Table 0.1 Zain Group's Key Milestones
Year Event
1983  Established Mobile Telecommunications Company (MTC) in Kuwait
1999  Zain was the first to introduce prepaid services*
2003  Acquired Fastlink in Jordan
 Awarded 2nd GSM license in Bahrain
 Awarded GSM license in Iraq
 The first operators to launch 3G*
2004  Awarded management agreement in Lebanon
2005  Acquired Celtel in 13 African nations
 Acquired Madacom in Madagascar
2006  Acquired the remaining 61% of Mobitel in Sudan
 Acquired 65% of V-mobile in Nigeria
 Launched One Network, "the first ever-borderless mobile network in
the world, allowing customers to move freely across geographic
borders without incurring expensive international roaming call
surcharges" *.

25
Table 0.1 Zain Group's Key Milestones
Year Event
2007  Won bid for 3rd GSM license in KSA
 Rebranded to Zain in 4 markets
 Acquired a 15-year nationwide license in Iraq
 Acquired 75% of Westel Ghana
 Acquired Iraqna in Iraq
2008  Merged MTC Atheer and Iraqna, and rebranded to Zain
 Rebranded from Celtel to Zain in all African operations
 Commenced operations in KSA
 Commenced operations in Ghana
2009  Invested in 15.5% of Moroccan operator Inwi
 Launched Zap, "one of the most comprehensive mobile banking
services in Africa, which led to the award of the Best Mobile Money for
the Unbanked Service to Zain by the GSM Association in 2010" *.
2010  Sold mobile operations in 15 African countries (excluding Sudan and
Morocco) to Bharti Airtel for $10.7 billion
2011  Separated operations between Sudan and South Sudan
 The first operators to launch 4G LTE in the region, offering
unparalleled high-speed Internet access*
2012  Zain KSA raised $1.6 billion in rights issue and Group increased stake
in the operation to 37%
 Increased stake in Zain Iraq to 76%
2013  Zain celebrates its 30th Anniversary
 Zain joined a GCC telecoms consortium – Middle East- Europe
Terrestrial System (MEETS) – "to build a pan-regional high-bandwidth
transmission cable system for the region" *.
2014  Listed Zain Bahrain on Bahrain Bourse
Source: (Zain Company 2014, p.12)
* (Zain Company & PWC Company 2014, pp.9–10)

26
Second: Human Resource
Table 0.2 Zain Group's Executive Management Team
Name Position Name Position
Board of Directors
Mr. Asa'ad Al Banwan
Chairman
Chairman Mr. Abdul Aziz Al
Nafisi
Board Member
Mr. Bader Nasser Al-
Kharafi
Vice Chairman Ms. Shaikha Khaled
Al Bahar
Board Member
Mr. Abdul Mohsen Al Faris Board Member Mr. Jamal Shaker Al
Kazemi
Board Member
Mr. Jamal Al Kandary Board Member Mr. Waleed Abdullah
Mishary Al Roudan
Board Member
Executive Management
Mr. Scott Gegenheimer Chief Executive
Officer of Zain Group
Mr. Venkatesh
Jandhyala
Chief Internal
Auditor of Zain
Group
Mr. Ossama Matta Chief Financial
Mr. Henri Kassab Managing
Director,
International,
Wholesale &
Roaming of Zain
Group
Mr. Emre Gurkan Chief Strategy &
Business
Development Officer
of Zain Group
Mr. Adlai Shalabi Head of Legal of
Zain Group
Mr. Hisham Allam Chief Technology
Mr. Omar Al Omar Senior Advisor to
Zain Group CEO
Mr. Mohammad Abdal Chief
Communications
Mr. Wael Ghanayem Advisor to the
Zain Iraq Board
Mr. Duncan Howard Chief Commercial
Abdul Ghaffar
Setareh
Chief Risk
Officer Of Zain
Group
Middle East and North Africa Management

