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Muhammad irfan 0334-7325705
As a student of course.strategic management – MGT 603 and all the preaching and guidance of my course teacher Mr. M. Shafiq. I hereby present my final project as required on firm operating in Pakistan belonging to telecom sector. i.e Ufone one of the leading cellular service provider alongwith value added service and business strategies. I also hereby present all the facts and figures which I gather about Ufone from newspapers, websites and from Ufone’s annual report. Due to my job and other secular activities I couldn’t be able to approach the firm directly, however with the help of my friends those close to Ufone. I prepared this project for consideration of approval of my learning and understanding about the said subject.
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.
TABLE OF CONTENTS
Introduction………………………………………………..1.0 Details of Project……………………………..1.1 Purpose of Project……………………………1.2 Findings……………………………………………………2.0 External & Internal Analysis……………….2.1 SWOT Analysis…………………………….2.3 EFE Matrix…………………………………2.4 IFE Matrix…………………………………2.5 Nine – Cell Diagram…………………….2.6 BCG Matrix………………………………2.8 Details of Product …….2.8.1 BCG Matrix……………2.8.2 QSPM…………………………………….2.9 Conclusion……………………………………………….3.0 Recommendation………………………………………4.0 References………………………………………………5.0
1.1 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 it’s 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. 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.
WARID Warid Telecom International is an Abu Dhabi based mobile telecommunication firm providing telephony services in Bangladesh, Pakistan and Uganda. ZONG Zong is the first International brand of China Mobile being launched in Pakistan. It is meant to empower and liberate the people of Pakistan in every nook and corner of the country
1.1 PURPOSE OF THE PROJECT The purpose of this project is to enhance the ability of understanding the important factors, matrix, strategy of business. And also to encourage to know more about the telecommunication sector in Pakistan. Ufone is one of my favorite cellular company. I have being using Ufone since 2004. Over the past few years Ufone developed dynamically. Ufone is the purpose of my project and my communication medium in life.
2.0 FINDINGS 2.1 INTERNAL & EXTERNAL ANALYSIS
INTERNAL ENVIORNMENT Human Resource Management Marketing Department Commercial Department Sales Department Finance Department Payroll Department Information Technology Department Engineering Department Administration Auditing Department Customer Care
EXTERNAL ENVIORNMENT Economic Conditions Social Conditions Culture Demographics Environmental Competitive Technological Consumer Attitude Globalization
2.3 SWOT ANALYSIS Strengths 1. Second Large Market Share Although Ufones market share has dropped due to current economic and political circumstancesit but is still very much competitive at 20 percent. 2. Worldwide Cheap call Experience As explained above even with Ufone’s recent decline they still have the market share and the experience to bounce back. They have been a nationwide company for nearly ten years now and have established themselves as the national leader for most of them. 3. Variety of Value Added Service Provide variites of value added services as compared to other cellular networks 4. Representing PTCL name As it is the subsidiary of PTCL. 5. Coverage on GT Road 60% Now covering Pakistan business highway upto 73%
Weaknesses 1. Behind on Excessive Demand This is Ufone's biggest weakness is not attempting to meet the demands 2. Poor Organizational Structure Centralized structure failed to provide proper guidance over instruction and policies 3. Stagnant Profitability As compared to financial assets, Ufone is not close to expected profitability 4. Overly Dependent on PTCL. Subsidiary of PTCL, it is dependent on PTCL
Opportunities 1. Can target Corporate It is obvious that GM was behind its competition with regards to the research and development of hybrid vehicles. However hybrid technology is still very much new giving GM the opportunity to once again become the automotive industry's leader in innovation and technology. 2. Continuing to Expand Globally. Ufone have the ability to expand globally. But due to current economic condition all its operation are on halt 3. Publicity and Marketing With the right marketing strategy they can acquire much more. 4. Develop New Value Added Service This is an opportunity that will never be satisfied, meaning that Ufone should always be attempting to keep improvising new valued added services, and as we know, what is in today will be out tomorrow. Threats 1. Govt. Interference Govt. Interference will always be treated as a threat in terms of taxes. 2. PTCL cellular license Ufone is nothing just a cellular license to PTCL. PTCL should provide more financial support to enhance profitability of its subsidiary company. 3. Pension Payouts. Part of this threat is their own doing and the other is simply unavoidable. Ufone is responsible for providing generous pension benefits to its employees, which at the time seemed like a great idea, however they are now experiencing problems as more and more people begin to collect. 4. Increased Health Care Costs Ufone, like many large companies with quality employee health care benefits, is experiencing a large financial hit that only gets worse as time continues as compare to other cellular firms.
