Table of Contents INTRODUCTION.................... INTRODUCTION ........................................ ....................................... ....................................... ........................................ ........................ .... ....2 STRATEGY STRA TEGY FORMULATION FORMULATION...........................................................................................4 ...........................................................................................4 VISION.................. VISION ...................................... ........................................ ........................................ ........................................ ............................... ...................4 ........4 MISSION................... MISSION ....................................... ........................................ ........................................ ........................................ .................................. .............. ..4 VALUES.................... VALUES ........................................ ........................................ ....................................... ....................................... ...................... ................5 .......... ......5 EXTERNAL ENVIRONMENT.......................................................................................5 ENVIRONMENT .......................................................................................5 INTERNAL ENVIRONMENT........................................................................................7 ENVIRONMENT ........................................................................................7 LONG TERM OBJECTIVES.................. OBJECTIVES ...................................... ........................................ ....................................... ............................... .............7 .7 STRATEGIES.................... STRATEGIES ........................................ ....................................... ....................................... ......................................... ..............................9 .........9 STRATEGY IMPLEMENTATION................... IMPLEMENTATION....................................... ........................................ ........................................ ......................... ......10 .10 OBJECTIVES...........................................................................................................10 OBJECTIVES ...........................................................................................................10 POLICIES................... POLICIES ....................................... ........................................ ....................................... ....................................... ........................ .... ..........10 A STRATEGY SUPPORTIVE CULTURE.......................................................................11 CULTURE .......................................................................11 HUMAN RESOURCE STRATEGIES............................................................................13 STRATEGIES ............................................................................13 DIVERSITY.................... DIVERSITY ........................................ ....................................... ....................................... ........................................ ............................... ........... 15 STRATEGY EVALUATION................... EVALUATION ....................................... ........................................ ....................................... ................................. ...............16 .16
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INTRODUCTION Telen Telenor or Pakistan, akistan, a wholly wholly owned subsidiary of Telenor elenor ASA, launched launched its operations in March 2005. One of the leading telecom operators providing prepaid, postpaid and value-added services to seven million customers, it is spread across the country with a network of 15 company-owned sales and service centers, more than 200 franchisees and some 100,000 retail outlets selling subscriptions and refills. Differentiated Differentiated packages include TalkShawk, TalkShawk, Telenor Persona and Djuice.
Telenor took a big step seven years ago when it decided to expand in international markets. The key take points include: right time, targeting of emer emergi ging ng mark market ets, s, poli policy cy of full full manag anagem emen entt cont contrrol (avo (avoid ided ed join jointt ventures) and deployment of a repeatable methodology (for example the djuice brand). The success of the strategic focus can be understood from the following1:
1
http://telecompk.net/2008/12/30/telenor-emerging-market-strategy-success-swot/
2 | Page
Telenor Telenor believes: “What matters most is the right strategy, at the right time and
precision in execution.”
STRATEGY FORMULATION 3 | Page
VISION2
MISSION3 Tel Teleno enor's r's primar primary y goal goal is to creat create e great greater er value value for our share sharehol holder ders, s, We exist to help our customers get the full benefit of customers, employees and partners, and for society in general. We strive to communications communicatio ns services in their daily lives. be a driving force in creating, simplifying and introducing communication and content solutions to the marketplace.