27
Table 0.2 Zain Group's Executive Management Team
Name Position Name Position
Mrs. Eaman Al Roudhan Chief Executive
Officer of Zain
Kuwait
Mr. Ahmad Al
Hanandeh
Chief Executive
Officer of Zain
Jordan
Mr. Elfatih M. Erwa Chief Executive
Officer & MD of Zain
Sudan
Mr. Mohammed
Zainalabedin
General
Manager of Zain
Bahrain
Mr. Mohammed Al
Charchafchi
Chairman and Chief
Executive Officer of
Zain Iraq
Mr. Basel Manasrah Chief Executive
Officer of Zain
South Sudan
Mr. Hassan Kabbani Chief Executive
Officer of Zain Saudi
Arabia
Mr. Peter
Kaliaropoulos
CEO of Zain in
Lebanon & Vice-
Chairman and
GM of 'touch'
Lebanon
(Source: Zain Group website, available on the WWW at:
http://www.zain.com/en/about-us/zain-management/ [Last accessed 21st
Feb, 2016])
Third: Products and Services Portfolios
Below are the main products and services that Zain Group provides (Zain Company
2014, pp.55, 56)
1- Voice and messages.
2- High speed mobile- internet.
3- Mobile data and mobile broadband.
4- WI-FI roaming and enterprise solutions.
5- Direct operator billing through the partnership with SLA Mobile. The benefit of
this partnership is to "enable Zain’s customers to pay for digital goods from a
third-party content or service provider by charging the transaction to their
mobile phone monthly bill or using their prepaid credit".
6- Mobile commerce such as the "partnership with eServGlobal, [where] Zain
[will] to offer life-enhancing Mobile Financial Services and solidify its position
as an innovative market leader in the mobile money arena across its
footprint".
7- M2M initiatives (Machine to Machine) which "connects ‘things’ to the Internet,
transforming them into intelligent devices that exchange real-time information

28
and opens up a range of possibilities on how businesses are run, how lives
are enhanced, and how customers are satisfied".
8- Cloud Solutions where "Zain Group announced the launch of ‘Microsoft Office
365’ services in the Kingdom of Saudi Arabia, which was a first in the GCC.
The offering is a software service providing cutting-edge productivity
applications and communication services to Enterprises and SMEs, enabling
them to enhance productivity, increase efficiency, and reduce costs".
Fourth: Financial Results
Table C.3 below shows detailed financial ratios for ROCE (return on Capital
Employed) and Gearing Ratio where (Walker 2009, p.154,191):
ROCE (Return on capital employed) = Operating Profit / Capital Employed
Gearing Ratio = Capital Employed / Net Debt
Table 0.3 Zain Groups' Key Finanicla Results
In Thousands Kuwait Dinar 2014 2013
Total borrowings 788,261 755,721
Less: Cash and bank balances (343,570) (399,242)
Net debt 444,691 356,479
Total equity 1,793,969 1,763,202
Total capital 2,238,660 2,119,681
Gearing Ratio 20% 17%
Operating profit 335,066 343,255
Return on Capital Employed (ROCE) 14.97% 16.19%
(Source: adapted from Zain Company 2014, p.70,102)
Fourth: Performance per Country
Four key performance indicators are analysed per each country as shown in figure
C.1. The performance indicators are (Zain Company 2014, p.55):
 Number of customers per country;
 Revenues per country;
 EBDTA per country;
 Net Income per country

29
@ 2016 AYAT A. SALEH, submitted as a part of the 'Business Strategy and Strategic Management' course in the University of Warwick, United
Kingdom
Figure 0.1 Zain Groups' Performance per Each Country
(Source: adapted from Zain Company 2014, p.55)

30
Appendix D- Zain Group: Ansoff's Matrix
Zain managed to grow according to the below table and analysis (Zain Company
2014, p.12) and (Zain Company & PWC Company 2014, pp.9–10):
Table 0.1 Zain Group Ansoff's Matrix
Service Growth
MarketGrowth
Existing Service New Service
ExistingMarket
Market Penetration
 Providing basic services
(message, voice, and pre-
paid) to eight countries
Product Development
 High speed mobile internet,
and mobile data and
broadband in the eight
countries
 3G service in Jordan in 2003
 4G LTE service in MEAN
region in 2014
NewMarket
Market Development
 Operating in 15 African
countries in 2005
Diversification
 Enterprise mobility solutions
such as; M2M, Direct Billing
Operators and Cloud
Solutions
1- As a Market Development strategy, Zain Company started in Kuwait in 1983
and then they managed to develop new markets where they introduced the
same set of products and services (messages, voice and pre-paid services) in
Jordan in 2003, Lebanon in 2004, Sudan in 2006, Iraq in 2007, Saudi Arabia
in 2008 and Bahrain in 2014.
2- Zain started to introduce new products and services in the eight markets
sequentially as a Product Development strategy. For example: high speed
mobile internet, and mobile data and broadband. In addition to that, they
started 3G in Jordan in 2003, 4G LTE in 2011 to be the first in the region and
mobile e-commerce in 2014.

