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111

DEPARTMENT OF BUSINESS ADMINISTRATION

SUBMITTED TO:

M. Shahid Tufail
SUBJECT:

Strategic Management

TOPIC:

Final Project Report

SUBMITTED BY:
MOSAB MUNIR ( 583 )
Abdul Wahab ( 613 )
Hanzala Tariq ( 605 )
Adil Tanveer ( 572 )

MBA (Regular) Evening

4th SEMESTER
(Session 2008-2010)

GOVERNMENT COLLEGE UNIVERSITY

FAISALABAD
211

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 the last year Ufone successfully completed the launching of sites under 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, has
network coverage in more than 4,745 locations throughout the country.
Ufone's operational performance has been very encouraging 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 strict control over expenses.

311

TABLE OF CONTENTS

Introduction of Ufone

05

Vision & Mission

07

Details of project

08

Purpose of project

09

Findings

10

SWOT Analysis

11

Competitive analysis

14

EFE Matrix

16

IFE Matrix

18

CPM

19

SWOT Matrix

21

SPACE Matrix

23

BCG(Boston Consulting Group) Matrix of Ufone

26

GSM(Grand Strategy Matrix)

28

IE(Internal, External) Matrix of Ufone

29

QSPM(Quantitative Strategic Planning Matrix)

30

Conclusion & Recommendations

33

411

INTRODUCTION
History of Ufone

Ufone GSM is a Pakistani GSM cellular service provider. It is one of six GSM Mobile companies
in Pakistan and is a subsidiary of Pakistan Telecommunication Company. The company
commenced its operations under the brand name of Ufone from Islamabad on January 29 2001.
Ufone expanded its coverage and has added new cities and highways to its coverage network.
After the privatization of PTCL, Ufone is now owned by Etisalat.
PTML is a wholly owned subsidiary of PTCL. Established to operate cellular telephony.
During the year 2001, as a consequence of PTCLs privatization, 26% of its shares were acquired
by Emirates Telecommunication Corporation (Etisalat). Being part of PTCL, the management of
Ufone has also been handed over to Etisalat.
During the year July 2005 to June 2006, Ufone continued on the path to success. The Company
further expanded its coverage and has added new cities and highways. Ufone has network
coverage in more than 750 cities, towns and across all major highways of the country. During the
year Ufone successfully completed the network expansion of Phase 4 in existing as well as in new
cities and towns which amounted to more than US Dollar 170 million. As a result the asset base of
the Company has increased from Rs. 20 billion to Rs. 27 billion.
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Future Plans keeping in view the growth potential of the cellular industry there is no option but to
be aggressive in order to remain a potent force in the cellular industry. In order to extend cellular
network to new cities, towns and highways and enhance its current installed capacities in existing
cities, Ufone has finalized a huge network expansion contract amounting to about USD 550
million, which will enhance the subscribers capacity by 10 million. This is the largest ever
expansion project of Ufone. As the world of telecommunications advances, Ufone promises its
customers to stay ahead, developing and evolving, to go beyond their expectations, because at
Ufone, its all about U.

Type
Industry
Genre
Founded

Private
Telecommunication
Subsidiary
January 29, 2001

Founder(s)

Pakistan Telecommunication Company Ltd

Headquarters 13-B, F-7 Markaz Islamabad, Pakistan

Area served

2336 cities of Pakistan, GT Road, Super Highway & Motorway

Key people
Products

Abdul Aziz, CEO

Revenue

Rs.5.1 billion PKR (first quarter 2006-07).[1]

Pre Pay, Post Pay

611

Parent
Website

PTCL Pakistan
www.ufone.com

Vision Statement
To be the leading telecommunication service provider in Pakistan by offering
innovate communication solutions for our customers while exceeding shareholder
value & employee expectation.

