Jazz

Strategic Management
ACKNOWLEDGEMENT
This report has been a great learning experience- helping us to learn about
the practical implications of strategic planning in an Organization.
We would like to take this opportunity to thank our instructor Mr. Javaid
Ahmed who made this report possible by providing his unconditional
guidance and cooperation throughout the semester.
We also wish to express our gratitude to Mr. Shahzad Majid, Account
manager (team lead) sales, who generously helped us in compiling this
report by sharing his expertise, knowledge and experiences, without which
this report would never have been possible.
LETTER OF AUTHORIZATION
December 09, 2009
Dear Reader,
We are students of Strategic Management at IoBM and have been authorized
by Mr. Javaid Ahmed to prepare a term report on Strategic Management at
Mobilink, which is to be submitted on December 09, 2009.
The preparation of this term report required us to perform a thorough
analysis of the Telecom Industry
Sincerely,
Maria Irshad
Huzaifa Mahesri
Karishma Motiani
Muhammad Umair Siddiqui
Nida Bhimani
Bela Panjwani
Institute of Business Management
LETTER OF TRANSMITTAL
December 09, 2009
Mr. Javaid Ahmed
Instructor, Strategic Management
Institute of Business Management, Karachi.
Dear Sir,
This is the term report on Strategic Management at Mobilink.
This report consists of the macro-environmental analysis and industry
attractiveness, the company and competitor analysis, micro-environmental
analysis and internal company resources, strategic analysis and
recommendations and strategic implementation.
The report has been completed after the perpetual hard work, determination
and devotion of past 3 months.
If you have any additional questions, we would be pleased to answer them.
Thanking you.
Sincerely,
Maria Irshad
Huzaifa Mahesri
Karishma Motiani
Muhammad Umair Siddiqui
Nida Bhimani
Bela Panjwani
Section 1:
MACRO-ENVIRONMENTAL
ANALYSIS AND INDUSTRY
ATTRACTIVENESS
EXTERNAL ENVIRONMENT
Porters Five Forces
Applying Porters five forces to the Pakistani telecommunication industry
allows us to garner a retrospective view of the potential attractiveness in
terms of profitability of the industry. We first must analyze the industry
through the five-force template, which will allow us to more accurately gauge
the industry in terms of its potential.
THREAT
OF
NEW ENTRANTS
1.
Do large firms have a cost or performance advantage

in your segment of the industry?
2.
Are there any established brand identities in your

industry?
3.
Do your customers incur any significant costs in

switching suppliers?
4.
Is a lot of capital needed to enter your industry?
5.
Is serviceable used equipment expensive?
6.
Does the newcomer to your industry face difficulty in

accessing distribution channels?
7.
Does experience help you to continuously lower

costs?
8.
Does the newcomer have any problems in obtaining

the necessary skilled people, materials or supplies?
9.
Are there any licenses, insurance or qualifications

that are difficult to obtain?
10.
YE
(+
)
()
Can the newcomer expect strong retaliation on

entering the market?
10
In this industry, the threat of new entrants is very low or in other words, the
entry barriers are very high, as shown by the above template. It is very
difficult and costly to acquire the needed technologies and expertise to set
up operations in this industry. Large amount of capital is needed for a player
to enter the market. Apart from that, to enter this industry, the new player
must obtain a license from the government which is usually a huge amount.
Currently to obtain this license it costs $300 million and this license needs to
be renewed every 10 years. It is a very big investment that a player needs to
make in order to enter this industry. Also for the new entrant, it would be
very extremely difficult to come up with the capital to infiltrate the
established distribution network of the current well-established players.
It is also very difficult for a new comer to enter this market because there are
already big names like Mobilink, Ufone, Telenor, etc which are very well
established in the market. It will be very difficult to change the perception of
millions of customers and to convince them to leave their current service
provider. This can be seen with the example of zong, a new entrant. Even
though it has done a lot of promotions to break through the competition, it
has hardly managed a reasonable share for itself. So new entrants will face
very heavy resistance from the already well established brands who not only
have very high brand equity, but also with their experience they can lower
down their prices without considerable damage to their brands, to force the
new entrant out of business. Thus this low threat of new entrants makes it a
favorable point for the industry.
Vodafone and Orange5 are two international companies who have been trying
to penetrate in the Pakistani telecom industry, but have been unsuccessful
so far. They still have not given up and are still trying to obtain the license to
operate here.
YE
BARGAINING POWER OF BUYERS
S
(+)
1.
Are there a large number of buyers relative to the

number of firms in the business?
2.
Do you have a large number of customers, each with

relatively small purchases?
3.
Does the customer face any significant costs in switching

suppliers?
4.
Does the buyer need a lot of important information?
5.
Is the buyer aware of the need for additional information?
6.
Your customers are not highly sensitive to price.
7.
Your product is unique to some degree or has accepted

branding.
8.
You provide incentives to the decision makers.
N
O
()
1
0
Judging by the template above, the buyer power is quite high for this
industry. The main reason for this are there are a lot of price sensitive
customers who face no significant costs while switching to another supplier.
This gives buyers considerable power over the industry. All the players in the
market work to cater to the needs of the customers, trying to come up with
better and more attractive packages every now and then, to broaden their
consumer base and to maintain their existing one. A new SIM of any mobile
service costs Rs.150 which is a quite cheap. Plus, the product itself is not
7
technical to understand so buyers can easily switch from one service
provider to another, without facing any difficulty in the process. However,
there are established brands in this industry and quite a few people are
brand loyal customers who would switch over to other brands that easily. But
the portion of such customers is very small and the majority is price
sensitive. High buyer power proves to be unfavorable for cellular service
providers.
THREAT OF SUBSTITUTES
YE
S
(+)
1.
2.
Substitutes have performance limitations that do not

completely offset their lowest price. Or, their
performance is not justified by their higher price.
The customer will incur costs in switching to a substitute.
3.
Your customer has no real substitute.
4.
Your customer is not likely to substitute.
N
O
()
1
0
The threat of substitutes in this industry is extremely low. It can be said to be

almost negligible hence it does not affect the profitability of the industry. One
thing is that the customers if want to switch to a substitute, they will then
have to incur a considerably high cost to do so. Plus no real substitute exists
for cell phones. The closest thing to a substitute is the CDMA phones and the
wireless phones. A few years ago, the demand for CDMA technology was
high, but that was attributed to poor service of PTCL connections. So the shift
to CDMA was the action of eliminating landlines from homes and keeping
CDMA phones instead. The use of cell phones was hardly affected by it.
Hence no real substitutes for mobiles, and therefore mobile service
providers, exist. This is an extremely favorable aspect of the industry.
BARGAINING POWER OF SUPPLIERS
YE
S
(+)
1.
My inputs (materials, labor, supplies, services, etc.) are

standard rather than unique or differentiated
2.
I can switch between suppliers quickly and cheaply.
3.
4.
My suppliers would find it difficult to enter my business

or my customers would find it difficult to perform my
function in-house.
I can substitute inputs readily.
5.
I have many potential suppliers.
6.
My business is important to my suppliers.
7.
My cost of purchases has no significant influence on my