VALUES4
EXTERNAL ENVIRONMENT
SEGMENTATION Market
Toda
Feature Year
Segment
y
Estimate
25%
27%
Youth/ Students 2
http://www.telenor.com.pk/about/visionValues.php
3
http://creativez.blogster.com/mission-statements-different
4
http://www.telenor.com.pk/about/visionValues.php
4 | Page
Exis Ex isti ting ng Pr Prod oduc uctt
Prof Pr ofit itab abii lity
Djuice, TalkShawk
29%
Women
10%
20%
TalkShawk
21%
Financially
40%
23%
TalkShawk, Telenor
20%
Constraint Corporate/ SME
Azadi 25%
30%
Postpaid Packages
30%
CPM CPM Critical Success Factor Advertisin g Product Quality Price Competiti on Managem ent Financial Position Customer Loyalty Global Expansion Market Share Total
Weight
Mobilink Rating Score
Warid Rating Score
Ufone Rating Score
Zong Rating Score
0.1
2
0.2
2
0.2
3
0 .3
3
0.3
0.15
2
0.3
2
0.3
3
0.45
3
0.45
0.1
3
0.3
2
0.2
3
0 .3
3
0.3
0.1
3
0.3
2
0.2
4
0 .4
3
0.3
0.1
4
0.4
2
0.2
3
0 .3
2
0.2
0.15
2
0.3
2
0.3
3
0.45
2
0.3
0.1
3
0.3
2
0.2
1
0 .1
3
0.3
0.2
4
0.8
2
0.4
3
0 .6
2
0.4
1.0
2.90
2.00
2.90
2.55
The intense competition in the telecom industry has made it really difficult to surviv survive e the financ financial ial crunch crunch has added added to the diffic difficult ulties ies of the teleco telecom m service providers. The most important factors in that need to be considered while making a strategic plan are customer loyalty which generally is based on the quality of the service provided and this determines the market share of the firm. Advertising is a double edge sword; good promotion attracts the custom customer er while while bad one dis distr tract acts s them. them. In telec telecom om indust industry ry a common common 5 | Page
practice is to eat competitor’s market share by indulging into price wars but one must must set a limit limit otherwis otherwise e it could could backfi backfire re and sunk sunk the company company.. Company needs to plan all its operations depending on its financial health never ever pick up industry giants for one on one fight and avoid taking leverage position instead go for the cost cutting strategy. strategy. By looking at the matrix it is evident that Mobilink and Ufone are at the front while while Warid arid is laggin lagging g behind behind in compet competiti ition. on. On the other other hand hand Zong’s Zong’s performance is average in industry.
INTERNAL ENVIRONMENT
LONG TERM OBJECTIVES 1. To deliver increased profitable growth Telenor Telenor seeks to increase core mobile revenues. revenues. Telenor is also a lso investing in adjacent markets such as basic financial services and machine-to-machine (M2M) communication.
2. To strengthen our performance culture Telenor will continue the successful practice of combining a local approach with with global global exper expertis tise. e. This This means means that that the local local manage manageme ment nt teams teams will will build a unique performance culture based on their own initiatives and in line with the Telenor governance model, Codes of Conduct, vision and values and peop people le poli policy cy.. In term terms s of Heal Health th,, Safe Safety ty and and Envi Envirronme onment nt (HSE (HSE), ), thei theirr objective is to improve working conditions and environmental management by having having clear clearly ly define defined d standa standards rds across across the operat operating ing compan company y and supply chain.
3. To make responsible business a competitive advantage 6 | Page
Corporate responsibility at Telenor Telenor will be part of managing risk and linked to the core core busine business. ss. Teleno elenorr has a strong strong track track recor record d when when it comes comes to sust su stai aina nabl ble e busi busine ness ss:: it was rank ranked ed top top perf perfor orme merr by the the Dow Dow Jone Jones s Sustainability Indexes (DJSI) in 2007 and 2008.
4. To provide a superior customer experience Faced aced with with an incre increasi asingl ngly y compet competiti itive ve envir environm onment ent,, Teleno elenorr needs needs to differentiate itself by providing a superior customer experience. In the vision and core values, they put customer experience at the top of the agenda. One of their ambitions is to reach a situation where end-users’ brand preference is higher than the Telenor market share.
5. To ensure best practice benchmarking A global objective is to achieve a higher reduction in the average operational cost per minute than the expected decline in average price per minute. Telen Telenor or aims to achieve achieve considerab considerable le continued continued growth growth in operating operating cash flow from its operations.
6. To drive change and constant renewal To secure a strong industry position, innovation is paramount. Major areas identified are: •
Their long-term ambition is to achieve the same position in broadband (mobile and fixed) as they have in mobile voice today.