Mission Statement
To become the best cellular communication option available in the country for
U.
At Ufone we aim to provide you with wider coverage, superior connectivity, clear
signals & voice quality. Wherever you are, Ufone keeps you connected

SLOGANS
One of the main reasons of the popularity of the Ufone is to use slogan to attract the
customers. The Slogan of Ufone in Urdu is Ufone Tum Hi to Ho",
In English "its all about U

711

DETAILS OF THE PROJECT

Ufone is a Cellular Service Provider founded in 2001 It is also a subsidiary firm of PTCL
As of 2008; Ufone employs more than 1,730 people. It manufactures its the GSM
company providing services to all four continents urban and rural areas., As of 2008, Ufone
is the second largest telecommunication 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
Pakistan Mobile Communications Limited, better known as Mobilink GSM, is a
telecommunication service provider in Pakistan. According to PTA statistics, Mobilink has
30.88 million customers by January 2008. Mobilink's Head office is located in Kulsum
Plaza, Blue Area, Islamabad.

TELENOR
Telenor (OSE: TEL, NASDAQ: TELN) is the incumbent telecommunications company in
Norway, with headquarters located at Fornebu, close to Oslo. Today, Telenor is mostly an
international wireless carrier with operations in Scandinavia, Eastern Europe and Asia. In
addition, it has extensive broadband and TV distribution operations in four Nordic
Countries.

WARID

811

Warid Telecom International is an Abu Dhabi based mobile telecommunication firm

providing telephony services in Bangladesh, Pakistan and Uganda.

ZONG (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 launched GSM services as well. Its main competitor emerged in late 1990s 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 CMPak to 100%. Moreover, PTA (Pakistan Telecommunication Authority) has
announced that it may resolve the frequency issue with China Mobile, as it was one of the
main reason for pullout by Millicom International Cellular S.A.
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.

PURPOSE OF THE PROJECT

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

Market share
With the monthly additions average around 2.5 million subscribers, 2009 has been a phenomenal
year for the mobile market growth in Pakistan. A quick analysis of this data reveals few trends
about market leadership. Mobilink gained the most subscribers (5.45 million) in this period. Its
market share has been decreasing gradually but thats expected with the increase in competition.
Telenor was the fastest growing company, 45% of their current subscribers (5.35 million) were
gained this year. No doubt that Telenor has emerged as a strong contender. It took a small lead over
Warid in March and has been able to maintain it. The rate of growth for Ufone has been impressive
as well. It gained 5.32 million of the approx 20 million new subscribers in first 6 months of this
year in Pakistan.

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Findings:
INTERNAL & EXTERNAL ANALYSIS
INTERNAL ENVIORNMENT

Human Resource Management

Marketing Department
Commercial Department
Sales Department
Finance Department
Payroll Department
Information Technology Department
Engineering Department
Administration
Auditing Department

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Customer Care
EXTERNAL ENVIORNMENT

Economic Conditions
Social Conditions
Culture
Demographics
Environmental
Competitive
Technological
Consumer Attitude
Globalization

SWOT ANALYSIS
Strength
Ufone has Network Coverage in more than 750 cities, towns and across all major
highways of the country.
Ufone provides International Roaming facility with more than 150 international
operators across 79 countries.
Ufone has always believed in a solid Commitment to growth, security and reliability.
Therefore, Ufone has always balanced its expansion efforts and quality of service. With a
total current investment of $400 Million.
Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a
subscriber base of around 16.5 million and a market share of nearly 25%. Ufone has seen a
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subscriber growth rate of over 200% in the last year, and since the start of 2005 Ufone
added nearly 5 million subscribers onto its network. A remarkable achievement indeed,
especially considering the fact those two new international players also entered into the
market in 2005.
Ufone increased its Focus on the youth segment (which comprises 50% of the
population), with the Prepay brand.
Ufone has some exciting and energetic SMS packages that made SMS almost free. They
are offering Rs. 25, Rs.50, Rs.80 packages which its subscribers really love it.
Variety of Value Added Services.
Established customer base including lower middle class. Fewer rates than competitors.