overall costs.
N
O
()
1
0
The main suppliers for the telecommunication industry comprise of the SIM
card manufacturers and the scratch card manufacturers. Apart from them,
there are suppliers who handle the labeling, packaging and printing of the
packet in which the SIM card is sold.
The industry has a lot of such suppliers to choose from which gives the
industry an edge over the suppliers. The SIM card manufacturers are vast in
number and the companies also have the option of choosing a foreign
company or a local company. The players in the industry do not have to deal
with the same suppliers and they can easily switch to other suppliers,
depending on their prices. For suppliers, their clients are very important to
them as they buy a major portion of their production and also because there
10
is not a large clientele for them. Packaging and printing do not require any
special expertise as well and for this companies can go to any supplier. There
are again a large number of suppliers for this. Hence the bargaining power of
the suppliers is considerably low which is favorable for the
telecommunication industry.
DETERMINANTS OF RIVALRY AMONG EXISTING COMPETITION
YE
S
(+)
1.
The industry is growing rapidly.
2.
The fixed costs of the business are a relatively low

portion of total costs.
3.
There are significant product differences and brand

identities between the competitors.
4.
The competitors are diversified rather than specialized.
5.
It would not be hard to get out of this business because

there are no specialized skills and facilities or long-term
contract commitments, etc.
My customers would incur significant costs in switching
to a competitor.
6.
7.
My product is complex and requires a detailed

understanding on the part of my customer.
8.
My competitors are all of approximately the same size as

I am.
N
O
()
1
0
11
The telecommunication industry has one of the most competitive rivalries in
any industry. There are a large number of buyers and there are only few
players in the industry to cater to this vast market. The price to enter the
market is really high and similarly to exit is also very high. Therefore, the
players in the market are there to stay. The market is extremely price
sensitive and even if one service provider reduces prices, then the others will
have to follow suit otherwise they will lose out on their piece of the pie and
their negative churn will increase. There are significant brand differences
which have created brand loyal customers, but looking at the total market,
the portion of loyal customers is very small.
Currently the market leader in the industry is Mobilink with a market share of
31%. Just 2 years ago, this figure was approximately 45% which just shows
that the rivalry has increased a lot in the past couple of years. The major
competition that Mobilink faces is from Telenor with a market share of 22%
and Ufone with a market share of 20%. After that Warid telecom comes in
with 18% of the market.
Therefore the rivalry in this industry is extremely high which proves to be
unfavorable for the industry.
12
1.
2.
3.
4.
5.
OVERALL INDUSTRY
RATING
Favorab
le
Threat of new
entrants.
Bargaining power of
buyers.
Threat of
substitutes.
Bargaining power of
suppliers.
Intensity of rivalry
among competitors.
Modera
te
Unfavorab
le
Threat of new entrants

is very low
Bargaining power of
buyers is high
Threat of substitutes is
very low
Implications
Bargaining power of
suppliers is considerably
low
Intensity or rivalry is
extremely high
An over-all study of the 5 forces of porters model shows that the industry is
fairly favorable. The threat of new entrants is very low and the threat of
substitutes barely exists. And the bargaining power of the suppliers is also
very low. However, the very high bargaining power of buyers and the
extremely high rivalry among the competitors does give an unfavorable
scenario for the industry.
By aggregating the results as well as the detailed analysis of each of porters
5 forces shows that the telecommunication industry is a convincingly
favorable and attractive industry.
13
New Entrants
+++
Threat of
New
Entrants
Suppliers
Bargaining
Power of
Suppliers
THE INDUSTRY
Bargaining
Power of
Customers
Buyers
__
++
Rivalry among
Threat of
Substitute
Products
Substitutes
+ ++
14
PEST
Political Factors
De-regulation of telecommunication sector has made the sector investor
friendly but due to the present instability of the political environment in the
country, Pakistan is suffering a lot at the economic front. Former government
provided great opportunities for foreign investors to bring in their foreign
direct investment (FDI), but due to the recent security issues in the country
and political major factors like Judicial issues, Pakistans role in war on terror,
suicide attacks, energy crises, money laundering cases, food crises and
bilateral issues (with India), the cellular service sector is becoming highly
unattractive for the investors both; domestic as well as foreign direct
investment. All these factors greatly reduce threat of new entrants in
the industry.
Another important issue is of the Government Activation Tax (GAT)7. As soon
as a new subscriber registers and a new SIM is registered and activated,
cellular service providers must make a onetime GAT payment per SIM to the
government. Since the commencement of cellular services in Pakistan in
1994, the GAT was Rs. 500 per SIM activation, which was lowered to Rs. 250
in 2001. However the current government of Pakistan is negotiating a change
in their policy, charging a GAT of Rs. 750 per SIM activation. Each new SIM
that is activated costs Rs. 150 to the subscriber of the SIM. The cellular
service providers constitute this charge in their GAT payment, which means
that based on the current GAT of Rs. 250, they pay Rs 100 from their
corporate operations. If the GAT is increased to Rs. 750 per SIM activation,
this would highly affect the profitability and cost of operations for the cellular
service providers to a great extent. This may make the industry
attractive as due to low profitability, new entrants may be
discouraged to enter the industry.
The current government has enhanced the GST rate on the cellular sector
from 15% to 16% in the current fiscal year. According to the projections
made by the Pakistan Telecom Authority (PTA) and current analysis, this raise
in GST has and will continue to have a negative impact on cell phone usage.
Again this policy of the government has provided an advantage to
the substitute companies (wireless phones and CDMA) as this
increase in GST is an on-going expense for mobile users and since
there are low costs of switching to these substitute services, this
increases threat of substitutes.
15
The current policy of the Government has increased the licensing cost of
operation in order to start a business within the cellular service industry to
US$ 300 million, with additional renewal costs charged every year to the
cellular service providers. This has increased the cost of operations
within the industry making it very costly for the new entrants to
enter the market.
Economic Factors
The global economic slump and current economic instability and recession 9
in the country has drastically affected the state of cellular service industry in
the Pakistan. High inflationary pressures and other unfavorable factors have
resulted in low real incomes for people. This has made buyers more pricesensitive and willing to switch to any service that provides lower rates and
wider range of services. This is also because cost of switching for buyers is
low. This has increased rivalry within the industry as each
competitor fights for a higher market share, while the growth in the
industry saturates.
The total revenue of the cellular service industry is stated in terms of U.S.
Dollars. Recent economic crisis in the country have devalued the foreign
exchange rate of Pak Rupees against U.S. Dollars over the last year. Pak
Rupee depreciated from approximately Rs.60/$ to Rs. 83/$ in 20098. The
depreciation of Pakistani currency has reduced the total revenue of the
sector in terms of the U.S Dollars and therefore, real earnings are declining.
This makes the industry unfavorable for the new competitors to
enter and make investments in the industry.
Social Factors
Due to the price sensitive nature, customers always look out for the
connection that provide the best priced packages and focus on network
coverage. And usually an attractive package by one firm can influence the
purchase of many customers because of the multiplier effect. For instance, if
one package is in demand, people would start switching over to that mobile
connection in groups of families, friends and colleagues. These packages are
designed in a way that users of the same mobile connections can stay in
touch for a very low amount. So a switch to competing brand by one
consumer may actually result in a lot of people switching over to that brand.
This increases the buyer power by a large margin.
Recent trends have shown that more and more people in the society are
becoming concerned about their lifestyle and how others perceive them
16
within the society. In the upper-middle and higher income brackets majority
of the people want to be perceived as sophisticated and want to use
exclusive services in order to feel as being part of the higher class and
status. For such customers there is more focus on high value added service
and exclusive packages. This slightly reduces rivalry in the industry,
making it more attractive.
The demand for cell phones has increased in the rural areas overtime. This is
due to the fact that cell phone service is a more reliable, yet affordable
means of staying in touch with family members, compared to landlines,
which are inoperative most part of the year because of weather problems
and other related issues. With this new trend, there is demand for cell phone
services in rural areas1 which is not properly catered to.
Technological Factors
The pace of technological advancements is so high in the industry that it
makes the provision of services more and more complex. The existing
companies are finding it difficult to match the current global technological
competencies as it is very costly to provide these services. Providing its
users with the latest services through their mobile connections (like GPRS,
WAP and Edge services) and other facilities such easy load, credit sharing
and convenient and faster billing services is very important for survival. To
keep pace with these new services is very important to retain customers and
target new ones as these technological services have a high potential
demand and require continuous updates. This again reflects rivalry as
firms copy each others latest innovation, even if its at a higher
cost or loss. In other words, any update made by any company within the
industry must be immediately taken into affect by all other companies in
order to compete successfully with rivals. 3-Generation3 technologies in
communication which include WLL, WI-FI/wireless LAN, UMTS are not
provided by any telecom service providers but there is a high potential of
such service requirement by the customers. Another technology called WiMax4 is cheaper than 3G, but is restricted only to internet service in cell
phones.
Another interesting technology has evolved which has served to increase

