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Strategy is the direction and scope of the organization for a long term which achieve
competitive advantage in a changing environment through the resource allocation with the
aim of fulfilling stakeholder expectation (Johnson et al, 2008). The strategic planning is the
process of achieving long term organizational objectives through the setting of strategies.
Sri Lanka Telecom
Sri Lanka Telecom PLC (SLT) is the premier telecommunication services provider in Sri
Lanka. And one of the countrys most valuable blue chip companies with an annual turnover
in excess of Rs 40 billion. It is a biggest telecommunication company in Sri Lanka with about
Rs. Eight hundred million profit and 32% market share. The Company provides a huge range
of domestic and international services which includes fixed & wireless voice, internet and
data services that cater to a wide audience comprising of both corporate and domestic
customers. Sri Lanka Telecom now operating in 330 regional offices in Sri Lanka.
Sri Lanka Telecom started its operations in1858 with the establishment of telegraphic circuit
between Colombo and Galle. In 1991 Sri Lanka Telecom became a corporation. In 1997 it
was privatised. In 2008 Sri Lanka Telecom listed in Colombo Stock exchange. Now 49.5%
owned by the government. The achievements of Sri Lanka Telecom are:
Long term foreign currency rating B+
Long term local currency rating BB-
National long term rating AAA.
Sri Lanka Telecoms Vision
"All Sri Lankans seamlessly connected with world-class information, communication and
entertainment services."
Sri Lanka Telecoms Mission
"Your trusted and proven partner for innovative and exciting communication experiences
delivered with passion, quality and commitment"
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Sri Lanka Telecom Value
Customer Caring- We put our customers at the centre of everything we do.
Trustworthy - We are true to our promises.
Innovative - We continuously invent new opportunities through creative thinking.
Responsive - We are ready to listen and act promptly.
Teamwork - We are one team with a common purpose to achieve common goals.
Excellence - We are committed to exceptional performance.
Results Driven - We are committed to enhancing shareholder value.
Goals and objectives
Promoting profit and performance driven culture.
Stake Holders
Share holders
Secretary to the Treasury, Global Telecommunications Holdings, Employees' Provident Fund
Sri Lanka Insurance Corporation Limited, National Savings Bank, Bank of Ceylon,
Employees' Trust Fund Board, Alchemy Heavy Metals (Pvt) Limited, Eagle Insurance
Company Limited, Deutsche Bank, Ellawala Exports (Pvt) Limited, The Ceylon Chamber of

Board of Directors
Mrs. Leisha de Silva Chandrasena, Sumith Wijesinghe, Sidath Fernando, Sandip Das, Chan
Chee Beng, Je_rey Jay Blatt, Yoga Perera.
SLT Service Ltd, Mobitel Pvt Ltd, SLT Hongkong Ltd, SLT Publication Pvt Ltd, SLT
Manpower solution Pvt Ltd, SLT Vision com Pvt Ltd, Sky network Pvt ltd, NIT
Communication Corporation.

Capscan, Avocent IT Operations Management Solutions, Absolute Software Security
Solutions for Mobile Computers and Smartphones,DataFlux Data Management Technology,
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Geodis Wilson High Tech Freight Management Services, Hitachi Data Systems - Storage
Economics, M86 Security - Web and E-mail Security Products.

Bank of Ceylon, Peoples Bank, Commercial Bank, HSBC Bank, Hatton National Bank PLC,
NDB Bank.

Dialog Telekom, Etisalat, Hutchision, Lanka Bell, Suntel.

Sri Lanka Government.
Organizational Structure
Chair Person


Chief HR
Marketing &
Sales Officer
Director HR
HR Assistant
System &
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(Fig 1.1)
Figure 1.1 showing the current existing organizational structure of Sri Lanka Telecom. It is a
divisional form of structure which is providing who is responsible for whom under each
division. Mainly there are four divisions shown in the figure 1.1 which are information,
finance, marketing and sales and human resource division.