WEAKNESSES
Ufone does not have the proper lists of its customers. It has the list but this list is not
authentic which is increasing the unauthorized use of its sim specially pre pay. Ufone have
to take serious steps to properly list its customers to ensure that there is no misuse.
Ufone has the problem of voice quality. Though its coverage area is vast and it covers more
than 750 towns and cities in Pakistan but the voice quality is not as good as it should be.
Poor Organizational Structure. Centralized structure failed to provide proper guidance
over instruction and policies
Stagnant Profitability. As compared to financial assets, Ufone is not close to expected
profitability
Its coverage on Southern part of Pakistan is quite good but in northern areas its coverage is
a bit poor.
Ufone is plagued with some internal problems like when it is privatized to Etisalaat being
the part of the PTCL many employees were not happy with the pay scale that they were
offering.

OPPORTUNITIES

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Ufone could develop some new and innovative services to attract customers and some of
the suggestions are as under which will help them to increase their revenues:
They should also introduce some International call packages to Middle Eastern countries
because there are lots of Pakistanis who are living in those countries so people will
definitely be tempted towards such package.
Ufone should develop some new franchises in remote areas so that people will get more
and more benefit from it and it will help to increase their customers.
As in Pakistan Youth is almost the 50% of the population so Ufone can take advantage of
this demographic situation and should introduce more and more services and packages that
attracts youth towards it.
Ufone should extend its network coverage area to Northern part of the country as well
because in that part not too many companies are giving services and if Ufone give its
service there then it will definitely attract people and its number of customers will shoot
like a rocket.
If Ufone enhance its voice quality then definitely it would be prefer more by customers.
Ufone should import technological equipments from China because they are giving the best
technology at very low rates so it will not only help Ufone to be ahead technologically but
also will help Ufone to decrease its cost.
Ufone can surprise its competitors by introducing Ufone kiosk. These will be ATM like
machines and that will give 24-hour service to Ufone subscribers to load the balance just
like they take money from ATM.

THREATS
As Ufone is cellular company and there is cut throat competition among cellular
companies in Pakistan. There are four other companies also working in Pakistan so Ufone
would have to face some growing competitive pressures.
In Balochistan and FATA where Ufone already has network coverage is in danger because
of critical situation and operation being held there. Investment of Ufone is in danger.

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By the arrival of China Mobile Company (Zong) in cellular industry of Pakistan the
Ufone and other companies now have to face the severe competition. As Zong is
introducing some various attractive packages of both SMS and calls to attract customers.
Ufone have to develop strategies to counter their strategy and to survive in the market.
The key threat to Ufone is also some adverse Government policies of implementing Tax
on telecommunication industry that will ultimately affect the revenues.
Telenor is giving higher salary to its employees as compared to Ufone so many of its
skillful and competent employees are going there. That will affect the companys
profitability in the long run.
Another threat is any new company from foreign countries e.g. Orange and Vodafone.

COMPETITOR ANALYSIS
The competitive environment for mobile telephony in Pakistan is tough and Ufones is a
major player of the market. Primary competition is of course between four mobile
operators for the share of the market. But there is other potential source of competition,
which should also be taken into consideration

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DIRECT COMPETITION:

Direct competition to Ufone service is with thee licensed mobile world in todays
market. These are:
Mobilink.
Warid telecom.
Telenor.
Zong

INDIRECT COMPETITION:

The indirect competition is from:

Fixed line services.
Card payphone services.
Prepaid calling cards.
Massive expansion in penetration and quality of fixed line, payphone and prepaid calling cards
can effect mobile business environment.
Economic Scenario of Pakistan makes this observation relevant because mobile services are
still comparatively much expensive and customer may prefer to use cheaper, more readily
available alternatives

Target Market
Ufone has the target market concerning youth in the nation. This target market of youngster
comprises 40% of the population. Ufone has targeted the corporate class for which the Ufone is
customizing the packages in order to preserve the existing small businessman.
Gender: Both Male & Female

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Targeting: Mainly they are targeting to youth, if we look at their ads, which are
shown on the TV, we got the clear idea.