rivalry within the industry. This technology, popularly referred to as MNP6
(Mobile Number Portability), provides mobile users with the opportunity of
17
keeping their original numbers while switching over to other networks. This
has further made it easy for mobile users to switch from one network to
another, whenever a good deal is offered. This is increasing rivalry in the
industry.
Another technology prevalent in the western part of the world is of account
recharging services2 via the internet. This is for the convenience of users who
can instantly load credit in their mobile phones by going online.
18
EXTERNAL FACTOR EVALUATION MATRIX
Weig
ht
Rati
ng
Weight
ed
Score
0.15
0.45
2. Account recharging service via internet2
0.10
0.1
3. Demand for 3G services3
0.15
0.3
4. Wi-max for internet service4
0.05
0.1
0.05
0.05
0.15
0.45
0.05
0.15
0.05
0.1
0.1
0.2
0.15
0.3
Key Factors
Opportunities
1. Increasing number of users in rural
areas
Threats
1. Vodafone/Orange trying to enter the
market5
2. Introduction of Mobile number
6
portability
3. Political instability (negotiations for tax
rates)7
4. Inclement weather can be detrimental for the
service
5. Rising dollar exchange rate8
6. Economic recession9
Total
1.00
2.20
19
Analysis/Interpretation:
In the External Factor Evaluation, Mobilink scored 2.20 which depicts that the
company is operating a little below the average. Mobilink is not fully taking
advantage of the potential opportunities in the external environment or
making efforts to defend against the potential threats.
Mobilink has been taking steps to expand into rural areas as there is an
increase in the number of users in these areas. By catering telecom services
to these areas, it will help them increase their customer base. On the other
hand, an opportunity which Mobilink is not availing is the technology
prevalent in the western part of the world that provides account recharging
services via the internet, which is for the convenience of users who can
instantly load credit in their mobile phones by going online. Also, 3Generation technologies in communication which include WLL, WI-FI/wireless
LAN, UMTS are not provided by any telecom service providers in Pakistan,
but there is a high potential of such service requirement by the customers.
Another technology called Wi-Max is cheaper than 3G, but is restricted only
to internet service in cell phones. Mobilink has not yet started these services.
There are potential threats to the company that include the entry of the
Vodafone company which has been trying to penetrate in the Pakistani
telecom industry, but have been unsuccessful so far. It still has not given up
and is trying to obtain the license to operate here. The mobile number
portability attracts consumers towards cheaper connections while
maintaining their old numbers, which is a threat to Mobilink, as the company
holds an expensive image in the minds of the consumers. The economic
recession and rising dollar exchange rate have hit the company financially
and is a threat to all the telecom companies. Also, the political instability that
prevails in our country is a threat to Mobilink as it is not easy to negotiate
the tax rates again and again with continuously changing governments.
Market penetration: Mobilink needs to take steps to defend itself

against the economic recession which has hit the company
financially. The company should make the jazz rates compatible
with the competitors rates and must focus on offering attractive
packages. Also this would help in retention of customers as they can
easily lose customers through mobile number portability, to their
competitors.
Product development: Since the demand for 3G services is
increasing in the Pakistani market, Mobilink should start investing
their returns in 3G technologies and be the first one to provide this
service for Indigo customers. This will give them an edge over other
competitors and further enhance the image of the company.
20
Section 2:
Company and Competitor
Analysis
21
COMPETITIVE PROFILE MATRIX
Critical
Success
Factors
Weight
s
Rati
ng
Weight
ed
Score
Rati
ng
Weight
ed
Score
Rati
ng
Weight
ed
Score
Rati
ng
Weight
ed
Score
Advertising
0.1
0.3
0.4
0.2
0.3
Product
quality
0.15
0.6
0.45
0.3
0.3
Coverage
0.05
0.15
0.1
0.1
0.1
Price
Competition
0.15
0.3
0.6
0.6
0.45
Management
0.05
0.15
0.1
0.1
0.2
Financial
Position
0.1
0.3
0.3
0.3
0.2
Customer
Loyalty
0.05
0.15
0.1
0.1
0.1
Market Share
0.2
0.8
0.6
0.4
0.4
Customer
Service
0.15
0.45
0.3
0.3
0.3
TOTAL
1.00
3.20
2.95
2.40
2.35
22
Mobilink received a score of 3.20 in the Competitive Profile Matrix. Mobilink
has scored reasonably well on mostly all critical success factors. It is the
market leader having the highest market share with a customer base of more
than 10million users.
Mobilink beats its competitors with a good difference in product quality. The
product services it provides are relatively better than what the rest provide.
Mobilink provides instant connectivity and remarkable voice clarity, with
some value-added services.
Mobilink, being the oldest player in the industry, has a widespread coverage
network which is more efficient compared to the rest. It has been working on
its customer service and has managed to gain an edge over its competitors
and has also established a separate Club Indigo department that services
premium customers who have become loyal to Mobilink.
The area where Mobilink has taken a beating against Ufone is in advertising.
Ufone advertises extensively and more repeatedly, especially on television.
The financial position of Mobilink has always been strong because it
generates revenues that are approximately three-four times than what
others earn, but since it has been the biggest player and a highly leveraged
company, it has been greatly hit by the recession. Also, Mobilink has not
been very price competitive as the rest of the cellular companies who have
increased their customer bases by offering cheaper packages.
Mobilink should work on price competition and offer cheaper

