Strategic Management Analysis Of Telecom Industry Commerce Essay Example

competitors include Telenor (23.4 million subscribers), Warid (16.38 million subscribers), Ufone (18.93 million subscribers), and Zong (6.76 million subscribers) – owned by China Mobile Company.

As of April 2010, Pakistan had a total of 97.6 million mobile phone subscribers.PTCL introduced its Mobile and information services divisions - Ufone and PakNet - in 2001 to expand its offerings.In 2006, six years later,the Government of Pakistan decided to privatize a portion (26%) of PTCL's shares successfully acquiring them was Etisalat.This study aims to examine PTCL's organizational structure and strategic management process through conducting a SWOT analysis.Additionally,recommendations will be given to enhance the strategic management processand decision-making capabilities.

Purposes and Aims:

- Conduct interviews and treatments with center and senior degree direction forces from the telecom industry
- Perform SWOT analysis using feedback received from the interviews and treatments
- Examine the organizational structure of Telenor and Ufone
- Engage mobile subscribers for feedback to define quality of service goals and key performance indicators (KPIs)
- Provide suggestions for improvement in strategic management process and decision making

Scope:

- Survey: Design questionnaires and conduct interviews with center and senior level management
- Data Analysis Tools: Strength Weaknesses Opportunities Threat (SWOT)
- Organizational Structure: Vertical Differentiation (Hierarchical Levels, Span of Control, Integrating Mechanisms, Centralization and Decentralization, Standardization and Mutual Adjustment, Professionalism)

Research Methodology

Document/Literature reviews:

The initial approach we employed in our research methodology was reviewing existing work closely related to our analysis. The analysis was conducted based on various documents, particularly those from other telecommunication companies. Different circumstances were taken into account along with the company's strategic direction and decision-making process. Both quantitative and qualitative surveys were used in this study.Qualitative analysis aims to provide

a comprehensive and detailed description, while quantitative analysis involves categorizing and numbering characteristics and creating statistical models. Qualitative analysis allows for nuanced distinctions without predefined categories and explores the reasons behind decisions. This justifies using smaller focused samples. Quantitative analysis is a systematic investigation that uses statistical, mathematical, or computational techniques to examine social phenomena. Its goal is to develop mathematical models related to these phenomena. In simpler terms, quantitative researchers ask narrow questions and collect numerical data from participants.

Official Perception studies:

These studies will be qualitative in nature and conducted by senior officials in the telecommunications industry. They will involve descriptive inquiries and analyze factors in the company's decision-making process through Key Informant Interviews.

Customer Satisfaction Surveys:

To cover a significant portion of our required research, we will distribute questionnaires through Random Selection Surveys. These surveys will be quantitative studies targeting a diverse group of individuals.

Literature Review

The literature review for this research article focuses on the strategic management procedure and organizational structure. The strategic management procedure includes defining an organization's strategies, which involves strategic planning, implementation, and evaluation. Throughout this process, organizations utilize strategic analysis tools to enhance performance and achieve quality targets.

On the other hand, the organizational structure determines the hierarchy and reporting within an organization. It can vary depending on factors such as the organization's scale and scope of operations. Traditional construction organizations typically employ functional divisions and sections in their structure. Examples include Line Structure (used in small organizations), Line and Staff Structure (used in large organizations), and Functional Structure (division based on individual roles).

In addition to traditional structures, there are divisional structured organizations that follow functional divisions but can be

categorized as Product Structure,
Market Structure, or Geographic Structure. Other types of organizational structures mentioned are Matrix Structure, Network Structure, and Team Structure.

A thorough literature review has been conducted to comprehend the concepts underlying the strategic management process and organizational structure discussed above. This review will aid in conducting surveys, SWOT analysis, and making recommendations based on the research findings.

Additionally, collaboration among managers at all levels of the organization is necessary in strategic management. This collaboration is needed to develop and implement strategies that align the organization with its environment and achieve its goals. The process of strategic management involves action and decision-making. It consists of three stages: strategic planning, implementation, and evaluation. These stages are supported by nine steps including Strategic Maps, Performance Measures, Initiatives, Automation, Cascade,and Evaluation.

Within the strategic management process, a SWOT analysis is conducted. This analysis evaluates internal strengths and weaknesses as well as external opportunities and threats. It helps identify the organization's competitive advantages, areas where competitors excel, utilization of available opportunities, and response to changes in the external environment.