31
3- As a Market Developed strategy, Zain acquired Celtel in 15 African nations
and acquired Madacom in Madagascar in 2005, in addition they acquired
75% of Westel Ghana in 2007. Later they old Africa part in 2010.
4- As a Diversification strategy, Zain recently lunched new products and
services targeting the enterprise segment such as M2M, Direct Billing
Operators, Cloud Solutions.
Appendix E- Zain Group: SWOT Analysis
Table E.1 shows a summarised SWOT analysis for Zain group and the details are
illustrated below.
Table 0.1 SWOT Analysis for Zain Group
Strength Weaknesses
 Lack of key performance indicators
related to innovation.
 Increase the financial risk as shown in
the increase in the Gearing Ratio.
Opportunities Threats
 Growing market in Saudi Arabia, Bahrain,
Kuwait and Jordan.
 Positive trends in the demand of digital
services.
 Increase in youth percentage in MENA
region.
 Increase in the popularity of LTE services in
Kuwait and Saudi Arabia
 Fluctuating local currency exchange
rate.
 Changes to local regulations related to
SIM cards and active customers'
registration.
 Declining in customers' confidence in
telecom companies due to changes to
 Changes in the competition forms due
to the rapid increase in OTT and
MVNOs.
Strengths
Zain has a strong and reliable network due to its commitment to adapt high
technology and services and continuously upgrading and expanding its network. In
addition to that, it invests in new infrastructure every year, for example: 17% of

32
revenues in 2014 were invested in innovation and new services (Zain Company
2014, p.8). As a result, Zain received different rewards as "Best Customer Provider"
in Saudi Arabia , Kuwait and Jordan several times (Zain Company 2014, p.21). Zain
also created Zain Digital Frontier and Innovation (ZDFI) business unit to support its
innovation agenda (Zain Company 2014, p.16).
Zain has a strong brand name where they served 44.3 million customers by end of
2014. Its brand valuation was more than USD 1 Billion according to "Brand Finance"
(Zain Company 2014, pp.8, 48).
Zain has strong strategic partnership with key technological companies, e.g. Apple,
Samsung, Microsoft and SAP. That helped them to be the leader in bringing new
technological solutions in MENA market (Zain Company & PWC Company 2014,
p.10).
Zain has a strong CSR agenda that covers all the countries in MENA region (Zain
Company 2014, p.10).
Zain is well- known for being an "Employer of Choice" for which it developed a four-
pillar HR strategy. The four pillars are: "efficiency", "customer centric", "right talent"
and "community" (Zain Company 2014, p.48). As a result, Zain has a strong and
capable team.
Weaknesses
Zain was impacted negatively by the different political and economic factors in MENA
region. Financial results in 2014 were lower than 2013 (2% decrease in revenues,
6% decrease in EBIDTA and 10% decrease in Net Income) (Zain Company 2014,
p.8).
Another weakness is related to the lack of key performance indicators to reflect the
innovation that they do. For example: one key performance indicator might be
"Innovation Products as a Percentage of Revenues" (Ernst & Young 2014, p.21).
In addition to that, there was a decrease in the number of customers for the last two
years. One reason is related to changes in regulations, but also Zain has to further
investigate the other reasons (Zain Company 2014, p.8).

33
Finally, Gearing Ratio was increased which means the financial risks of getting the
funds from borrowing rather than form equity was increased (Zain Company 2014,
p.102).
Opportunities
There is a positive growing market trend in Saudi Arabia, Kuwait, Bahrain and Jordan
(Zain Company 2014, p.8,9,10). The expected market growth rate is projected to be
between 35% to 40% (Zain Company 2014, p.44).
In addition to that, there is increase in the demand for digital services in all fields
(Zain Company 2014, p.16). Services such as wirelesses broad band, smart phones
and tablets are expected to increase by 69% (Zain Company 2014, p.54). Positively,
there is an increase in the number of people who use their smart phones for online
payment. This creates more opportunities in the telecom industry (Zain Company
2014, p.51).
There is an increase in the number of youth in MEAN region. Some statistics
revealed that 63% are already in the working age (Zain Company 2016, p.4).
Finally, there is positive trends in the popularity of LTE (Long Term Evolution)
services in Saudi Arabia and Kuwait (Zain Company 2014, p.8).
Threats
The fluctuation in the local currency exchange rate is a major threat for Zain where it
is already impacted by that negatively in 2014. The cost for that was 88 million USD
especially in Iraq and Sudan (Zain Company 2014, p.9).
Another major threat comes from the changes that may happen to the legal
regulations. For example; the method that is used to calculate the number of active
customers was changed in Iraq, resulted in decreasing the number of customers by
end of 2014. In another example, Sudan changed the policy related to SIM card
registration. Both examples resulted in removing 3 million customers from Zain's data
base (Zain Company 2014, p.14).

34
Some countries keep changing their regulations in terms of data privacy and sharing
customers' information. As a result, there is a decline in customers' confidence in the
telecommunication companies (Ernst & Young 2014, p.15).
Finally, there is a continuous threat from new competitors such as OTT (Over the
Top) players like Facebook, Viber, WhatsApp and MNVOS (Mobile Virtual Network
Operator) (Zain Company & PWC Company 2014, p.10).