prepaid packages for jazz in line with other competitors like Ufone
and Warid. This will attract more customers as Mobilink is already
the market leader with an established image and cheaper packages
will trigger more sales and boost revenues.
Mobilink has a widespread coverage network which is more efficient
compared to the rest of the cellular companies. Therefore, it should
further capitalize on it to gain more advantage over other
companies.
23
Section 3:
MICRO-ENVIRONMENTAL
ANALYSIS AND INTERNAL
COMPANY RESOURCES
Internal Resources
Core Competence
24
Mobilink prides itself in catering to the needs of its post paid customers in
the best possible way. It has exclusive services for its Indigo clients, which it
has managed to maintain overtime. Mobilink has a group of employees
devoted to Indigo clients, in a form of a group called club indigo. They work
on providing their customers with high quality customer service which is
essential to retain their clients. They focus on what their customers value
and how that can be provided to them in the most efficient manner.
Value Chain
MOBILINK INDIGO
(DIFFERENTIATION BUSINESS LEVEL STRATEGY):
25
FIRM INFRASTRUCTURE
MOBILINKS WIDELY STRECHED AND

UNBEATABLE COVERAGE OF SERVICE
INDUCTION OF SIEBAL
HUMAN RESOURSE
MANAGEMENT
THE MOST HIGHLY PAID PERSONNELS IN

THE COMPANY AS WELL AS HIGH
RELATIVELY TO THAT OF OTHER FIRMS
HIGHLY TRAINED
PERSONNELS FOCUSED TO
RUN THE CLUB INDIGO
TECHNOLOGICAL
DEVELOPEMENT
PROCUREMENT
INBOUND LOGISTICS
SIM PACKAGE 'S
SUPPLY PROCESS
SIM
PACKAGE
HAND
BOOK/PRINTING
INDUCTION OF SIEBAL AS
THE STATE OF THE ART
SOFTWARE SYSTEM
CO-BRANDING WITH BLACKBERRY AND

PLANNING TO BRING IN 3G AND WI-FI
TECHNOLOGY. HENCE TAPPING ON THE
FIRST MOVER ADVANTAGE
STANDARDIZED RAW MATERIAL USED IN PACKAGING OF THE SIM

PACK BUT A NOTICEABLE AND RELATIVELY A BIGGER PACK IN SIZE
TO THE JAZZ SIM PACK
OPERATIONS
CONSISTENT
MANUFACTURING OF
ATTRACTIVE
PRODUCTS
WIDE
INTERNATIONAL
ROAMING
MARITIME ROAMING
IN-FLIGHT ROAMING
OUTBOUND LOGISTICS
RAPID AND TIMELY
DELIVERY OF SERVICES
STOCK WATCH
MOBILE BANKING
CORPORATE SMS
PIA RESERVATIONS
MARKETING & SALES

STRONG CORDINATION
AMONG R&D,
MARKETING AND
SALES FOR MANAGING
CLUB INDIGO
CLUB INDIGO
PERSONALISED CARE
PRIORITY AT
CALLCENTERS
SERVICES
A UNIQUE BUSINESS
CLASS SERVICE
26
One of the features where Mobilink stands the strongest than any other
cellular company in the industry is the coverage, as it covers a large number
of areas and regions. Others just might need more time and expense to
reach. Siebel has also added to the infrastructure efficiency of the firm as it
is providing state of the art database service.
The sim pack of Indigo is provided with details of features in the form of
booklets. The raw material used in the manufacturing of the sim packs is
overall standardized and same for both Indigo and Jazz, it is designed in a
more exclusive manner for Indigo to give it a more premium touch like the
service offered by Indigo. A new cost cutting activity related to inbound
logistics has been that of outsourcing the manufacturing of the sim packs to
local manufacturers.
Previously sims were manufactured abroad and had to be imported at high
rates. Now local manufacturers have started producing sims and mobilink
and other firms in the telecom industry usually purchase them locally. The
whole pack requires packaging, printing/booklets and ofcourse the sim itself.
All these functions are performed by different suppliers. Mobilink lacks
strategic relationship with its suppliers and keeps switching from one
supplier to another.
Business services such as airline ticket booking and stocks watch are
provided by the company to it corporate customers. All these related
services are designed to match the needs of the target market.
Among the primary services Indigo has high priorities for its Operations and
Marketing & Sales which act as the primary drivers to attract customers.
Technology is another area where the firm is constantly upgrading. Human
Resource Management is given equal importance within the business as
employees are retained for several years and are offered attractive packages
in order to seek the best talent.
The firm highly intensifies its focus on a number of elements in the value
chain for the differentiation strategy in Indigos case, the resultant of which
is the core competency of Mobilink Indigo i.e. highly efficient and
personalized business class treatment of the customers through its customer
care service. The management of Club Indigo is a job that demands untiring
commitment and rewards with lucrative returns to the office holders of the
club. The users here are entertained with the topnotch services at the call
centers and at all other customer related services which are carved to meet
the expectations of the proposed idea of care for them.
MOBILINK JAZZ
(COST LEADERSHIP BUSINESS LEVEL STRATEGY):
27
FIRM INFRASTRUCTURE
MOBILINKS WIDELY STRECHED AND

UNBEATABLE COVERAGE OF SERVICE
INDUCTION OF SIEBAL
HUMAN RESOURSE
MANAGEMENT
EMPHASIS ON CREATING LOW COST SERVICES FOR A BROADER

AUDIENCE
TECHNOLOGICAL
DEVELOPEMENT
INDUCTION OF SIEBAL AS THE STATE OF THE ART

SOFTWARE SYSTEM
PROCUREMENT
REDUCING THE OVERALL COST OF THE SIM PACK BY REDUCING

THE SIZE OF THE PACKAGE
INBOUND LOGISTICS
SIM PACKAGE 'S
SUPPLY PROCESS
SIM/JACKET
PACKAGE
HAND BOOK
SCRATCH CARDS
POINT OF SALE
FRANCHISES
GENERAL STORES
ETC.
OPERATIONS
SIEBAL INSTALLATION
RESULTING IN
REDUCTION OF
OPERATION/PROCESSI
NG TIME AND HENCE
THE MONETARY
COSTS ALSO
OUTBOUND LOGISTICS
INTERRELATIONSHIP
WITH SISTER UNITS
SAME CUSTOMER
CARE OFFICES FOR
JAZZ AND INDIGO
BOTH
SAME SUPPLIERS OF
SIM PACKS
SIEBAL SYSTEM
MARKETING & SALES