Industry Analysis: The External Factor Evaluation (EFE) Matrix

An External Factor Evaluation (EFE) Matrix allows strategists to summarize and evaluate
economic, social, cultural, demographic, environmental, political, governmental, legal,
technological, and competitive information. The EFE matrix consists of five steps process.
Assign weight to each (0 to 1.0)
Sum of all weights = 1.0
Now you have to arrange them according to their weight age that which factor is most important. It
should be weight age in % ages. The sum of the total of all the factors should always be one.
Assign 1-4 rating to each factor
Firms current strategies response to the factor: how well firms response to these factors.
Multiply each factors weight by its rating
Produces a weighted score
How the firm will respond to these factors external factors. Such criteria are known as rating.
Sum the weighted scores for each
Determines the total weighted score for the organization.
Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5

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EXTERNAL FACTOR EVALUATION (EFE) MATRIX

EXTERNAL FACTOR EVALUATION (EFE) MATRIX of Ufone

Key External Factors

Weight Rating Weighted

Score

Opportunities
1 Globalization
2 Publicity & Marketing
3 Can target Corporate
4 Develop New value Added services

0.12
0.06
0.08
0.10

4
3
3
4

0.48
0.18
0.24
0.40

5 Extend Coverage to Northern Areas

0.05

0.15

6 introduced International SMS packages like

local SMS & call package

.06

.18

7 develop some new franchises in remote areas

.08

.32

8 Introducing Ufone kiosk.

Just like ATM.
Threats
1 Old Stable Companies & arrival of China
Mobile Company
2 PTCL cellular license
3 Price War
4 Government Interference

.05

.10

0.10

0.2

0.08
0.05
0.12

2
2
3

0.16
0.10
0.36

5 Pressure groups & health issues due to towers

in residential areas.

.05

.10

TOTAL

1.00

2.97

Total weighted score for the Ufone external factor is 2.97 which is above average. So it has
aggressive strategy.

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Internal Factor Evaluation Matrix- IFE Matrix

A summary step in conducting an internal strategic management audit is to construct an Internal
Factor Evaluation (IFE) Matrix. This strategy formulation tool summarizes and evaluates the major
strengths and weaknesses in the functional areas of a business, and it also provides a basis for
identifying and evaluating relationships among those areas. Intuitive judgments are required in
developing an IFE Matrix, so the appearance of a scientific approach should not be interpreted to
mean this is an all powerful technique. A thorough understanding of the factors included is more
important than the actual numbers. An IFE Matrix can be developed in five steps:
1. List key internal factors as identified in the internal audit process. Use a total of from ten to
twenty internal factors, including both strengths and weaknesses. List strengths first and then
weaknesses. Be as specific as possible, using percentages, ratios, and comparative numbers.
2. Assign a weight that ranges from 0.0 (not important) to 1.0 (all important) to each factor. The
weight assigned to a given factor indicates the relative importance of the factor to being successful
in the firms industry. Regardless of whether a key factor is an internal strength or weakness,
factors considered to have the greatest effect on organizational performance should be assigned the
highest weights. The sum of all weights must equal 1.0.
3. Assign a I to 4 rating to each factor to indicate whether that factor represents a major weakness
(rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major strength
(rating = 4). Note that strengths must receive a 4 or 3 rating and weaknesses must receive a 1 or 2
rating. Ratings are thus company based, whereas the weights in Step 2 are industry based.
4. Multiply each factors weight by its rating to determine a weighted score for each variable.
5. Sum the weighted scores for each variable to determine the total weighted score for the
organization. Regardless of how many factors are included in an IFE Matrix, the total weighted
score can range from a low of 1.0 to a high of 4.0, with the average score being 2.5. Total weighted
scores well below 2.5 characterize organizations that are weak internally, whereas scores
significantly above 2.5 indicate a strong internal position. Like the EFE Matrix, an IFE Matrix
should include from 10 to 20 key factors. The number of factors has no effect upon the range of
total weighted scores because the weights always sum to 1.0.

