Strategic Management Analysis of Ufone

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STRATEGIC MANAGEMENT ANALYSIS 

UFONE OF PAKISTAN CELLULAR INDUSTRY

28 DEC 2011

SEQUENCE OF PRESENTATION• An overview of Pakistan Mobile Industry• Vision Statement of Ufone• Mission Statement of Ufone• Analysis of Mission Statement• IFE  Matrix• EFE Matrix• CPM Profile• SWOT Analysis/Matrix• SPACE Matrix

AN OVERVIEW OF PAKISTAN CELLULAR INDUSTRY

• 5 M cellular subscribers in 2004• Now 108.89 M subscribers in 2011• Initially Voice was the focus• Now Data & VAS are also the focus• 3G licensing policy under active considerations• Cellular Tele density increased from  3.3% (2004) to 62.5% 

(2011)• This means 6 out of 10 people own cellular connection• Coverage of about 92% of the land area• More than 10,000 cities/towns/villages are under the 

umbrella of cellular services• PTA is the regulatory authority

Ufone Profile

• Pakistan Telecommunication Company Limited(PTCL),a wholly owned subsidary of PTCL

• Started its operations in 29 Jan 2001 under the brand name of “Ufone”

• As a result of PTCL’s privatization,Ufone became part of Emirates Telecommunication Group (ETISALAT) in 2006 

Competitors of Ufone• Mobilink, the Pakistani unit of Egypt-based 

telecommunication company Orascom. It has been operating in Pakistan since 1994 with 31% market share now

• Norweigen Telenor, has started its operations in 15 Mar 2005 with 21% market share now

• Warid, owned by the Abu Dhabi group of the United Arab Emirates and sister-concern of Wateen group started its operations in 15 May 2005 having a billion dollar investment in Pakistan. About 17% market share

• CM Pak(Zong), formerly Paktel, was the latest target of foreign acquistion. After it got acquired by China Mobile,it was renamed as Zong, having 6% market share

25%

21%

17%6%

Cellular Subscribers Market Share    Dec 2010

Cell Sites

• The hallmark of the success of any service pertain to its geographical presence and coverage in a country

• All mobile operators have collectively erected 30,169 cellular sites by end 2010 in different geographical locations of the homeland

Vision Statement

“ To be the leading telecommunication services   provider in Pakistan while exceeding 

shareholders value and employee expectations”                       

Mission Statement

   “To be the best cellular communication option  

for U. We aim to provide U  with quality coverage, superior connectivity, clear signals and voice quality. where ever U are, U-fone      keeps U connected”

Mission Statement Analysis• Customers           Y• Product/services           Y• Markets           Y• Technology           Y• Concern for growth/survival           N• Philosophy           N• Self-efficacy           N• Concern for society           N• Concern for employees           N

Proposed Mission Statement

 “To be the unmatchable mobile system of communication in Pakistan, thus providing the best values to our customers, employees, business partners and shareholders”

Ufone Product Line

• Prepay

• Postpay

Ufone Packages & OffersPrepaid Packages Postpaid Packages

U-Won Supplementary Connection

Uth Package Boundless Roaming

Lady’s Package Black Berry

Kisan Package U-fone Conference Call

Panch ka Pandra International MMS

Bundle offer IDD Bucket

SIM lagau offer Ur Edge

U-fone member banau offer

Prepaid Roaming

International MMS

U Share

U Loan

Sau Par do Sau

Internal Factor Evaluation (IFE Matrix)

Sr No Strengths Weight Rating Score

1 Network Coverage (Geographic) .08 4 .32

2 International Roaming  .06 4 .24

3 Pioneer of MMS/GPRS .04 3 .12

4 License for AJK & NAs .02 4 .08

5 Quality Coverage (Connectivity) .09 3 .30

6 VAS .05 3 .15

7 Lowest Prices .10 4 .40

8 2nd Largest Market Share .08 3 .24

9 Representation of PTCL (as subsidiary) .03 3 .09

4= Major Strength3= Minor Strength

Internal Factor Evaluation (IFE Matrix)