HUGE SCALE
ADVERSTSING
FEATURING POPULAR
PUBLIC FIGURES
SERVICES
28
Primarily, Jazz has focused on its Inbound and Outbound logistics. The
processes under these two logistics in the firm are the same for both Jazz
and Indigo which effectively reduce the overall cost. The focus here is to
mobilize the value chain in accordance with the cost-leadership business
strategy that is targeted towards a huge audience. The main focus here is to
reduce costs of the operations and to communicate the product to
prospective customers. The induction of Siebel in the firm has remarkably
reduced the cost of database management.
Similar to other firms, Jazz also is making its marketing and sales revolve
around advertising using popular figures that attract the masses.
As for the support activities, Siebel as a part of infrastructure and
technological advancement again proves more cost effective, especially for
Jazz as it is focused to follow a cost-differentiation strategy.
For the target audience of jazz, the packaging does not have to be that fancy
or big (like in Indigos case). So Jazz sims have very basic packaging and is
much smaller in size.
For prepaid customers, scratch cards also need to be made available to load
credit. Those are also made in a cost-effective manner and are now thin
strips with Jazz written on them. The distribution of scratch cards is done by
Mobilink themselves which is quite expensive.
Strategic Cost Management

29
Mobilink enjoys cost or performance advantage in the cellular service
industry and with experience over time it has been able to manage its costs
effectively.
The suppliers of Mobilink consist of SIM and scratch-card manufacturers. A
proper logistics network is required for the shipment and delivery of the SIM
pack and scratch cards to all the franchisees nationwide. Mobilink has
outsourced this process, which has proved to be a cost-effective strategy for
Mobilink. Reducing the size of the SIM pack as well as the size of the scratch
cards has also helped mobilink reduce the overall costs of supplies. Also the
use of standardized raw material in the production of SIM pack n scratch
cards has greatly helped in reducing the costs.
Mobilink was the first cellular service provider in Pakistan to operate on a
hundred percent digital GSM technology. Since its inception, it has
maintained its position as the market leader due to constant technological
innovation over the time. The company focuses on providing its customers
with the latest technological developments worldwide, in the most costeffective manner possible. It is obvious that Mobilink has to bear a high cost
and risk in bringing the technology but Mobilink has kept up to its promise of
always providing its valued customers with more than they expect. Mobilink
has invested into the installation of Siebel, the state of art software system.
The introduction of Siebel technology- a centralized computer system for
data management has helped in the reduction of operation and processing
time, hence the monetary costs. It has also enabled mobilink to stretch its
network and service coverage across the country.
Mobilink invests very wisely on its human resource. It emphasizes on
creating personalized and value driven services. As a result, it hires the most
highly paid and the most competent personnel in the company. Unlike many
other firms in the industry, mobilink follows a proper recruitment process and
aims at hiring the best employees and continually providing them with
training and development opportunities so that their performance is
reflected by the value driven services provided to the customers. Mobilinks
strong financial position and approximately three times larger revenue
generation has enabled the company to devote extensive efforts on human
resource. Although the costs associated with the human resource is
preferably higher but it is remunerated in the form of higher employee
retention and performance of the employees focusing on value driven
services.
Mobilink has fixed a sufficient budget for large scale advertising and
marketing management (including research and development) which has
proved to be very effective in the form of increased revenues and a stronger
customer base. As a result, Mobilink need not be very price competitive just
30
like other companies which focus on offering cheaper packages to increase
the customer base.
Mobilink has the same customer care offices for the jazz and indigo which
also contributes towards efficient cost management. However, to manage its
costs strategically well, Mobilink needs to manage its high cost of distribution
of services in the far reach areas-rural areas.
Financial Strengths
Even though the economic recession took the telecom industry by storm,
Mobilink still managed to maintain a reasonably healthy financial position.
Their ROI is showing a declining trend but in spite of that, they have
maintained a ROI of 20.3%, which is higher than the rest of the companies in
the telecom industry.
Another financial strength that Mobilink has is its strong liquidity position.
Mobilink has a current ratio of 1.2 which is very high and shows that Mobilink
has a lot of cash at its disposal which it can use to capitalize on an
opportunity or to counter a weakness.
One downside of Mobilinks financial position is its leverage ratio which is
around 25.7%. It shows that Mobilink has a lot of debt and that its financing
is done through loans by a large amount.
INTERNAL FACTOR EVALUATION MATRIX
31
Key Factors
Weig
ht
Rati
ng
Weight
ed
Score
0.1
0.3
0.1
0.3
0.05
0.2
0.1
0.3
0.2
0.8
0.15
0.6
0.1
0.2
0.05
0.05
0.1
0.2
0.05
0.15
Strengths
1. High Return on Investment
2. Siebel technology centralized computer
system
3. Effective advertising leads to higher profits
4. A strong established brand image
5. Club Indigo department servicing premium
customers
6. Extensive coverage nation-wide
Weaknesses
1. High cost of distribution
2. Lack of strategic relationship with suppliers
3. Unsatisfactory call centre services for prepaid
users
4. Brand name associated with being expensive
Total
1.00
3.1
32
Mobilink received a total score of 3.1 in the internal evaluation which
delineates that the company is performing above average. This signifies that
the company has a strong internal system and is able to effectively manage
all of their strengths in a meaningful manner.
Mobilink has a good financial position which can be seen from the high return
on investment. The high returns basically come from Indigo which is a
differentiated product and offers premium services to the loyal Indigo
customers. The Club Indigo department contributes to majority of the profits
earned by Mobilink. Another strength Mobilink possesses is the Siebel
technology, which is effective database software it is a centralized system
that keeps a track of all the operations and captures information such as
credit recharge/transfers done by every user. Mobilink is the market leader
and thus has a strong established brand image and extensive coverage
nationwide, catering to a large number of customers. Mobilink has been
spending on advertising too to make it more effective and it has successfully
achieved its profit targets through extensive advertising.
However, Mobilink has some weaknesses, the biggest one being high cost of
distribution. The company has in-house distribution and does not outsource,
thus increasing the costs for the company. The company lacks strategic
relationship with its suppliers since it has different suppliers for packaging,
printing, sealing, sim cards, etc. and they keep changing suppliers from time
to time according to their desired rates they are able to negotiate with them.
This increases management costs as they have many different suppliers for
each function and too often they switch suppliers to get raw materials at a
low cost. Like their competitors, Mobilink is also criticized for its
unsatisfactory call centre services for prepaid users. Another weakness that
the company has is that the brand name is associated with being expensive
this is associated with Indigo, but it affects the image of Jazz which is not so
expensive.
Product development: Since there is a great demand for 3G in the