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Q.1. (i). An analysis of the internal and external environment affecting the company
Internal analysis
Internal analysis provides the information about the organizations ability to compete and
deliver the strategy. Lewis introduced 6 factors to analyse the internal environment of the
company. The internal environment analysis of Sri Lanka Telecom is as follows
Management Capabilities
The management team members in Sri Lanka Telecom have MBA. Most of them have
masters in mass media and telecommunication. All of them have more than 10 years
experience in that field.
SLT has a good brand name and strong market position with 32% market share. It uses
powerful advertising technique to reach everyone. It has opened more than 100 regional
offices in Sri Lanka. It placed as one of the top 5 company among 50 top business entities.
Product and Services
SLT provides good quality product and services with lower rate. It has succeeded the digital
quality so it added more than 80000 new customers this year.
Information Technology
SLT is a telecommunication industry so absolutely it has best technological facilities such as
computer and internet etc. Also services include downstream speed up to 4Mbps.
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SLT is one of the largest capitalised companies in Colombo stock exchange with annual
turnover more than Rs. 40 billion. Reserve capital is currently Rs. 46,599 million. Assets are
available more than a limit to meet the obligations. Good financial and cash flow statement.
Human Resources
SLT has the largest workforce with experience. Employees are well trained and deployed for
better productivity. Performance evaluations are introduced to motivate employees and online
attendance monitoring system introduced to improve efficiency. Many rewarding and
satisfying programmes for long term are available.
External analysis
PESTEL and porters 5 forces analysis are used to analyse the external environment of an
organization. Porters five forces include the supplier bargaining power, buyers bargaining
power, threat of entry, threat of substitute and competitive rivalry (Robert, 2008). PESTEL
provide the comprehensive list of factors in external environment which influence the success
or failure of strategic planning. (Johnson et al, 2008). For the Sri Lanka Telecom external
environment analysis I am going to use the PESTEL model.
SLT is paying 35% tax to the government currently tax rate expected to increase it will
reduce the profit of SLT significantly. (SLT Annual report, 2010). So SLT planned to
promote it product and services effectively to increase the profit margin. SLT has more
government support in its activity because 49.5% owned by the government.
Inflation in Sri Lanka in 2010 is measured to 5.9% (Central bank of Sri Lanka, 2010) it has
decrease compare to last year. Last year inflation is about 23%. Improvement in economy
increases the disposable income so SLT can increase it profit. It happens because of the end
of ethnic war. And also share price of Colombo stock exchange rising rapidly so SLT has
increase its market share in Colombo stock exchange.
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SLT products are mostly used by the business people. Therefore, SLT introducing many
features and facilities on its product which are useful for business people. In Sri Lanka
literacy level recorded to 93% (Legatum institute, 2010) it will help to increase the sale
because information technology used by mostly educated people and if people have education
at least some extent only can use technological product.

Because of technological change SLT facilitate online shopping for the customer. It has
reserved some amount to adopt new technology changes because it is a telecommunication
industry. It adapts and changes the speed of internet and other services.
According to finance act no 11 of 2001 international telecommunication operators required
contribute US$0.038 per minute to the government. According to the gazette information
levy will be credited as incoming local access charge.
SLT offers several programmes to preserve the environment because environment is
unpredictable and uncontrollable by anyone. For example tsunami in 2004 was affected Sri
Lanka and other countries economy severely. SLT focus on developing a spirit of
environmental consciousness among the countrys youth. Also it has been motivating to raise
the awareness of endemic species amongst people.

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Q.1. (ii). Briefly state any major changes took place based on the affect of external
Sri Lanka Telecom has launched SLT broadband service in 2007 due to the technology
changes. Technology is a miracle external environment. It changes continually. As a
telecommunication industry Sri Lanka Telecom is very much influenced by the technology
changes. It has started with telegraphic circuit in 1858 then it launched cable service,
telephone service, telex and wireless service etc. because of the technology changes. SLT
broadband is a fast and permanent connection to the internet with high speed bandwidth. It
also converts the regular phone into high speed digital link and translates voice and data.
Nowadays everyone using internet for various purpose. It helps to make human activities
easy and fast. (ADSL) Asymmetric Digital Subscriber Line facilitates and support to
download in different speed. Normal analogue modem facilitate the internet with the speed of
maximum 56 kbps but Sri Lanka Telecom broadband Asymmetric Digital Subscriber Line
has the speed of above 512kbps. Also Sri Lanka telecom Provide 7 different types of broad
band packages to the customer. Online advertising also we can take the changes in the Sri
Lanka telecom promotional activity. It is also an effect of technological changes. World
widely everyone using online services and internet facility so everyone used to advertise their
brand in online. Sri Lanka Telecom also spends more in the online advertisement and it has
facilitated the online shopping due the changes of information technology.