2.4 EXTERNAL FACTOR EVALUATION
KEY EXTERNAL FACTOR OPPORTUNITIES 1. Can target Corporate 2. Continuing to Expand Globally. 3. Publicity and Marketing 4. Develop New Value Added Service THREAT 1. Govt. Interference 2. PTCL cellular license 3. Pension Payouts. 4. Increased Health Care Costs Weight .20 .20 .05 .10 .10 .05 .15 .15 1.00 Rating 4 4 3 3 2 2 2 2 w.score .80 .80 .15 .30 .20 .10 .30 .30 2.95
2.5 INTERNAL FACTOR EVALUATION KEY INTERNAL FACTOR INTERNAL STRENGTH Human Resource Management - Staff Remuneration - Staff Personal Finance Marketing Department - Marketing Planning - Prices Commercial Department - Promotion - Advertisement Sales Department - Target Market - Skilled Staff Finance Department - Earning Per Share - Royalties Payroll Department - Staff Salaries - Staff Bonuses Information Technology Department - Hardware - Network - Operations Engineering Department - Tier 3 level engineers - Highly skilled Administration - Day to day expenses - Correspondance Auditing Department - Financial Lookup - Cost and Management Customer Care - Tier 1 Level Support - Customer Support INTERNAL WEAKNESSES Human Resource Management - Staff Family Planning - Staff Pension Funds - Staff Training Marketing Department - Global Expansion Weight .10 Rating 4 w.score .40
.05 .10 .15 .05 .05 .05
4 4 3 3 3 3
.20 .20 .15 .15 .15 .15
.05 .05 .05 .15 .05
3 3 4 3 2
.15 .15 .20 .15 .10
2.6 Nine – Cell Diagram
THE IFE WEIGHTED SCORE 4.0 THE EFE WEIGH TED SCORE Human Resource Management - Staff Remuneration - Staff Personal Finance Marketing Department - Marketing Planning - Prices Commercial Department - Promotion - Advertisement Auditing Department - Financial Lookup - Cost and Management Can target Corporate Continuing to Expand 3.0 Globally 2.0 3.0 2.0 1.0
Sales Department - Target Market - Skilled Staff Finance Department - Earning Per Share - Royalties Payroll Department - Staff Salaries - Staff Bonuses Information Technology Department - Hardware - Network - Operations Engineering Department - Tier 3 level engineers - Highly skilled
Administration - Day to day expenses - Correspondence Customer Care - Tier 1 Level Support Customer Support Publicity and Marketing Develop New Added Service Value Human Resource Management - Staff Family Planning - Staff Pension Funds - Staff Training Marketing Department - Global Expansion Govt. Interference PTCL cellular license Pension Payouts. Increased Health Care Costs 1.0
2.8.1 DETAILS OF PRODUCTS
Ufone understands the value of words and the need to communicate effectively and efficiently at all levels of society, which is why company’s primary focus is on U. Ufone offers, Prepay & Postpay services in the Telecom sector.
The telecom market’s growing rate in Pakistan is higher than any Asian country. Ufone offers lower rates and better network then other already established cellular companies. All living standards have been captured by Ufone, like Students, Labour and Businessmen, etc. Ufone aims to provide with wider coverage, superior connectivity, clear signals & voice quality to their valued customers
RELATIVE MARKET SHARE
MARKET GROWTH RATE STARS
POST PAYS QUESTION MARK PREPAY CASH COWS DOGS
Weight KEY EXTERNAL FACTOR Human Resource Management Marketing Department Commercial Department Sales Department Finance Department Payroll Department Information Technology Department Engineering Department Administration Auditing Department Customer Care KEY EXTERNAL FACTOR Economic Conditions Social Conditions Culture Demographics Environmental Competitive Technological Consumer Attitude Globalization .15 .15 .10 .15 .05 .05 .05 .05 .05 .05 .15 .20 .20 .05 .10 .10 .05 .15 .10 .05
Strategy. 1 .60 .60 .20 .15 .15 .15 .15 .15 .15 .20 .15 .80 .80 .20 .40 .40 .20 .60 .40 .20
3.0 Conclusion In View of the following data Ufone is one of the telecom sector who need to produce more output by implementing new technologies, new tariffs, new consumer satisfaction value added service. Further, it is still the second largest cellular service provider in the country 4.0 Recomendations Should encourage new products like, Ufone PCO, Broadband services etc from its existing two services.
Suggested Strategies 1. Market Development 2. Market Penetration 3. Product Development 4. Restructuring 5. Retrenchment 6. Liquidation
5.0 References • • • • • Pakistan Telecommunication Website PTCL Annual Report Ufone Website Friends Teachers Handout,
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