Pakistani market, Mobilink should start reinvesting their returns in
3G technologies and be the first one to introduce this service in the
market for Indigo customers.
Mobilink needs to work on its brand image so that customers do not
associate it with being very expensive. Once the image is changed,
customers will prefer Jazz packages which are not too expensive
compared to other telecom companies.
The company needs to build strong strategic relationship with its
suppliers. Instead of having many suppliers, it can have a single
vendor from whom they can buy in bulk and get cheaper rates.
33
To reduce the high costs of distribution, Mobilink should start

outsourcing and hire an external sales force. This will reduce
internal burden and also costs.
34
Section 4:
STRATEGIC ANALYSIS AND
RECOMMENDATIONS
35
Generic Strategy Matrix
Mobilink Indigo:
Mobilink Indigo works with the differentiation strategy in the focused avenue.
The positioning that Indigo has done is that of a highly sophisticated
business class postpaid cellular service that caters to the premium needs of
business customers. Co-branding with Blackberry, widely stretched roaming
services, and future plans to bring in the 3G services to Pakistan are its
strong credentials. The element that is highly stressed is that of utilization of
human resource for the Indigo customers. Be it the customer care service or
the Club Indigos regular functions, the HR procedures are from where Indigo
derives its Core Competence.
Offering premium class value-added services

Introduce 3G services
Recharging account via internet
36
Mobilink Jazz:
Although Mobilink strictly works in coherence with a cost leadership strategy
for its prepaid service Jazz, it has a slight inclination towards differentiation.
This is where Jazz finds it difficult to be as successful as its sister division
Indigo. For a prepaid service, to have a brand image of being relatively
expensive can be the downside, which in Jazzs case proves correct. For the
reduction of costs for its operations, Jazz presses on its logistics. Technology
here also has played its part of cutting down the costs. Innovation and
investment in database technology has resulted in a centralized system that
curtails the cost of data handling.
Following strategies can be implemented for Jazz:
Offer value added services

Provide lower denomination scratch cards, like RS.50 cards, to further
penetrate the market
Offer account recharge services via the internet
37
TOWS MATRIX:
Opportunities
1. Increasing number of users in rural
areas
Strengths
Weaknesses
1 High return on investment

.
2 Siebel technology centralized computer
. system
3 Effective advertising leads to higher
. profits
4 A strong established brand image
.
5 Club Indigo department servicing
. premium customers
6 Extensive coverage nation-wide
.
S-O Strategies
1 Efficient utilization of financial resources
. to cater increasing demand for 3G and
Wi-Max services (S1, O3, O4)
1.
High cost of distribution
2.
Lack of strategic relationship with

suppliers
Unsatisfactory call centre services for
prepaid users
Brand name associated with being
expensive
2.
Account recharging service via internet
2
.
3.
Demand for 3G services
4.
Wi-max for internet service
3
.
4
.
Taking advantage of extensive coverage

nationwide and familiarity to capture rural
market (S6, S1, O1)
Provision of 3G services for the Indigo
customers (S5, O3)
Programming Siebel to introduce account
recharging service via internet (S2, O2)
Threats
1. Vodafone/Orange trying to enter the
market
S-T Strategies
1 Capitalize on strong brand image to
. decrease of new entrants (S4, T1)
2.
2
.
3
.
3.
Introduction of Mobile number

portability
Political instability (negotiations for tax
rates)
4.
Inclement weather can be detrimental

for the service
5.
High Dollar Rate
6.
Economic recession
3.
4.
W-O Strategies
1. Outsource distribution services in
rural areas to minimize distribution
costs (W1, O1)
2.
Introducing recharging services via

internet to reduce distribution costs
(W1, S2)
W-T Strategies
1. Altering the perceived image of
Mobilink in the minds of the
customers to reduce the number of
MNPs (W4, T2)
Using brand image to retain customers

(S4, T2)
Bearing the burden of recession and
increasing tax rates by utilizing the sound
financial performance ( S1, T5, T6)
38
The TWOS matrix is an important matching tool that helps managers

develops four types of strategies: SO (strengths-opportunities) Strategies,
WO (weaknesses-opportunities) strategies, ST (strengths-threats) strategies
and WT (weaknesses-threats) strategies. The part of making a SWOT matrix
requires good judgment and is a very difficult part of the matching stage.
SO strategies use a firms internal strengths to capitalize on the
opportunities that exist in the external environment. Every manager wants to
use their strengths in such a way that would put their company in a better
position.
For Mobilink, it can come up with 4 tactical measures to capitalize on
opportunities using their internal strengths.
There is a great opportunity for Mobilink to introduce the 3G

technology and provide Wi-max internet services which has a great
demand in the market. It is a new technology and something that
would generate a lot of revenue for the firm. It is a very expensive
technology and therefore Mobilink can use its strong financial
condition and utilize its financial resources in such a manner that
they could succeed in introducing this new technology before any
other competitor does.
There is a huge opportunity of entering into the rural markets. The
competitors have not yet penetrated this market because they are
not spread out enough. But Mobilinks strength lies in its extensive
network coverage nationwide. It could use this strength and
penetrate into the rural areas and therefore further increase their
spread and market share.
Since the 3G service will only be provided for the Indigo customers
(as it can only be provided to billing customers), Mobilinks club
indigo can easily cater to the provision of 3G. The club indigo
department will promote this service and provide extensive service
for its indigo customers.
One of the biggest strengths of Mobilink lies in its Siebel technologya centralized computer system. This technology helps in speeding
up processes and facilitating operations. The company could
program Siebel in such a way that customers can go on the internet
and recharge their accounts whenever and with whatever amount
they wish to. There will be no time limitation and recharging
accounts will no more be a hassle.
WO strategies focus on improving the internal weaknesses by making use of

the external opportunities. Sometimes external opportunities exist but the
39
firms internal weaknesses prevent them from taking advantage of the
opportunity. These strategies focus on minimizing those weaknesses to make
the most out of the opportunities.
A large opportunity exists in the form of the untapped rural areas. A lot
of demand exists and it is a big market that needs to be covered. The
limitation that Mobilink faces in capturing this market is that it has high
distribution costs. In order to capitalize on this opportunity, they could
outsource their distribution and not only cut down cost but also
effectively capture this market by their distribution networks and
channels. Their in-house distribution network not only limits their
distribution but also makes it a burden on other functions of the
company. Therefore outsourcing distribution would give them a real
chance of further expanding their market share and coverage.
Another way how Mobilink can reduce their distribution costs is by
capitalizing on the opportunity of recharging services via the internet.
Their distribution costs mainly include providing mobile scratch cards
to every small, medium or big store in every city and every area of
Pakistan. It is a very difficult and expensive task of maintaining a
constant supply everywhere. This cost can be reduced by taking
advantage of the opportunity of starting account recharging services
via the internet. The consumer can recharge their cell phone account
by any amount and at any time conveniently from the comfort of their
home.
ST strategies use the firms internal strengths to avoid or reduce the

external threats. A company can face external threats head on by using their
internal strengths and overcoming the problem.
The threat of new entrants entering the market is always a constant