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Q.2. Review the existing business plan of the chosen company and review the
competitive position and current business strategy.
Current business strategy of Sri Lanka Telecom
Sri Lanka Telecoms strategies are developed to drive its journey to the future. It has
developed a market oriented strategy. Sri Lanka Telecom is building a relationship with the
customer and facilitating individual as well as businesses, through different and price
attractive product availability. Win the telecommunication market through the market
convergence. Providing high speed broad band services. Sri Lanka Telecom now
concentrating on increasing the penetration in all the customer segments by improving the
sales mix to reduce the disconnections and moves. Sri Lanka Telecom has opened over 330
base stations to provide effective CDMA services to the customer. In broad band it has
introduced many packages to different group of customer with attractive prices. It also
maintaining high speed and superior ADSL access in broad band. Sri Lanka Telecom using
the price reduction strategy in all its product and services. Also it used NGN architecture to
improve the coverage. It providing 24 month contract internet service with low price to
maintain the customer. Also providing free CLI and other value added features for its mega
office customers.
Current business plan of Sri Lanka Telecom
Sri Lanka Telecom currently planned to increase the demand for fixed PSTN services so that,
it has plan telecommunication infrastructure network to bridge the north and east part of the
country. It has currently under discussion to introduce the SKA interconnection system
between operators. Sri Lanka Telecom also planned to introduce the telecommunication
services in the northern and eastern provinces of the country because the people in that
province could not get telecommunication facility because of the continuous war about 30
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years. Sri Lanka Telecom aim to enter in to the global IP market by expanding business
relationship. It has also planned to reduce the call charges to the Middle East country because
of most of the Sri Lankan migrate to Middle East countries for employment. Sri Lanka
Telecom also planned to introduce CDMA broad band to the local market. It is also planned
for new tariff for CDMA telephone connections. Planned to took afford towards the business
diversification strategy to increase the profit growth within a country.

Competitive Position of Sri Lanka Telecom
We can review the companys competitive position by using various models and techniques
such as Industry Life Cycle, Boston Consulting Group Matrix and Strategy Clock etc. I am
going to analyse the competitive position of Sri Lanka Telecom by using Boston Consulting
Group Matrix (BCG) and Industry Life Cycle.
Boston Consulting Group Matrix
It is classified all companies strategic business unit according to the growth rate and market
share (Kotler, 2008).
High relative market
Low relative market


Question mark

Cash cows

(Fig 2.1 )
The above chart showing 4 different level of competitive position.
Stars High market share high market growth.
Question mark Low market share high market growth.
Cash cows - High market share low market growth.
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Dogs Low market share low market growth.
Accordi g to this Boston Consulting Group Matri anal sis Sri Lanka Telecom is in the
position of cash cows because it has about 40% market share (SLT annual report 2010) in
the telecommunication industry. SLT is number one telecommunication industry in Sri
Lanka. But compare to last year it has show 2% revenue decline. Profit also decreased by 6%.
So it shows the high market share and low growth rate.
Industry Life Cycle