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INTERNAL FACTOR EVALUATION for

Ufone
KEY INTERNAL FACTOR
INTERNAL STRENGTH

Weight

Rating

w. score

Network coverage

.08

.24

Unique offers & packages

.12

.48

Marketing & Advertising

.10

.3

Financial position & sales Deptt.

.10

.3

Payroll Department & HRM

.05

.15

Latest Technology Adoption

.06

.18

Administration

.04

.08

Customer Care & Feed back

.10

.3

Lack of Franchises

.04

.08

Network problem on special occasions.

.04

.12

Behind on Excessive Demand

.05

.15

Poor Organizational Structure

.04

.08

Global Expansion

.10

.2

.08

.08

INTERNAL WEAKNESSES

(Less coverage in remote areas).

Northern areas coverage

2.74

Total weighted score for the Ufone internal factor is 2.74 which is above average.
So it is internally strong and aggressive approach.

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CPM-Competitive Profile Matrix

EFE is used to collect competitive intelligence information from external environment. It not
focuses on internal issues. Whereas CPM is little different from EFE it also consider the internal
issues and best feature of CPM that it allow to compare the competitor critical success factor with
your organization.

Find out critical success factor.

Assign weight to each factor depend up how important the specific factor for the organization
success.
The weight range from 0.0 to 1.0 lower number shows no or minimum importance and high
weight show more importance of factor to the company.
Assign rating to each factor depends upon how well organization respond to that factor.
Assign a 1-4 rating to each critical success factor to indicate how effectively the firms current
strategies respond to the factor. (1 = response is poor, 4 = response is extremely good)

Multiply each factors weight by its rating to determine a weighted score.

Sum the weighted scores.

Average total weighted score is 2.5.

The above CPM matrix compares the oil marketing companies on importance factor. The total
calculated figure tells the exact situation.
The Competitive Profile Matrix (CPM) identifies a firm's major competitors and their particular
strengths and weaknesses in relation to a sample firm's strategic position
In a CPM the ratings and total weighted scores for rival firms can be compared to the sample firm.
This comparative analysis provides important internal strategic information. Ufone Competitive
Profile Matrix is provided in Table. In this matrix market share, growth rate and financial strength
are the most important critical success factors, as indicated by a weight of 0.60. In market share
Mobilink is leading but in the growth factor Ufone is leading with the weighted point of 0.40

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The ratings values are as follows:

1 = major weakness,
2 = minor weakness,
3 = minor strength,
4 =major strength.
As indicated by the total weighted score of 2.78, Zong is weakest. Because it is at its initial
position as compare to competitors. With the point of 3.18 Mobilink is leading. Only eight
critical success factors are included for simplicity; this is too few in actuality

Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix

The Threats-Opportunities-Weaknesses-Strengths (TOWS) is also named as SWOT analysis. A
TWOS Analysis is a strategic planning tool used to evaluate the Threats, Opportunities and
Strengths, Weaknesses, involved in a project or in a business venture or in any other situation
requiring a decision. This is an important tool in order to formulate strategy. This Matrix is an
important matching tool that helps managers develops four types of strategies: SO Strategies
(strength opportunities), WO Strategies (weakness- opportunities), ST Strategies (strength-threats),
and WT Strategies (weakness-threats).The most difficult part of TOWS matrix is to match internal
and external factor. Once the objective has been identified, TOWS are discovered and listed.
TOWS are defined precisely as follows:
Strengths are attributes of the organization that are helpful to the achievement of the objective.
Weaknesses are attributes of the organization that are harmful to the achievement of the objective.
Opportunities are external conditions that are helpful to the achievement of the objective.
Threats are external conditions that are harmful to the achievement of the objective.

Steps for developing strategies:

There are eight steps involved in constructing a TOWS Matrix:
1. Rank external opportunities
2. Rank external threats
3. Rank internal strength
4. Rank internal weaknesses.
5. Match internal strengths with external opportunities and mention the result in the SO Strategies
cell.
6. Match internal weaknesses with external opportunities and mention the result in the WO
Strategies cell.
7. Match internal strengths with external threats and mention the result in the ST Strategies cell.
8. Match internal weaknesses with external threats and mention the result in the WT strategies cell.