The case study specifically focuses on conducting a SWOT analysis for Telenor Pakistan and Ufone Pakistan. Telenor Pakistan is a subsidiary of Telenor group which is an international telecommunications provider with over 179 million mobile subscribers worldwide as of 2010. In Pakistan alone, Telenor has achieved significant success with 30 million subscribers and holds the second largest market share after Mobilink.One notable strength of Telenor Pakistan is its introduction of the "Mobile Television" concept in the country. Telenor offers attractive bundles for different market sectors, including djuice for youth and price-conscious customers, as well as special packages for upper and elite class

customers. They utilize state-of-the-art technology, including the latest underground fiber optic network. Telenor Pakistan holds the second position in terms of market share and coverage, following Mobilink. They have also introduced free international roaming during the Hajj program. Currently, Telenor operates with over 30 million subscribers across Pakistan.

However, there are some weaknesses that Telenor Pakistan faces. In Pakistan, there is a lack of formal education institutes that provide training in networking and other core technical capabilities. Therefore, Telenor needs to train a significant number of their employees from institutions outside of Pakistan. The customer service centers do not meet national and international standards which results in many unanswered customer calls due to poor call center performance.

Moreover, Telenor Pakistan's prepaid connections are relatively more expensive compared to competitors like Warid Telecom and Ufone Pakistan. Additionally, Telenor's mobile television experiences buffering issues leading to poor visual quality. The franchise distribution system also falls short of expected standards which is a common problem among all mobile service operators.

Overall, record keeping is also an associated task that needs improvement within the company.Telenor has opportunities in the expanding Telecom industry to increase market share, attract subscribers, and expand coverage nationwide. Ufone Pakistan has implemented strategies to cater to different age groups and social categories, while also focusing on cost reduction and developing innovative products with attractive features. They aim to specialize in customer service. However, there are threats that Ufone faces such as the monopoly of PTA (Pakistan Telecommunications Authority) and their preference for state-owned providers. PTA can modify telecom sector services at any time. Additionally, there is intense competition in the oligopoly market with kinked demand. Implementation of WTO

policies may lead to open and competitive pricing in the telecom services sector as well as an imbalance between input prices and end products. In terms of its SWOT analysis, Ufone operates under Pakistan Telecommunications Company Limited and started its operations from Islamabad on January 29, 2001. It has successfully attracted customers by expanding coverage area through adding new cities and highways/motorways. After PTCL's privatization, Etisalat acquired 26% of Ufone shares.Ufone has invested around $65 million rupees to establish advanced technical infrastructure, aiming to provide fast data services and high-quality voice calls. The company's focus is primarily on the middle class, offering low rates and various Urdu-named bundles like Jazba. Ufone strategically expands its customer support through a wide network of traders and commercial establishments. One of Ufone's strengths lies in its value-added services and strong connectivity capabilities. As a subsidiary of PTCL, Ufone offers affordable prices to its users. It was also the first mobile operator in Pakistan to introduce prepaid roaming, MMS, and GPRS services. The popular prepaid bundles attract the youth market. GPRS Roaming is accessible in 85 countries with over 115 Live Operators. Compared to other operators, Ufone has a robust e-marketing department. However, due to its centralized organizational structure lacking proper management and policies, Ufone struggles to meet customer demands. Being a subsidiary of PTCL, it relies on them and the government for policies. Additionally, their franchise network faces challenges with increasing subscribership and lacks innovative services compared to competitors. While coverage is good in the South region, it is poor in the North region. Privatization to Etisalat created internal issues impacting employee satisfaction concerning wages.
Despite its shortcomings, Ufone has

the potential for global expansion if not hindered by Pakistan's current economic situation. By implementing precise marketing strategies and planning, Ufone can increase its subscriber base. The growing demand for value-added services due to advancements in IT and telecommunications presents an opportunity for Ufone to stay competitive in the market. One potential improvement could be the launch of "Ufone booths" similar to ATM machines that exclusively offer services for Ufone clients while expanding their reach globally.

To compete with Mobilink and Telenor, who are expanding their franchise networks, Ufone should also expand its own franchise network in distant countries. Additionally, extending network coverage to the Northern regions of the country where there are fewer service providers could attract a large number of people and increase subscriber numbers. However, there are several threats that Ufone must address.