( Fig 2.2 sources from: quick MBA 2010)
It considers the general development pattern of the industry. It examines the industrys
structural changes in the long run (Robert 2008). There are 5 stages a industry passing
through development or introduction, growth, shakeout, maturity and decline. First and
second stage industry faces low rivalry and low entry barrier.
The industry life cycle concept is proposes that the industries start with the beginning of
development stage then go through the period according to the growth. It shows simply what
are the stages its passes through in whole period it is existing. Each ofthese stages is the
implication of the Porters five forces analysis. The first one is development stage here
company faces low competitive rivalry and high differentiation product. The five forces are
weak in this stage. Next is high growth with rivalry. High market opportunity is there. There
will be entry barrier. Next is the shake out stage. The growth rate of the company started to
decline so increasing rivalry and some exit. The next is maturity stage here the entry barriers
will increase buyers become strong and entry barriers. Final stage is decline. Extreme rivalry
and high exit barrier.
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According to the industry life cycle (Fig 2.2) Sri Lanka Telecoms competitive position is in
maturity stage. Because it has already passed through the development and also it achieve the
growth now it has build its brand image to customer and catch up high market share but now
the growth rate is started to decline. Now in this level its needed a new strategy to increase
its growth. Profit is in under pressure. Research and development strategy is also low in this
stage (Richard, 2006).

Q.3. Identify and evaluation of alternative strategies that would consist of companys
goals and objectives and select an appropriate future new strategy.
According to the analysis of competitive position of the company I can suggest two possible
alternative strategy options under ANSOFF matrix (Product market expansion grid). Before
that we will look at about the ANSOFF matrix. It is a most popular method used by the
organizations to attempt to grow their business. This Product Market expansion grid
support to identify the possible Product and market strategy option available to the
organization. It shows 4 possible options which are shown in the figure below.
Product Market expansion grid (ANSOFF Matrix)
Existing product New product

Market penetration

Product development

Market development

(fig 3.1)
Market penetration It means the firm selling more existing product in the existing market.
To achieve this strategy it need heavy advertisement sales promotion and price reduction to
increase the sales. It can be achieve through the economy of scale.
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Market development it means the firm selling its existing product but in the new market.
New market can be a new market segmentation or new geographical area like other country.
It is needed a market research to indentify a new market.
Product development this is an approach of developing or modifying a product. It can be a
completely new product or the existing product with some modification. Through that a
company can strengthen its competitive position in the market.
Diversification it is implies a new product to the new market. It is a very costly option. It is
needed a high amount of investment and also it is very risky too.
There are 2 possible alternative strategies to support Sri Lanka Telecoms goals and
objectives which are Market development and product development. Let us evaluate both
1. Market Development
Sri Lanka Telecom has high market share but low market growth rate so to increase the
growth it can enhance its market coverage. Through the market development it can increase
the sales and so that it can increase the profit. In Sri Lanka at about 2.7 million populations in
northern and eastern province had no telecommunication solution (SLT Annual report, 2010).
It is because of the ethnic war. These areas were under control of LTTE but now 30 years
ethnic war came in to end. Now those areas are under development process. So, there is a
new market available to Sri Lanka Telecom within the country. It is not a very difficult task
to cover these geographical areas. There is relatively very low political and legal requirement.
According to Sri Lanka Telecoms vision mission statement it has mentioned to provide
world class quality telecommunication services to the customer and become market leader in
telecommunication service. So to achieve the vision and mission market development will
support. So, this is a suitable strategy to Sri Lanka Telecom.
Sri Lanka Telecom can assure the profit growth through the market development because, of
new market segment available and people will be use the telecommunication services as it is
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very much useful for the communication as well as education purpose. There is a very lower
level risk in this strategy because it will take short time period to implement this strategy. It
also involve low relatively cost as it already in a position to provide service in Island wide.
Sri Lanka Telecom is a leading telecommunication service provider in Sri Lanka so people
will believe the brand name. Market development also will create new employment
opportunity in the market. Share holder will have positive reaction because it will not affect
their ownership. Currently government spending high amount on these area, to develop the
economy as well as living standard of the country. So Sri Lanka Telecom will also get
government grants to provide service to those areas. So this is a acceptable strategy.

