Strategic Management - Ufone Project

S T R A T E G I C M A N A G E M E N T MGT 603

FINAL PROJECT MC070400829 NOORUDDIN TEACHER: M SHAFIQ

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ACKNOWLEDGEMENT

As a student of course.strategic management – MGT 603 and all the preaching and guidance of my course teacher Mr. M. Shafiq. I hereby present my final project as required on firm operating in Pakistan Pakistan belonging belonging to telecom sector sector.. i.e Ufone one of the leading cellular service provider alongwith value added service and business strategies.

I also hereby present all the facts and figures which I gather about Ufone from newspapers, websites and from Ufone’s annual report. Due to my job and other secular activities I couldn’t be able to approach the firm directly, however with the help of my friends those close to Ufone. I prepared prepared this project project for consideration consideration of approval approval of my learning learning and understanding understanding about the said subject.

MC070400829 Signature







EXECUTIVE SUMMARY

Ufone (official name: PTML) is a PTCL company, PTML (Ufone) - a wholly-owned subsidiary has improved its financial performance commenced its operations on 29th January 2001 as a GSM 900 service provider. Since the outset, it has expanded its coverage and customer base at a rapid pace and established itself as one of the leading cellular service providers in Pakistan.

During During the last last year year Ufone Ufone succes successfu sfully lly complete completed d the launchi launching ng of sites sites under under Phase Phase V in existing as well as new cities and towns by investing more than US$ 525 million. This has increased the asset base of Ufone from rupees 20 billion to 27 billion. To further enhance the subscriber base and strategically position the company in the growing telecom market, Ufone has finalized a network expansion for Phase VI contract amounting to about US$ 170 Million. Ufone currently, currently, has network coverage in more than 4,745 locations throughout the country coun try..

Ufone's Ufone's operationa operationall perform performance ance has been very encouragin encouraging g despite despite stiff competition in Pakistan telecom market which has led to reduction of prices to bare minimum level. Ufone managed to improve its revenue and after tax profit by 87% and 54% respectively, as compared to the last year through aggressive policies and exercising exercising strict control over expenses.







TABLE OF CONTENTS

Introduction………………………………………………..1.0 Details of Project……………………… Project……………………………..1.1 ……..1.1 Purpose of Project……………………………1.2 Findings……………………………………………………2.0 External & Internal Analysis……………….2.1 Analysis……………….2.1 SWOT Analysis…………………………….2.3 EFE Matrix…………………………………2.4 Matrix…………………………………2.4 IFE Matrix…………………………………2.5 Matrix…………………………………2.5 Nine – Cell Diagram…………………….2.6 Diagram…………………….2.6 BCG Matrix………………………………2.8 Matrix………………………………2.8 Details of Product Product …….2.8.1 BCG Matrix……………2.8.2 QSPM…………………………………….2.9 Conclusion……………………………………………….3.0 Recommendation………………………………………4.0 References………………………………………………5.0







1.0

INTRODUCTION

1.1 DETAILS OF THE PROJECT Ufone Ufone is a Cellular Cellular Service Provider Provider founded in 2001 It is also a subsidia subsidiary ry firm of PTCL As of 2008, Ufone employs more than 1,730 people. It manufactures it’s the GSM company providing services to all four continents continents urban urban and rural areas., areas., As of 2008, 2008, Ufone is the second largest largest telecommunica telecommunication tion company in Pakistan. In recent years the company has endured significant improvement in services to almost 4,745 locations throughout the country.

The major competitors of Ufone are domestic companies like

MOBILIINK Paki Pa kissta tan n Mo Mobi bille

Com ommu muni nica cati tion onss Li Limi mitted ed,,

bett be tter er kn know own n

as Mo Mobi bili link nk GSM SM,,

is

a

telecommunication service provider in Pakistan. According to PT PTA A statistics, Mobilink has 30.88 million customers by January 2008. Mobilink's Head office is located in Kulsum Plaza, Blue Area, Islamabad TELENOR (OSE: E: TEL TEL,, NAS NASDAQ DAQ:: TEL TELN) N) is the inc incumb umbent ent tel teleco ecommu mmunica nicatio tions ns com company pany in Telenor (OS

Norway, with headquarters located at Fornebu, close to Oslo. Today, Telenor is mostly an intern int ernati ationa onall wir wirele eless ss car carrie rierr wit with h oper operati ations ons in Scan Scandin dinavi avia, a, Eas Easter tern n Eur Europe ope and Asia. In addition, it has extensive broadband and TV distribution operations in four Nordic Countries. PAKTEL/ CHINA MOBILE/CMPAK Paktel was the first ever company granted license to carry out cellular phone services in

Pakistan, set up by Cable & Wireless. It carried out AMPS services until 2004, when the company comp any launched launched GSM services services as wel well. l. Its main comp competi etitor tor emerged emerged in lat latee 1990 1990ss as Instaphone and soon began to dominate the market. On 4th May 2007, Paktel was renamed to CMPak. And then, on 16th May 2007, China Mobile announced that it had upped its stake in







WARID Warid Telecom Telecom International is an Abu Dhabi based mobile telecommunication firm providing

telephony services in Bangladesh, Pakistan and Uganda. ZONG Zong is the first International brand of China Mobile being launched in Pakistan. It is meant to

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

1.1 PURPOSE OF THE PROJECT

The purpose of this this project is to enhance enhance the ability of understanding the important factors, matrix, strategy of business. And And also to encourage to know more about the telecommunication telecommunication sector in Pakistan.