•
Telenor aims to establish itself as a significant player in parts of the fina financ ncia iall
serv servic ices es
indu indust stry ry
in
sele select ct
unde underr-ser -servi vice ced d
mark arkets, ets,
establishing a platform for long-term growth. •
Telenor controls many valuable assets that can be further developed together together with with partners. partners. Partne Partnerr-driven -driven innovation innovation is a cost-effec cost-effective tive way to create many new revenue-generating revenue-generating services.
Objectives 7 | Page
2006-07
2015
ARPU(Av ARPU(Average erage Revenue Revenue Per
$4
$6- $8
10%
40%
Market Penetration
9%
30%
Mark arket Shar hare in term erms of
7%
30%
5% – 6%
10%
20%
90%
User) Mark arket Shar hare in term erms of Subscribers
Revenue EBITA(Earning Interest,
before Tax
and
amortization) Unprompted
Brand
Awareness
STRATEGIES •
Market Penetration
•
Diversification in new directions and regions
•
Focus on mobile internet
•
Acquiring a microfinance bank
•
Global expansion (Telenor has also entered the Indian market by taking a stake in Unitech Wireless)
•
Mix of differentiation and low cost
•
Lower capital expense investment due to recession/ slow market growth
•
Utilize 3G technology opportunity
STRATEGY STRA TEGY IMPL IMPLEMEN EMENT TATION 8 | Page
OBJECTIVES PrepaidPrepaid- djuice, talkshawk Postpaid- persona Achieve a SIM penetration over 70% Attain a market share above 25% Maintain EBITDA in mid thirties Obtain a ratio of Capex/sales below 25% Capital expenditure expenditure was related to network roll-out to accommodate subscription growth and increased traffic Increase Subscription growth
POLICIES
A STRATEGY SUPPORTIVE CULTURE
SOURCES OF CULTURE AT TELENOR PAKISTAN PEOPLE Telen Telenor or Pakistan akistan consists consists of energetic energetic,, youthful youthful and dedicated dedicated employee employees s aged 27 to 28 on average. An appropriate match is required between the cult cultur ure e and and emplo employe yees es at recru ecruit itme ment nt and and hiri hiring ng.. If Peopl eople e Exce Excell llen ence ce (Human (Human Resour esource ce Depart Departme ment) nt) feels feels that that a person person will will not be unable unable to adjust adjust into into the organ organiza izatio tion’s n’s envir environm onment ent,, even even if he/she he/she is perfor performi ming ng functionally well, the person is rejected.
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Prima Primaril rily y the cultur culture e comes comes from from the top manage managemen ment. t. CEO of Telenor elenor Pakistan is humble and cooperative. The employees get the message that if the the top top mana manage geme ment nt is so acco accomm mmod odat atin ing g then then the the empl employ oyee ees s sh shoul ould d behave behave simil similarl arly y. What What is import important ant to the CEO become becomes s impor importan tantt for employ employees ees to identi identify fy comple completel tely y with with the organi organizat zation ion.. There There are are four four foreigners in the top management but this does not create communication barriers. They are extra humble to others while individuals of a local origin are are extra xtra sens sensit itiv ive e to them them so no one one feel feels s alie aliena nate ted. d. The The valu values es of humbleness and free interaction in putting forth ideas lead to a harmonious culture and efficient communication. The management is easily accessible to discus dis cuss s variou various s iss issues ues.. It is diffic difficult ult to dis distin tingui guish sh betwee between n them them as the culture is so homogeneous that it keeps every one at par with others (no formal protocol is given).
ORGANIZATIONAL ETHICS While making any decision, Telenor Pakistan has been ethically conscious. Since Telenor Telenor (the parent company) has is origins in Norway, a society with a soft-oriented and feminine culture, Telenor Pakistan acknowledges its moral and ethical duty towards its stakeholders and society. society. Telenor Pakistan will not resort to bribery or illegal offers to accept any decision; values will not be compromised to get licensed. If the organization believes it is not ethically right, it will never take that decision. In most of advertisements they project themselves as the care taker of the values of Pakistani people, so they claim to cherish the core cultural norms and value values s of the the Pakista akistani ni people people.. When When the cartoon cartoon contr controve oversy rsy arose arose,, Telenor Telenor condemned such actions mocking religious beliefs and portrayed this on their building.