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SWOT MATRIX OF UFONE

StrengthsS

Opportunities O
O1. Globalization
O2. Publicity
O3. Can target corporate
O4. New value added
services
O5. Covering Northern
Areas
O6. New Product
(Ufone kiosk)
O7. Penetration
Threats T
T1. Old Stable Companies
T2. Attractive Packages By
Competitors
T3. Price War
T4. Government
Interference
T5. Pressure groups & health
issues

Weaknesses W

S1. Capital & financial

position
S2. Network Coverage &
voice quality
S3. Resources
S4. Trend setter
S5. Unique offers &
packages
S6. High Growth Rate
S7. Advertising &
marketing
S8. Focus & retain
customers
SO-Strategies

W1. Northern areas

Coverage
W2. Subsidiary of PTCL
W3. Low Market Share
W4. Weak MIS
W5. Old Staff Less
motivated & unfamiliar to
IT.

S1,O1 Expand
S2, O5 Increased coverage
& franchises
S3,O7 Penetration
S1,O3 Acquisition & Make
the post paid package more
attractive
S4,O6 Increased loyalty &
brand image
S7, O2 Attract new
customers.

W1,O5 Enhance coverage

& market share
W3,O3 Acquisition

ST-Strategies
S1,T3 Cost Leadership
S3, T2 Penetration & co
branding with others like
banks..
S4, T1 Market Leader
S5, T2 Introduce new
packages & services.

WO-Strategies

WT-Strategies
W3,T2 Downsizing

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The Strategic Position and Action Evaluation (SPACE)

Matrix
The Strategic Position and Action Evaluation (SPACE) Matrix is another important Stage 2
matching tool of formulation framework. It explains that what is our strategic position and what
possible action can be taken. It is not closed matrix. It is prepared on graph. It is closed matrix.
This follow counter clockwise direction. It contains four-quadrant named aggressive, conservative,
defensive, or competitive strategies. The axes of the SPACE Matrix represent two internal
dimensions financial strength [FS] and competitive advantage [CA]) and two external dimensions
(environmental stability [ES] and industry strength [IS]).
These four factors are the most important determinants of an organization's overall strategic
position.

SPACE Matrix for UFONE

Financial Strength (FS)

1. Revenues
2. Return on investment
3. Working capital

RAITNGS
5.0
4.0
4.0
13.0

Competitive Advantage (CA)

1. Resources & Assets
2. High growth rate
3. Advertising & Marketing
4. Competition capacity utilization
5. 2nd largest cellular company in Pakistan.
6. Good speed & superior voice quality.
7. Customer focus.
8. Computerized complaint cell
9. Successful brand
10. Attractive packages.

-2.0
-1.0
-2.0
-3.0
-1.0
-3.0
-3.0
-3.0
-2.0
-3.0
-23.0

Environmental stability (ES)

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1.
2.
3.
4.
5.

Technological changes
Rate of inflation
Demand variability
Government Interference
Tough competition

-3.0
-4.0
-3.0
-1.0
-2.0
-13.0

Industry Strength (IS)

1.
2.
3.
4.
5.

Financial stability
Resources utilization
Profit potential
GPRS Technology
Scope in Ruler areas

5.0
5.0
4.0
5.0
4.0
23.0

Conclusion
FS average is

13/3 = 4.33

CA average is -23/10 = -2.3

ES average is -13/4
IS average is

= -3.25

23/5 = 4.6

Directional Vector Coordinates: x-axis:

4.6+ (-2.3) = 2.3

Directional Vector Coordinates: y-axis:

4.33+ (-3.25) = 1.083

The UFONE should peruse Aggressive strategies

SPACE MATRIX FOR UFONE

FS
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Aggressive

Conservative

Aggressive
(2.3,
1.083)

CA

Defensive

IS

Competitive

ES

Aggressive strategies of Ufone are:

Integration
Intensive
Related diversification.