Government intervention in terms of taxes poses a challenge. Furthermore, PTCL should provide more financial support to enhance the profitability of its subsidiary company - Ufone. Providing good pension benefits to employees is another responsibility of Ufone but has become problematic as a large number of people now seek these benefits, resulting in financial strain for the company.The opposition to the installation of towers in residential areas due to health concerns is causing problems for both the economy and Ufone. The current market downturn is also unfavorable for all businesses, including telecommunication. The organizational structure of Telenor Pakistan consists of eight departments overseen by Senior Executive Vice Presidents or Executive Vice Presidents. This functional structure promotes cooperation between lower staff and managers, with subdivisions within each department managed by respective managers. Each executive in charge is responsible for related services, and

the wide span of control facilitates communication and coordination throughout the organization.Figure 2 below shows the organizational chart of Telenor Pakistan, and the complete organizational structure can be found in appendix Angstrom. The organization is divided into seven levels based on tasks and responsibilities. Despite potential changes in duties, staff members have a clear understanding of their job responsibilities from the start. The hierarchical structure, combined with an open culture at each level, helps minimize communication and motivation issues within Telenor Pakistan.

While demotivation is uncommon throughout the organization, certain departments such as Customer Relationship and Customer Service Center may experience frustration if service quality targets are not met. Managers in these departments intervene to resolve problems, while employees are encouraged to share their ideas with higher-level management.

There are boxes placed throughout the organization where employees can anonymously provide their thoughts, suggestions, and concerns. The Communications Department reviews these ideas for implementation potential and discusses them with relevant employees. Additionally, there is a formal platform called SEED at the group level that promotes innovation and allows for discussions on new revenue concepts and cost effectiveness. Employees are encouraged to contribute and submit their innovative ideas.The organization implements feasible shared ideas and rewards employees accordingly. Figure 3 displays the organizational structure of Ufone Pakistan, which includes the Board of Directors, Chief Executive Officer, Project Director, Marketing & Sales, Finance, Information System, Customer Care, Engineering, Quality Assurance, Information Technology, HR & Admin. This structure ensures formal control over every employee. Ufone follows a decentralized bid concatenation system where individual responsibilities and duties are assigned to each force within the organization. The company adopts a thin or horizontal structure

that facilitates the flow of information. Ufone is divided into different sections with their own heads who are interconnected. Departmentalization is consistently practiced at Ufone with different sections working within their functional divisions to contribute to business success and achieve set targets. There are 83 sub-departments at Ufone that efficiently collaborate for smooth operation of the organization. The organizational structure comprises a Board of Directors reporting to the CEO who oversees eight major sections: Finance, Marketing, IT, Engineering Strategic Planning Human Resource and Sales Departments. Case studies have been conducted on both Ufone and Telenor in terms of strategic management process and organizational structure.In terms of market share among subscribers, these two organizations have been closely competing. Recent studies reveal that Telenor Pakistan has achieved a significant milestone with 30 million subscribers and holds a 26% market share. This growth can be attributed to their technological advancements and effective strategic management.

On the other hand, Ufone has experienced a decline in their subscriber base and currently holds a 19% market share. The decline can largely be attributed to decision-making processes at the executive and senior management levels. Being a subsidiary of the government-owned Pakistan Telecommunications Company Limited (PTCL), Ufone's policies are determined by government officials.

However, despite the expectation of significant changes brought about by the privatization of PTCL, many operational and strategic management improvements were not implemented by the Etisalat group which owns both PTCL and Ufone.

Telenor has surpassed Ufone in terms of subscriber base, technological growth, marketing, and network coverage. This puts Telenor in close competition with Mobilink, an established organization in Pakistan's Telecom Industry.

One notable difference between Mobilink and Telenor is the number of

postpaid connections used by corporate and business users. Compared to Mobilink, Telenor has fewer post-paid subscribers due to their expensive prepaid connection offering fewer value-added services.

Telenor operates with a functional structure where each department has defined functions.It is advisable for organizations to adopt a hybrid structure that combines functional and horizontal structures. This will help improve coordination between cross-functional teams and enhance customer service. Furthermore, this hybrid structure should be designed to easily accommodate necessary changes within a horizontal structure. As Telenor is part of the Global Telenor Group, they should consider implementing an employee exchange program for middle and senior management. This program would facilitate the sharing of managerial and technical skills and expertise. Additionally, offering stock options could serve as a motivational tool for employees.