35
Appendix F- Zain Group: Internal- External (IE) Matrix
IE Matrix will be constructed using Internal Environmental Factors (IEF) and External
Environmental Factors (EEF) (David 2013, p.216).
First: Internal Environmental Factors
The weight is a number used to reflect the relative importance of the factor for the
firm's success and it is a number from 0 (not important) to 1 (very important) (David
2013, p.125). The rating is a number that reflects the strength of the factors as the
following (David 2013, p.125):
1: Weakness
2: Minor weakness
3: Minor strength
4: Major strength
Table 0.1 IEF Matrix for Zain Group
No. Weight Rating Weighted
Score
Strengths
1 Strong and reliable network. 0.3 4 1.2
2 Strong brand name. 0.1 4 0.4
3 Leader in bringing new technology and
0.05 3 0.15
4 Highly capable and skilled team. 0.1 3 0.3
Weaknesses
5 Weak financial performance. 0.2 4 0.8
6 Decrease in the number of customers. 0.05 2 0.1
7 Lack of key performance indicators related to
innovation.
0.05 2 0.1
8 Increase the financial risk as shown in the
increase in the Gearing Ratio.
0.15 3 0.45
Total 1.0 3.5
Second: External Environmental Factors (EEF)
Again, the weight here is used to reflect the relative importance of the factor for the
firm's success and it is a number from 0 (not important) to 1 (very important) (David
2013, p.111).

36
The rate is a number between 1 and 4 that reflects how effectively the company is
responding to that factor as the following (David 2013, p.111):
4: Response is superior
3: Response is above average
2: Response is average
1: Response is poor
Table 0.2 EEF Matrix for Zain Group
No. Weight Rating Weighted
Score
Opportunities
1 Growing market in Saudi Arabia, Bahrain,
Kuwait and Jordan.
0.15 4 0.6
2 Positive trends in the demand of digital
services.
0.1 4 0.4
3 Increase in youth percentage in MENA region. 0.05 2 0.1
4 Increase in the popularity of LTE services in
Kuwait and Saudi Arabia
0.1 3 0.3
Threats
5 Fluctuating local currency exchange rate. 0.25 3 0.75
6 Changes to local regulations related to SMI
cards and active customers' registration.
0.20 2 0.4
7 Declining in customers' confidence in telecom
companies due to changes to data privacy
regulations.
0.05 2 0.1
8 Changes in the competition forms due to the
rapid increase in OTT and MVNOs.
0.1 1 0.1
Total 1.0 2.75
Note: The numbers here are given based on the best judgement of the writer
however in real business life, the number should be based on a more accurate data
collection tools

37
Third: IE Matrix
The total weighted score in the IEF is placed on the x-axis and the total weighted
score in the EEF is placed on the y-axis (David 2013, p.218).
The result is Zain lies in the Grow and Build region. It has the below options:
 "Backward, forward or horizontal integration"
 "Market penetration"
 "Market development"
 "Product development"
Figure 0.1 Zain Groups' IE Matrix
(Source: adapted from David 2013, p.217)

38
Kingdom
Appendix G- Zain Group: TWOS Matrix
Table 4.3.1 Zain TOWS Matrix
Strengths Weaknesses
 Lack of key performance indicators related
to innovation.
 Increase the financial risk as shown in the
Opportunities SO Strategies WO Strategies
 Growing market in Saudi
Arabia, Bahrain, Kuwait and
Jordan.
 Positive trends in the
demand of digital services.
 Increase in youth
percentage in MENA region.
 Increase in the popularity of
LTE services in Kuwait and
Saudi Arabia
 Act a hub to develop the ITC capabilities in
job seekers since the market lacks these
skills.
 Acquire more companies especially in
stable markets.
 Seek partnerships with other telecom
companies and enter related societies in
order to be part of a larger framework. This
will help in sharing knowledge and gaining a
larger power especially when they want to
negotiate for new legislations for example.
 Task force a dedicated team to investigate
the decrease in number of customers.
 Develop performance indicators to
measure Innovation and bench mark
against other companies in the same filed.
 Follow the recommended strategy as per
IE matrix which was "Grow and Build". Zain
has four options: here: Backward, forward
or horizontal integration. Market
penetration, Market development and
finally Product development

39
Kingdom
Table 4.3.1 Zain TOWS Matrix
Strengths Weaknesses
 Lack of key performance indicators related
to innovation.
 Increase the financial risk as shown in the
Threats ST Strategies WT Strategies
 Fluctuation in the local
currency exchange rate.
 Changes to local regulations
related to SMI cards and active
customers' registration.
 Declining in customers'
confidence in telecom
companies due to changes to
 Changes in the competition
forms due to the rapid increase
in OTT and MVNOs.
 Seek legal support to identity the potential
trends related to new legalisation.
 Utilize their strong brand to promote
concepts such as customers’ data privacy.
 Develop partnership with OTT to gain the
benefits from the new trends.
 Seek financial support to cover the
financial risks associated with currency
fluctuation.

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