BCG GROWTH-SHARE MATRIX FOR UFONE

Companies that are large enough to be organized into strategic business units face the challenge of
allocating resources among those units. In the early 1970's the Boston Consulting Group developed
a model for managing a portfolio of different business units. The BCG growth-share matrix
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displays the various business units on a graph of the market growth rate vs. market share relative to
competitors.

BCG Growth-Share Matrix

Ufone

On the vertical axis, market growth rate provides a measure of market attractiveness. On the
horizontal axis, relative market share serves as a measure of company strength in the market.
The growth-share matrix defines four types of SBUs:

CASH COW - (LOW GROWTH, HIGH MARKET SHARE)

A business unit that has a large market shares in a mature, slow growing industry. Cash cows
Require little investment and generate cash that can be used to invest in other business units.

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STAR - (HIGH GROWTH, HIGH MARKET SHARE)
A business unit that has a large market shares in a fast growing industry. Stars may generate
Cash, but because the market is growing rapidly they require investment to maintain their lead. If
successful, a star will become a cash cow when its industry matures.
QUESTION MARK - (HIGH GROWTH, LOW MARKET SHARE)
A business unit that has a small market shares in a high growth market. These business units
Require resources to grow market share, but whether they will succeed and become stars is
unknown.
DOG - (LOW GROWTH, LOW MARKET SHARE)
A business unit that has a small market shares in a mature industry. A dog may not require
Substantial cash, but it ties up capital that could better be deployed elsewhere. Unless a dog has
some other strategic purpose, it should be liquidated if there is little prospect for it to gain market
share.

Grand Strategy Matrix

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In Grand strategy matrix Ufone lie in 1st quadrant because it has strong competitive
position and rapid market growth..

Suitable strategies of quadrant 1st for Ufone are

1. Market Development
2. Market Penetration
3. Product Development
4. Horizontal Integration
5. Forward Integration
6. Backward Integration
7. Related Diversification

IE Matrix of UFONE:
The Internal-External (IE) matrix is another strategic management tool used to analyze working
conditions and strategic position of a business. The Internal External Matrix or short IE matrix
is based on an analysis of internal and external business factors which are combined into one
suggestive model.
The IE matrix is a continuation of the EFE matrix and IFE matrix models.
The IE matrix belongs to the group of strategic portfolio management tools. In a similar manner
like the BCG matrix, the IE matrix positions an organization into a nine cell matrix.
The IE matrix is based on the following two criteria:
1. Score from the EFE matrix -- this score is plotted on the y-axis
2. Score from the IFE matrix -- plotted on the x-axis
The IE matrix works in a way that you plot the total weighted score from the EFE matrix on the y
axis and draw a horizontal line across the plane. Then you take the score calculated in the IFE
matrix, plot it on the x axis, and draw a vertical line across the plane. The point where your
horizontal line meets your vertical line is the determinant of your strategy. This point shows the
strategy that your company should follow.
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On the x axis of the IE Matrix, an IFE total weighted score of 1.0 to 1.99 represents a weak
internal position. A score of 2.0 to 2.99 is considered average. A score of 3.0 to 4.0 is strong.
On the y axis, an EFE total weighted score of 1.0 to 1.99 is considered low. A score of 2.0 to 2.99
is medium. A score of 3.0 to 4.0 is high.
Your horizontal and vertical lines meet in one of the nine cells in the IE matrix. You should follow
a strategy depending on in which cell those lines intersect.
The IE matrix can be divided into three major regions that have different strategy implications.
Cells I, II, and III suggest the grow and build strategy. This means intensive and aggressive tactical
strategies. Your strategies should focus on market penetration, market development, and product
development. From the operational perspective, a backward integration, forward integration, and
horizontal integration should also be considered.
Cells IV, V, and VI suggest the hold and maintain strategy. In this case, your tactical strategies
should focus on market penetration and product development.
Cells VII, VIII, and IX are characterized with the harvest or exit strategy. If costs for rejuvenating
the business are low, then it should be attempted to revitalize the business. In other cases,
aggressive cost management is a way to play the end game.