threat to the industry. There are a number of ways to deal with it and
one way Mobilink can counter this threat is by using their strong
established brand image. It is a very big strength that Mobilink has.
They were the first ones to introduce the GSM technology and have the
largest market share in the industry. They have developed a very
strong brand image which can be further enhanced and used to keep
minimize the threat of the new players trying to enter into the market.
The new technology of mobile number portability is a big threat to all
the companies in the industry because it makes it easy for the
customer to switch their respective service provider without changing
their phone number. Mobilink can use its strong brand image and
further market their product in such a way that it builds a stronger
image so that customers are more inclined not to leave Mobilink thus
reducing this external threat.
40
With the changing government, the tax rates that are applied on the
service providers also change. The new government always usually
increases the tax rate which the service provider has to pay on
activation of each SIM card. This plus the economic recession has hit all
industries and all commodities very badly. These two reasons are
enough for any company to shift the burden on the consumers by
increasing prices so they can maintain their profit margin. But Mobilink
can use its internal strengths and because of its strong financial
position, it can take the burden on its own shoulders and off from the
consumers. Instead of increasing prices, they can keep the same
prices and reduce their profit margins slightly. This way, their image
will improve and customer retention will increase many a folds.
WT strategies are defensive tactics directed at reducing internal weakness

and avoiding external threats. It focuses on minimizing internal weaknesses
to minimize or avoid external threats.
One of Mobilinks major weaknesses is that it is perceived to be as an

expensive service provider. It is confused with being expensive rather
than premium. Because of this brand image, customers switch from
Mobilink to other networks via the mobile number portability
facility. It is a big threat to all the players in the business and one way
it can be reduced is if Mobilink can change its image of being
expensive. This can be done through strategically marketing the
product and spending more on marketing and promotions. Once people
start to perceive Mobilink as not expensive, a large portion of
customers will re-think about switching to another connection.
41
Internal Strategic Position
External Strategic Position
Financial Strength
Environmental Stability
Return on Investement
Leverage
Liquidity
Cashflow
Inventory turnover
4
3
5
4
4
Average Score
Competitive Advantage
Market share
Product quality
Customer loyalty
Technological Knowhow
Control over suppliers
Average Score
Y - Axis:
Financial Strength
Environmental Stability
4 + (-2.25) =
Technological changes
Rate of inflation
Demand variability
Barriers to entry
Competitive pressures
Ease of exit from Market
Price elasticity of demand
Risk
Average Score
-1
-2
-5
-2
-3
-2
-1
-2
2.25
Industry Strength
-1
-2
-3
-2
-4
-2.4
4
2.25
1.75
Growth potential
Profit potential
Financial stability
Techological Know-how
4
4
3
5
Ease of entry into market

Average Score
1
3.4
X - Axis:
Competitive Advantage
Industry Strength
-2.4
3.4
(-2.4) + 3.4 =
Strategic Position and Action Evaluation (SPACE) Matrix
42
+6
+5
+4
+3
+2
+1
+0
-5
-4
-3
-2
-1
+0
+1
+2
+3
+4
+5
-1
-2
-3
-4
-5
-6
Conservativ
e
FS
Aggressive
43
CA
IS
Defensive
ES
Competiti
ve
Analysis:
Mobilinks direction vector falls in the Aggressive Quadrant of the SPACE
matrix which reflects that it is a financially strong firm that has achieved
major competitive advantages in a growing and stable industry. This means
that Mobilink is in an excellent position to use its internal strengths to:
Take advantage of external opportunities,

Overcome internal weaknesses, and
44
Avoid external threats.
Thus, market penetration, market development, product development,

backward/forward/horizontal integration, diversification or a combination
strategy are all feasible options. However, depending on the specific
circumstances, we suggest that Mobilink should pursue:
Market Development: This can be done by providing jazz services in

new and unreached geographical areas within Pakistan (areas where
there is market but are not being served by Mobilink as yet).
Product Development: Although Mobilink is one of the best service
providers in the nation, there are certain services that it could use to
improve its products and further differentiate itself.
For instance, internet in cell phones has become a necessity gradually

overtime for a large number of users. Thus, they could provide Wi-max,
which is a faster version of internet service such a service is currently not
provided by any of the other telecom services. Mobilink can add this feature
to their services and cater both pre-paid and post-paid services.
Another strategic move that Mobilink can practice for product development
is the induction of 3G services it offers faster internet access along with
additional features such as video conferencing, data transferring/data
sharing etc. This service, however, is expensive and thus can be offered to
indigo users only.
45
BCG (BOSTON CONSULTING GROUP) MATRIX:
RELATIVE MARKET SHARE

High
Medium
1.0
Low
0.5
0.0
High
{+20
Indigo
Jazz
Stars
Question Marks
II
INDUSTR
Y
SALES
GROWTH
Medium
0
RATE
Cash Cows
III
Dogs
IV
Low
-20
Mobilink Indigo enjoys a high relative market share due to its unique and
business like service and treatment for the customers in the postpaid
division. Furthermore, the industry is also benefitting from the increasing
growth rate as more and more business customers are entering into the
46
market making it attractive for the industry. Falling in the star quadrant,
substantial investment should be made in this sector. There is a great
demand for 3G services in the local market as it helps to turn a cell phone
into a laptop. This would require a huge investment as it is an expensive
technology, but it would help create more customers for Mobilink Indigo. The
need for postpaid billing and priority of customer service for the business
holders is increasing since it has raised the bars of ease for such demanding
users. The USP in this case especially is the established brand name of
Mobilink which is now geared up with the power pack Indigos business class
service. The strategies that could be adopted for Indigo are as follows:
Market penetration by offering special discounts to corporate clients

so that they buy in bulk for their employees.
Product development by bringing in 3G services for the postpaid
customers.
Jazz, on the other hand, has a relatively low market share in the prepaid
division. This unit of the firm seems to be struggling with brand image
problem of being perceived as an expensive service, which makes it difficult
to operate in the price sensitive division of the industry. For the prepaid
customers, low prices stand out to be the most important features, but this is
where Jazz struggles to and should continue to work on by making the
customers perceive the company as a value-based service. The industry
growth rate here also has an increasing here. Since the prices of the services
are for public and general use, firms tend to follow a cost-leadership strategy
to sustain itself in this highly price sensitive market, the resultant of which
sometimes totals to price wars and cutthroat competition. The demand for
prepaid services is increasing in the rural areas and Mobilink should
capitalize on this opportunity.
Market development can be done by expanding further into rural

areas, by reaching out to customers where no other network covers.
Market penetration can be done by selling scratch cards of lower
denomination
The Internal-External (IE) Matrix
47
The IFE Total Weighted Score
High
3.0 to
3.99
The EFE
Total
Weighte
d Score
Mediu
m
2.0 to
2.99
Low
1.0 to
1.99
Strong
3.0 to 4.0
I
Average
2.0 to 2.99
II
Weak
1.0 to 1.99
III
Grow and Build
VI
VII
VIII
IX
IV
Analysis:
With an EFE score of 2.20 and an IFE score of 3.1, Mobilink falls into the
fourth cell which is a part of the Grow and Build region of this matrix. The
strategies
Market Development by entering into those areas (both rural and urban)
that are yet not served by Mobilink.
Product Development strengths can be built by introducing services such
as
Wi-max for both pre and post paid customers