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ORGANIZATIONAL STRUCTURE The organic structure of Telenor Pakistan promotes cultural values that result in integration and coordination.
CEREMONIAL RITES AT TELENOR PAKISTAN Type of Rite Rite of passage Rite Rite of of inte integr grat atio ion n
Rite of enhancement
Instances of Rite Orientation Sessions
Purpose of Rite Learn and internalize
Eid Eid Mila Milan n Progr Program ams, s, Hal Hallo lowe ween en
values Build and reinforce reinforce
Parties Parties and announcements of
common values
Telenor’s Telenor’s success Legends, Press Releases,
Integrate and
Employee of the Year Rewards,
enhance cultural
Employee Promotion and
values
Rotation
At Telenor, People Excellence reinforces the culture through the concept of a ‘LEGEND’ for individuals who have performed outstandingly. outstandingly. These become role models for other people and their examples are quoted on various occasions (forum or ceremonies), ceremonies), so every employee is internally motivated to work harder.
The The new recr recruit uits s are are given given orient orientati ation on sessio sessions ns where where they they are are made made to familiariz familiarize e with the values and norms norms of the organization organization and how they can contribute contribute to the organization organization even better. better. They are also provided provided with with a Joining Book that comprises of the code of conduct and complete structure of policies and values.
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HUMAN RESOURCE STRATEGIES The The Human Human Resour esource ce at Teleno elenorr Pakista akistan n is their their core core compet competenc ency y. The reason is that the employees create a culture and all the achievements of Telenor are attributed to its flexible culture. It is necessary to motivate and retai etain n this this asse assett of the the orga organi niza zati tion on.. For this this purp purpos ose, e, trai traini ning ng and and comp compen ensat satio ion n is prov provid ided ed to emplo employe yees es along along with with othe otherr moti motiva vati tiona onall techniques.
TRAINING The methods of training differ from function to function. On-the-job training is required in the Customer Relationship Department (CRD) and similar system training in the IT Department. Management Training Training Progr Programs ams combin combine e exper experien ientia tiall learn learning ing with with theory theory.. Leade Leaders rs are are chosen according to the following role expectations:
LEADERSHIP EXPECTATIONS EXPECTATIONS FOR F OR TELENOR TELENO R PAKISTAN PAKISTAN
COMPENSATION The core compensation includes: Base salary
LEADERSHIP
EXPECTATIONS Bonus/commission
Long-term incentive plans
In addition, Telenor offers a total package that may include insurance, recreational activities and other benefits adapted to the local market and individual employee’s need. 12 | P a g e
Manage Managers rs are are rewar rewarded ded accor accordin ding g to the achiev achievem ement ent of assign assigned ed goals. Apart from monetary rewards, such as variable pays/increments, other other motiva motivati tional onal tools tools such such as recog recognit nition ion (Emplo (Employee yee of the Year rewards) are used.
CAREER GROWTH Initially, qualifications are the defining criterion for fresh graduates. For care areer grow growtth, the the right ight mix of per perfor formanc ance on the job and and performance potential for the other level is imperative. Apart from the right attitude, knowledge also matters. If an individual from Finance gets a higher degree, for instance, becomes a chartered accountant then then the chance chances s of growt growth h incre increase ase.. There There are are no specif specific ic caree careerr paths: Vice President President (VP) of Human Capital Division (HCD) became the next Chief Marketing Officer (CMO).
EMPLOYEE MOTIVATION Underp Underperf erform orming ing manage managers rs are are encour encourage aged d throug through h coachi coaching ng and counse counselin ling g by their their respe respecti ctive ve direct directors ors or the direc director tor of Peopl People e Exce Excell llen ence ce.. The The tur turnove noverr is not not high high as compa omparred to that that of the the industry. There is no defined employee exchange program. Employees perfor performi ming ng exce excepti ptional onally ly well well are are taken taken up to work work in the Telenor elenor Group.