Sri Lanka Telecom has a reserve capital of Rs. 46,599 million in its financial statement. Also
it shows a good financial position with Rs. 778 million profit and Rs. 90,308 million total
assets. It has the largest work force and experience management team. Effective and good
cash flow statement is available. It has good will. Also it maintains good liquidity and equity.
It has financial ability to spend on market research also. So this strategy is also feasible.
2. Product development
Sri Lanka Telecom is currently providing telecommunication services. It has high market
share as mentioned. Because of it has low market growth the other strategic option it can uses
is product development. Peoples taste and perceptions are changing continuously according
to the environment change. So customers prefer to experience new product. Generally
consumers are crazy about new products with high value and low price. Sri Lanka Telecom
can develop and provide completely new product or service or it can also provide the product
and service by modifying by speed and with other new technological features. It has already
create or maintain a good brand name so, that will support to market the new product in the
market. Sri Lanka Telecom also created a good customer relationship already. Also Sri Lanka
Telecom created brand and customer loyalty so this strategy is suitable to Sri Lanka Telecom.
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Under the industry life cycle analysis Sri Lanka Telecom coming under the maturity stage.
Therefore, product development is acceptable in this stage. It will help to achieve the profit
growth. Through the product development it can ensure the profit and success because
technology is continuously changing if the product and service adopt the changes and
improve the features and process according to the new technology only customer prefer to be
a permanent customer of a company. In the telecommunication field changes are important to
win the market. For an example Coca Cola Company has introduced diet cock. Diet cock is
product development strategy of that company but it is not a completely a new product it is a
modified product. Using this strategy coca cola still maintain its market share and market
growth. This is because of the brand name. Likewise Sri Lanka Telecom also has the brand
name so this strategy is also acceptable.
Sri Lanka Telecom has proved its financial ability through its financial statement. According
to the Sri Lanka Telecom annual report (2010) it has recorded largest work force so the
human resource and financial resource are in optimum level to support the product
development strategy. As Sri Lanka Telecom is a telecommunication industry it has the
information technology resource also. Favourable and good cash flow statement shown in the
financial statement. Therefore this strategy is also feasible to Sri Lanka Telecom.
According to the evaluation of the alternative analysis I can recommend that market
development strategy is the most suitable strategy than the product development. There are
many opportunities to the Sri Lanka Telecom to enter into the new market. Sri Lanka
Telecom already has the brand name so, it is easy and possible the market development
strategy. Also there is a huge market in Eastern and Northern provinces. In Sri Lanka at about
2.7 million population living without the telecommunication solution. So it is the opportunity
for Sri Lanka Telecom to implement the market development strategy.

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Q.4. Construct a new suitable structure for a strategy plan ensuring the participation
of all stakeholders.
New Organizational Structure

Chief HR
Marketing &
Sales Officer
Director HR
HR Assistant
CEO in
CEO in
CEO in
CEO in
Research &
Chair Person
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(Fig 4.1)
Under the every provincial CEO the structure will be same as which is shown under the CEO
in west that mean under the CEO East there will be a chief information officer, chief finance
officer, chief marketing officer and chief HR officer likewise same structure will be there for
CEO in North and CEO in south until the staff or the bottom line of the structure.
When there is a change in a strategy it requires to change the structure of the organization
according to the new strategy because to implement the new strategy effectively. There
mainly four different types of organizational structures used which are functional structure,
divisional structure, strategic business unit structure and matrix structure. According to the
new strategy of Sri Lanka Telecom I have change the existing structure. The new structure is
the divisional form of organizational structure.
The new strategy I have recommended for Sri Lanka Telecom is market development that is
existing product to the new market. So, I have right size the existing structure and restructure
it. Here I have added three other CEO for other province of Sri Lanka. According to the
existing structure one CEO controlled west and south part of Sri Lanka but, now there is an
opportunity to enter into the east and north part of the area. Because, of the end of 30 year
ethnic war. One CEO cannot control all the activities of all area. According to my market
development strategy the market developed to cover all the part of Sri Lanka I recommend 4
CEO for four main parts that is East, West, South and north province of Sri Lanka. In the
existing structure we can see that there is marketing manager under the responsibility of
Chief marketing and sales officer. I have included another manager who is market research
and development manager under the responsibility of Chief marketing and sales officer.
Market research and development manager is required for the research the market and find
out the market opportunity and also to find the opportunity to implement the market
System &
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development strategy. Marketing manager along cannot contribute for the new market
development strategy so there is a requirement for new manger to implement the market
development strategy effectively and efficiently. So that market research and development
manager can work with the marketing manager to identify and implement the opportunity for
the new market development strategy.
Under staff there will be more staff recruit to implement the strategy. Because of the market
of Sri Lanka Telecom going to be expand to all the area in Sri Lanka there is a requirement
for more staff and also the management team. Because there will be separate CEO and other
managers for other four part of the country.