Ufone is one of my favorite cellular company. I have being using Ufone since 2004. Over the past few years Ufone developed dynamically. Ufone is the purpose of my project and my communication medium in life.









2.0 FINDINGS

2.1 INTERNAL & EXTERNAL ANALYSIS ANALYSIS

INTERNAL ENVIORNMENT Human Resource Management Marketing Department Commercial Department Sales Department Finance Department Payroll Department Information Technology Department Engineering Department Administration Auditing Department Customer Care

EXTERNAL ENVIORNMENT Economic Conditions Social Conditions Culture Demographics Environmental Competitive Technological







2.3 SWOT ANALYSIS

Strengths 1. Second Large Market Share Alth Althou ough gh Ufon Ufones es mark market et shar sharee has has drop droppe ped d due due to curr curren entt econ econom omic ic and and poli politi tica call circumstancesit but is still very much competitive at 20 percent.

2. Worldwide Cheap call Experience As explained above even with Ufone’s recent decline they still have the market share and the experience to bounce back. They have been a nationwide company for nearly ten years now and have established themselves as the national leader for most of them. 3. Variety of Value Added Service Provide variites of value added services as co mpared to other cellular networks 4. Representing 4. Representing PTCL name As it is the subsidiary of PTCL.

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

Weaknesses 1. Behind on Excessive Demand Thiis is Ufone Th fone's 's bigg bigges estt weak weakne nesss is not not attempting to meet the demands







Opportunities 1. Can target Corporate It is obvious that GM was behind its competition with regards to the research and development of hybri hybrid d vehi vehicl cles es.. Howe Howeve verr hybr hybrid id tech technol nology ogy is stil stilll very very much much new new givi giving ng GM the the opportunity to once again become the automotive industry's leader in innovation and technology. 2. Continuing to Expand Globally. Ufone have the ability to expand globally. But due to current economic condition con dition all its operation are on halt 3. Publicity and Marketing With the right marketing strategy they can acquire much more. 4. Develop New Value Added Service This is an opportunity that will never be satisfied, meaning that Ufone should always be attempting to keep improvising new valued added services, and as we know, what is in today will be out ou t tomorrow. tomorrow.

Threats 1. Govt. Interference Govt. Interference Interference will always be treated as a threat in terms of taxes. 2. PTCL cellular license Ufone is nothing just a cellular license to PTCL. PTCL should provide more financial support to enhance profitability of its subsidiary company. 3. Pension Payouts. Part of this threat is their own doing and the other is simply unavoidable. Ufone is responsible







2.4 EXTERN 2.4 EXTERNAL AL FACTOR EVALUATION EVALUATION

KEY EXTERNAL FACTOR

OPPORTUNITIES 1. Can target Corporate

Weight .20

Rating 4

w.score .80

2. Continuing to Expand Globally.

.20

4

.80

3. Publicity and Marketing

.05

3

.15

4. Develop New Value Added Service

.10

3

.30

THREAT 1. Govt. Interference

.10

2

.20

2. PTCL cellular license

.05

2

.10

3. Pension Payouts.

.15

2

.30

4. Increased Health Care Costs

.15

2

.30

1.00

2.95







2.5 INTERNAL INTERN AL FACTOR EV E VALUATION KEY INTERNAL FACTOR INTERNAL STRENGTH Human Resource Management - Staff Rem Remun uneeration - Staf Stafff Per Perssonal onal Fina Financ ncee Marketing Department - Marketing Pl Planning - Prices Commercial Department - Promotion - Advertisement Sales Department - Target Market - Skilled Staff Finance Department - Earning Pe Per Sh Share - Royalties Payroll Department - Staff Sa Salaries - Staff Bonuses Information Technology Department - Hardware - Network - Operations Engineering Department - Tier ier 3 leve levell engi engine neer erss - Highly skilled Administration - Day to day exp expenses - Correspondance Auditing Department

Weight .10

Rating 4

w.score .40

.05

4

.20

.10

4

.20

.15

3

.15

.05

3

.15

.05

3

.15

.05

3

.15

.05

3

.15

.05

3

.15









2.6 Nine – Cell Diagram

THE IFE WEIGHTED SCORE 4.0

3.0

2.0

1.0







Human Resource Management - Sta Staff Re Remuner neration - Staf Stafff Per Perso sona nall Fin Finan ance ce Marketing Department - Marketing Pl Planning - Prices Commercial Department - Promotion - Advertisement Auditing Department - Financial Lookup - Cost an and Managem gement Can target Corporate Continuing to Expand 3.0 Globally -

Sales Department - Target Market - Skilled Staff Finance Department - Earning Pe Per Share - Royalties Payroll Department







2.8 BCG

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

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







2.9 QSPM

Weight

Strategy. 1

KEY EXTERNAL FACTOR Human Resource Management Marketing Department Commercial Department Sales Department Finance Department Payroll Department Information Technology Department Engineering Department Administration Auditing Department Customer Care

.15 .15 .10 .15 .05 .05 .05 .05 .05 .05 .15

.60 .60 .20 .15 .15 .15 .15 .15 .15 .20 .15

KEY EXTERNAL FACTOR Economic Conditions Social Conditions Culture Demographics

.20 .20 .05 .10

.80 .80 .20 .40

Strategy. 2

Strategy. 3







Suggested Strategies

1. Market Development 2. Market Penetration 3. Product Development 4. Restructuring 5. Retrenchment 6. Liquidation

5.0 References •

Pakistan Telecommunication Website

•

PTCL Annual Report

•

Ufone Website

•

Friends

•

Teachers Handout, Han dout,

Strategic Management - Ufone Project

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