Reloc locatio ations ns
are
comm ommon
in
the the
orga organi niz zati ation: on:
employ ploye ees
are are
transferred from People Excellence to Finance or from Procurement to Customer Relations. Investment per employee is placed at the higher end of the industry.
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DIVERSITY Telenor Pakistan is keen to promote diversity and has achieved good results in this this area area.. Telen elenor or has has deve develo lope ped d requi equire reme ment nts s for for dive divers rsit ity y in both both recr recrui uitm tmen entt and and our our manag managem emen entt deve develo lopm pmen entt prog progra rams ms.. Ther There e is an appropriate blend of less seasoned and experienced employees. No quota has been assigned; the best-fit candidate (according to the job jo b requirements) requirements) is employed. At the office level or call centers, even fresh graduates are apt but the director level requires a masters degree and preferably some work experience.
Tel Teleno enorr Pakista akistan n has a large large propor proportio tion n of female females s who are are recru recruite ited d for internal leadership development programs and executive positions on the basis of past performance. The organization is working on Day Care Centers to help female employees manage their responsibilities after settling down. Relocation issues are dealt cooperatively when female individuals move out of the city after marriage and wish to continue working. They are relocated and facilitated in the new city.
STRA STR ATEGY EV EVALUA ALUATI TION ON REENGINEERING: AFTERMATH OF FINANCIAL CRUNCH 14 | P a g e
Tel Teleno enorr has attain attained ed a compet competiti itive ve advanta advantage ge in the marke markett by aligni aligning ng compet competenc ences es and strate strategie gies. s. Highl Highly y motiva motivated ted employ employees ees and flexib flexible le culture enables them to achieve an edge over competitors. COMPETITIVE ADVANTAGES OF TELENOR PAKISTAN
Improving our performance management The The Teleno elenorr Group Group aims aims to creat create e a stronge strongerr link link betwe between en the strate strategy gy proc proces ess s
and and
perf perfor orm mance ance
moni monito tori ring ng..
All All
oper operat atin ing g
comp compan anie ies s
will will
impl implem emen entt a new new and and impr improv oved ed mana manage geme ment nt mode modell wher where e stra strate tegi gic c objectives and ambitions are monitored closely at both the company level and the lower department level.
Since its launch of services in March 2005, Telenor Pakistan has exceeded all expectations: It has created the second largest mobile network and the largest and most advanced data network in the local market, turned into the second highest revenue-generating mobile player with the highest Average Average Revenue Per User (ARPU) in the market, and become the second largest mobile player in the market with 18 million active subscriptions in little more than 3 years of operations. During the first half of 2008, Telenor Pakistan added 3.24 million subscriptions against the industry average of 1.63 million, taking 33% of the market share of net additions over the period – the highest in the mobile sector in Pakistan. The company has created 2500 direct and more than 25000 indirect employment opportunities with 100,000+ retail outlets and 200+ franchises in addition. 99.9% of these th ese employment opportunities belong to Pakistanis. Initiated with a relief effort worth 95 million rupees in the wake of the devastating earthquake of October 2005, Telenor Pakistan’s community contributions have extended over the years to include education, empowerment, empowerment, enterprise, and environment environment - with special focus on bringing 15 | P a g e
the telecom promise within the grasp of the most disadvantaged sections of the society. society. Telenor Pakistan has received several awards for its solid performance in key areas of activities: Federation of Pakistan Chambers of Commerce & Industry’s Telecom Excellence Award in Foreign Direct Investment in June 2006 Central Board of Revenue’s High Tax Payer Award 2004-5 in January 2006 The Pakistan Society of Human Resource Management’s Preferred Graduate Employer Award for Most Preferred Telecommunications Company 2007 among MBA students SAARC Communication Industry Conference 2007’s Most Innovative Mobile Operator Award Award and Mobile Operator with the Most Consumer Pull Award Telenor Global Brand Award for the year 2007 All Pakistan Dawn Aurora Advertising Awards in three of five nominated categories in March 2007 The National Forum for Environment Environment & Health’s Annual Environment Excellence Awards 2008 Lahore Chamber of Commerce & Industries’ Appreciation Award for the Largest FDI and Rawalpindi Chamber of Commerce & Industries’ Achievement Award 2008 The Helpline Trust’s 2nd Corporate Social Responsibility Award 2008 Telenor Pakistan is committed to bringing true mobile innovation to the under-served under-served masses of Pakistan. The company has picked up two Universal Service Fund Fund projects in order to provide connectivity to the yet unconnected in the remotest areas of Pakistan. It aims to invest strongly for further network expansion into the rural areas and for the rollout of third generation of mobile technology (3G) in Pakistan. 16 | P a g e
SWOT Analysis An overall evaluation of Telenor’s Strengths (S) Weakness (W) Opportunities (O) and Threats (T) are as follow:
Strengths Network quality & design Superior customer care Financial Strength Excellent Coverage & Distribution. Commercial Commercial Launch of LDI & mobile services Contract with Siemens & Nokia Brand image of Quality PTA initiatives E-commerce usage.