Stage-3 (Decision Stage)

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Postpaid
Prepay
Ufone

31

The Quantitative Strategic Planning Matrix (QSPM)

The last stage of strategy formulation is decision stage. In this stage it is decided that which
way is most appropriate or which alternative strategy should be select.
Steps in preparation of QSPM
1. List of the firm's key external opportunities/threats and internal
strengths/weaknesses in the left column of the QSPM.
2. Assign weights to each key external and internal factor
3. Examine the Stage 2 (matching) matrices and identify alternative strategies that the
organization should consider implementing
4. Determine the Attractiveness Scores (AS)
5. Compute the Total Attractiveness Scores
6. Compute the Sum Total Attractiveness Score

Quantitative Strategic Planning Matrix (QSPM) of Ufone

Quantitative Strategic Planning Matrix (QSPM)
SELECTIVE STRATEGIES
Product Development
Market Penetration
Key External Factors
Weight
Attractiveness
Total
Attractiveness
Total
Scores (AS)
Attractiveness
Scores (AS)
Attractiveness
Scores (TAS)
Scores (TAS)

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Opportunities
1
Globalization
2
Marketing
3
Acquisition
4
New Product
Development
5
Northern Areas

0.10
0.15
0.08
0.06

3
4
3
3

0.30
0.60
0.24
0.18

2
3
2
3

0.20
0.45
0.16
0.18

0.10

0.30

0.20

Develop some new

franchises in remote
areas
7
Introducing Ufone
kiosk.
Just like ATM.
Threats
1
Old Stable
Companies
2
Attractive Packages
By Others
3
Price War
4
Government
Interference
TOTAL
Strengths
1
Investment

0.12

0.48

0.24

0.10

.30

0.20

0.10

0.40

0.30

0.10

0.30

0.20

0.04
0.05

3
3

0.12
0.15

2
2

0.08
0.10

0.10

0.40

0.40

2
3
4

0.10
0.12
0.10

4
3
3

0.40
0.36
0.30

3
3
3

0.30
0.36
0.30

0.07
0.10

3
3

0.21
0.30

3
3

0.21
0.30

0.10

0.30

0.30

0.09

0.27

0.27

0.05
0.08

2
1

0.10
0.08

1
1

0.05
0.08

0.05

0.10

0.10

0.04
1.00

0.08
6.27

0.04
5.02

High Growth Rate

Advertising
Net Work
Portability
5
Ufone Mobile
6
Resources Assets
And People
7
Location And
Geographical
Coverage
8
Government
Dealing
Weaknesses
1
Lack of Franchises
2
Coverage
3
Less Market Share
& behind the
demand
4
Weak MIS
SUM TOTAL
ATTRACTIVENESS
SCORE

1.00

Recommended strategy
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We select the two strategies Market Penetration and Product development. There
total attractive score is 5.02 and 6.27 respectively. The strategy Product
Development has big score thats why we select it.

Conclusions and Recommendation

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Ufone is 2nd largest cellular company in Pakistan. More committed towards growth.
Telecom industry is most growing industry of Pakistan and still huge investment required
for coverage. The market also has strong competition after the entrance of China Mobile
Company. Competitors are hiring professionals to entertain the consumers which is
resulting technological implementation and value added services. Consumer searches good
service with lowest call rates, although companies are minimizing call rates. This will
result more growth in the market. Ufone bring amazing packages to attract the customers.
Ufone promote their product through TV commercials, Newspaper, Radio, Internet etc. The
choice of people is Ufone because Ufone price level is low and affordable that every one
can say

Its all about U

Ufone could develop some new and innovative services to attract customers to increase
their revenues as well as it customers:

It should introduced International SMS packages

Ufone has strong financial position & more competitive advantages then other
cellular companies so it should more focus on its strategies.
It should pay more attention towards postpaid services

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