Q.5. Analyse how you would plan for the implementation of strategy in the perspective
of following issue.
Strategy plan
Strategy plan is the written document of the strategic planning process of the company. It
includes the companys objectives as well as the strategy for achieving the objectives. It
defines the strategic approach of the business. The strategic plan will be prepared by
analysing the internal and external factors which have influence in the business. It will be
mostly successful because it takes the participation of the organizational members. The key
steps involve in the strategic planning are as follows:-
1. Defining corporate mission
2. Setting corporate objectives and goals
3. Designing the business portfolio
4. Designing the key business unit strategy
5. Functional plan.
The strategy plan of Sri Lanka Telecom
Corporate mission
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Become a market leader of Sri Lanka in telecommunication service by providing a high
quality services and provide the opportunity to experience the telecommunication service to
the customer.
Corporate objectives
Create and develop brand recognition
Achieving profit growth
Increase the market share
Providing best quality services with lower price.

Business portfolio
Sri Lanka Telecom providing service under one business it providing telephone call service,
postal service, internet services.

Business unit strategy
Market development is the Sri Lanka Telecom strategy to achieve its objectives.
Functional strategy
Under marketing it has develop many promotional strategies to support the business strategy.
And it has selected the north and east province to enhance its market.
Strategy can be achieve through cost reduction, improved quality of product and services,
through the enhancement of customer preference and the increase of competitive leverage
(Henry et al, 2003).
Resource Requirements
To implement the strategy of the business there is a requirement to allocate the resources.
Because resource are limited so we have to allocate the scare resources to implement the plan
there are four main resources required for the strategy implementation which are financial
resources, physical resources, human resources and technological resources. Sri Lanka
Telecom has proved their financial resource through its financial statement. It has favourable
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and enough reserve capital and also it has the ability to finance the business through the
internal as well as external sources. Technological resources it has in optimum level because
it is a telecommunication industry so it used to adapt new technology to provide quality
services to the customer. It has sign an agreement and contract with other technology supplier
to get technology resources in low price. Sri Lanka Telecom has high labour force. Sri Lanka
is rich with labour force and labour is also very cheap in Sri Lanka so, Sri Lanka Telecom
can get human resource from its country with lower rate and also there are many skilled
labours who are highly skilled in information technology and other technical work. Sri Lanka
Telecom also has physical resources to implement their strategy. So Sri Lanka Telecom needs
to allocate these resources efficiently and effectively to support the achievement of its
objectives through the implementation of the business strategy.
Targets and timescales
Timescale should be selected for the strategy implementation because if we set the time target
then it is easy to control the strategy. Control is the final step in the strategy implementation
if we set the time target we can check whether it is achieved or it is in the correct path of
directing to achieve the objectives. So according to the Sri Lanka Telecom new strategy it has
set the timescale for three years to achieve the objectives. It has to spend some time into the
market research and it has to made technical work like setting coverage etc. So it will be take
3 years to achieve its new strategy.

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Johnson, G. Et al (2008) Exploring Corporate Strategy. 8
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ed. England: Pearson education ltd.
Legatum institute (2010) literacy rate. [Online]. Available from: [Accessed 26 January 2010].
Richard, L. (2006) Corporate strategy. 4
ed. London: prentice hall.
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Robert, M. (2008) contemporary Strategy Analysis. 6
ed. UK: Wiley.
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Sri Lanka Telecom [no date] census report. [Online]. Available from: [Accessed 4 November 2010].
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November 2010].