Weaknesses Relatively low market share Low profit margins Negative cash flows in the initial years
Opportunities Favorable Macroeconomic indicators low cellular market penetration Inefficiency & poor performance of other mobile networks Co branding e.g. Ufone with ABN AMRO Strategic Alliances & Infrastructure Infrastructure Sharing Facilities Facilities International Mobile Equipment Identity System
Threats 17 | P a g e
Rolling Customers Privatizations Privatizations & deregulations- increased competitions. Grey Traffic MNP mobile number portability Wireless Wireless technology at boom Public pay phones & calling cards usage where network is not available Propagandas attacking brand image
Opportunities
Strengths
Weaknesses
SO Strategies
WO Strategies
•
•
Introducing 3G
similar industries
Make the post
e.g. DSL services
more attractive ST Strategies •
Co branding with
pre-paid packages WT Strategies •
Protect image
other industries
CSR efforts •
Capitalize and
Use other
promote EDGE
mediums of
technology
than conventional advertising
18 | P a g e
More attractive
through constant
promotion other
BCG
•
companies in
e.g. Banks •
Diversifying into
service
paid package
Threats
•
Boston Consulting Group is used to help corporations with analyzing their business units or product lines. This helps the company allocate resources resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis. This BCG matrix is with respect to the competition that exists for Telenor in the telecom industry. industry. This includes the following mobile operators: •
Mobilink
•
Ufone
•
Warid
•
Zong
The
why all the companies are place in either question mark or star is that it is a
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growing industry and overall the market share is increasing however individual players may not be doing well. The reason why telenor and Ufone are placed in stars is that their relative market share is increasing increasing which is visible by their sales and ARPU. Mobilink although very old in the market is now losing its relative market share to both Ufone and Telenor. Mobilink is now investing in its brands and have engaged in price wars to stay competitive and regain its market share. Same is true for Warid and Zong, the only reason why they are placed in question mark is that the overall industry is growing however their individual performance has been poor over the years. Ufone has changed its strategic policies. It has gone through rebranding and emerged as a more successful company. Now if we talk about Telenor Telenor ,it has gained a favourable position in the industry through effective advertising and packages. It can also be attributed to effective utilization of its Human Resource to gain a competitive advantage in the in the industry.
FUTURE OUTLOOK 20 | P a g e
Following can be the future plans of action that Telenor can pursue in order to ensure sustainable growth: Improve network quality to make it a sustainable competitive advantage
Develop an employee exchange program for enhanced employee motivation
Establish a coordination department/integrated IT system for effective communication
Introduction of employee stock options
Quota for the disabled people for greater CSR and diversity Building an organization with competency, c ompetency, capabilities and resource strengths Developing Technical Know How in Employees Developing budgets to steer ample resources into critical value chain activities Creating strategy supportive policies and procedures Instituting best practices and a commitment to continuous improvement Installing support systems and Value added Services
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Maintain low cost
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