Sr No Weakness Weight Rating Score

1 Behind on Excessive Demand .02 1 .02

2 Poor Organizational Structure .05 2 .10

3 Stagnant Profitability .04 1 .04

4 Overly Dependant of PTCL .04 1 .04

5 Lack of Franchise .07 1 .07

6 Lack of Innovative Services .08 2 .16

7 Competition .10 2 .20

8 Internal Problems .05 2 .10

          Total 1.00 2.67

1= Major Weakness2= Minor Weakness

External Factor Evaluation (EFE Matrix)

Sr No Opportunities Weight Rating Score

1 Can target Corporate Sector .10 4 .40

2 Global Expansion  .10 3 .30

3 Publicity & Marketing .10 3 .30

4 Develop new VAS .10 3 .30

5 Develop Franchise in NA/Remote Area .08 1 .08

6 Competitive International SMS/MMS Packages

.06 2 .12

4= Superior Response3= Above Average2= Average1= Poor

External Factor Evaluation (EFE Matrix)

Sr No Threat Weight Rating Score

1 Govt Interference .05 2 .10

2 Dependency on PTCL Cellular License .05 2 .10

3 Pension payouts .08 2 .16

4 Increased Health Care Cost .08 2 .16

5 Tough Competition .09 4 .36

6 Pressure Groups of Towers .02 3 .06

7 Economic Problems .09 4 .36

           TOTAL 1.00 2.80

4= Superior Response3= Above Average2= Average1= Poor

Competitive Profile Matrix (CPM)Critical Success Factors (CSF)

Mobilink Ufone Telenor ZongWeight Rating Score Rating Score Rating Score Rating Score

Market Share .15 4 .60 3 .45 3 .45 1 .15

Growth Rate .10 2 .20 3 .30 3 .30 3 .30

Financial Strength

.08 3 .24 2 .16 3 .24 3 .24

Management .12 4 .48 3 .36 3 .36 3 .36

Advertising & Marketing

.10 3 .30 4 .40 3 .30 3 .30

Brand Name .10 4 .40 3 .30 3 .30 2 .20

Packages & offers

.09 2 .18 3 .27 3 .27 2 .18

Price competitiveness

.07 2 .14 4 .28 3 .21 3 .21

Network Coverage

.10 4 .40 3 .30 3 .30 2 .20

Connectivity .09 3 .27 3 .27 3 .27 2 .18

Total 1.00 3.21 3.09 3.00 2.32

SWOT MATRIX Strength Weakness

Opportunity

Threat

SO Strategies

1.Market Development : Expansion of work in AJK & NA (S1, S4,O5)       Oversees Market Development (S2,S3, O2)1.Product Development: Introduce innovative VAS (S5,S6,O1,O4)

WO Strategies1.Market Penetration: Target Corporate Sector        Increase market share by making postpaid attractive                 (W3, W7,O1)       Open more franchise in Remote areas (W5,O5)

ST Strategies1.Market Development:  Expansion plan for AJK & NAS for enhanced coverage (S1,S2,S5,T3,T4,T5)

             WT Strategies1.Maket Development  Build more infrastructure and franchises in AJK/NA/remote areas (W1,W5,T2,T5)

SPACE MatrixFinancial Strength (FS) Revenue 4Operating Income 3Assets 5Equity 5

Avg = 4.25

Competitive Advantage (CA)2nd Largest Market Share -2Lowest price -1Product Line -3Network Coverage -3

Avg = -2.25

Industrial Strength (IS)Growth Rate                    6Increased Competition  4PTCL Backing                   5Profit Potential               3                                               Avg = 4.50

 Environmental Stability (ES)Economic Recession           -1Rate of Inflation                  -2Govt Regulations                -2Competitive Pressure        -4

Avg = -2.25

SPACE Matrix CalculationsInternal Factors: External Factors:

   Financial Strength (FS) Industry Strength (IS)  Competitive Advantage (CA) Environmental Stability (ES)

  FS & IS Values: +1 worst to 6 Best  CA & ES Values: -1 Best to -6 Worst

Calculation:X-axis = IS + CA Y-axis = FS + ES

= 4.50 – 2.25            = 4.25 – 2.25=  2.25 = 2

SPACE Matrix

Defensive

CA

Recommendations

 After going through the strategic analysis of Ufone, we recommend Ufone management a combination of Market/Product Development and Market Penetration strategies generally and particularly for Postpay

THANK YOU

BCG Matrix

PREPAY POSTPAY

Relative Market Share (Cash Generation)LOW

LOW

HIGH

HIG

H

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