3G services for specifically postpaid customers.
48
The Grand Strategy Matrix

RAPID
MARKET
GROWTH
Quadrant II
Quadrant I
Targe
t
WEAK
COMPETITIVE
STRONG
COMPETITI
VE
POSITIO
N
POSITION
Quadrant III
Quadrant IV
SLOW
MARKET
GROWTH
Analysis:
Upon evaluating Mobilink on competitive position and market (industry)
growth, we see that it falls into the first quadrant which means that it is in an
excellent strategic position. For Mobilink, market penetration, market
development and product development would be appropriate strategies to
adopt.
Since it already has a well established competitive advantage in the telecom
industry, therefore Mobilink should work on offering fast internet services
through Wi-max to its post-paid as well as pre-paid users.
It can also build upon its competitive advantage by providing additional
services of video conferencing and data transferring/data sharing along with
faster internet services to its (Indigo) post-paid users through 3G services
(which is comparatively more expensive than Wi-max).
49
Also, since telecom industry is a fast growing industry, therefore Mobilink can
take advantage of it by expanding its market into those areas that it has not
reached yet. Urban areas are most densely covered by several networks. It is
actually the rural areas which have shown a significant growth in demand for
cellular services. These areas are surprisingly showing reasonably high
profitability and several networks are already working on these areas.
50
Summary matrix
Alternative Strategies
IE
SPACE GRAND
BCG
COUNT
Forward Integration
Backward Integration
Horizontal Integration
Market Penetration
Market Development
Product Development
Concentric Diversification
Conglomerate
Diversification
Horizontal Diversification
Joint Venture
Retrenchment
Divestiture
Liquidation
51
QSPM
Critical Success Factors
Weight
Strengths
Strategic Alternatives
Expanding into
Introducing 3G
rural areas
technology
AS
TAS
AS
TAS
High return on investment
0.10
3.00
0.30
4.00
0.40
Siebel technology centralized computer system
0.10
2.00
0.20
3.00
0.30
Effective advertising leads to higher profits
0.05
3.00
0.15
2.00
0.10
A strong established brand image
0.10
3.00
0.30
4.00
0.40
Club Indigo department servicing premium

customers
0.20
1.00
0.20
4.00
0.80
Extensive coverage nation-wide
0.15
4.00
0.60
3.00
0.45
High cost of distribution
0.10
1.00
0.10
2.00
0.20
Lack of strategic relationship with suppliers
0.05
1.00
0.05
2.00
0.10
Unsatisfactory call centre services for prepaid

users
0.10
2.00
0.20
1.00
0.10
Brand name associated with being expensive
0.05
1.00
0.05
2.00
0.10
SUBTOTAL
1.00
Weaknesses
Critical Success Factors
Weight
Opportunities
2.15
2.95
Expanding into
rural areas
AS
TAS
Introducing 3G
technology
AS
TAS
Increasing number of users in rural areas
0.15
4.00
0.60
2.00
0.30
Account recharging service via internet
0.10
----
----
----
----
Demand for 3G services
0.15
1.00
0.15
4.00
0.60
Wi-max for internet service
0.05
----
----
----
----
Vodafone/Orange trying to enter the market
0.05
----
----
----
----
Introduction of Mobile number portability
0.15
----
----
----
----
Political instability (negotiations for tax rates)
0.05
2.00
0.10
1.00
0.05
Inclement weather can be detrimental for the

service
0.05
----
----
----
----
Rising dollar exchange rate
0.10
2.00
0.20
1.00
0.10
Economic Recession
0.15
2.00
0.30
1.00
0.15
SUBTOTAL
1.00
Threats
SUM TOTAL ATTRACTIVENESS SCORE
1.35
3.50
1.20
4.15
52
From our Strategic Alternatives evaluation, we see that it is more attractive
for Mobilink to implement Product Development Strategy introducing 3G
technology. It has a score of 4.15, which is higher than the score of Market
Development Strategy, 3.50. Introducing 3G services will fulfill the
requirements of many customers and being the first company to provide this
service in Pakistan where there is so much demand for it will fortify the brand
image and position of Mobilink in the market. Mobilink earns high returns on
investment which it can invest in working towards introducing the 3G
technology. The Siebel technology will make it easier to introduce the 3G
technology and services. The strong established brand image of Mobilink will
assure the speed and efficiency of 3G services to the customers and that it
will have no errors or breakdowns. The Club Indigo members who are loyal to
Mobilink will all go for 3G services as they all are mostly corporate people
who require these services all the time, wherever they go. Therefore, the
introduction of 3G services seems to be an attractive strategic alternative for
Mobilink.
53
Section 5:
Strategic Implementation
54
STRATEGY IMPLEMENTATION
A common misconception that we, students of business administration
generally hold, is that the answer to any business problem is the
development of strategic alternatives and then the discernment of one
best strategy. In reality, we see that the development of strategy is only
just one half of the story. The other half is the actual implementation of this
strategy. The translation of the proposed strategy into solid tangible actions
is in fact, the destination, the final objective.
Knowing the path is only just one half of the story,
The other more important half is walking the path.
Businesses & mankind itself, has learnt over the past few centuries that the
actual enactment of the devised strategy or strategies is the primary task
that must be carried out, no matter the cost, and it is in this execution,
where lies the determining factor, as to whether or not the strategy will
succeed.
Therefore, it stands to reason that defective enactments may very possibly
make sound strategies ineffective and skilled implementation has the power
to make a debatable choice successful, therefore, the business concern at
hand, requires a diligent plan and vigilant execution of its implant plan.
55
The Eight Components of Implementing Strategy

Allocating resources
Mobilink has a good financial position so they have abundance in financial
resources. They have trained personnel in both the engineering and
customer service department. Moreover, they have advanced technology in
every department to facilitate their process of meeting internal and external
process requirements.
For introducing 3G technology, Mobilink should train their existing personnel
in dealing with the new technology and accordingly customer service people
need to be educated as well. Financial resources should be focused towards
setting up the technology and side by side advertising in such a way that it
reaches the target audience in the most cost effective manner possible.
Technology also needs to be updated, to make processes more efficient,
especially in terms of increasing bandwidth.
Instituting Best Practices for Continuous Improvement
The PDCA (Plan-Do-Check-Action) cycle should be incorporated in the whole
organization at each level. Each and every employee should be told to
constantly be on the lookout for new ways to do things in the most efficient
way possible, in whatever their job is. This also includes improving quality of
service by improving processes employees are involved in.
Installing Support Systems
A more upgraded version of Siebel needs to be installed which not only
connects the internal management, but also connects the suppliers and cell
sites operators. Also it should allow a direct connection with the in-house
distributors so that fast and on-time purchase and supply of scratch cards
and sims can be made possible. This will further reduce inventory cost.
The one-to-one contact between each level of the Head Office and the Field
Management, as well as among Field Management, renders employee
empowerment since they are able to make decisions about operations in a
more efficient manner. The effort towards real-time communication is also
targeted at reducing time taken for decisions as employees will be constantly
connected with each other and will not be required to move from their
designated seats to work with others.
Tying Rewards to Achievement of Key Strategic Targets

Employees should be evaluated on a consistent basis. Those who actually do
recommend good ideas and work efficiently should be rewarded. No effort
56
should go unrewarded as that can become a de-motivating factor. Those who
perform well should be given titles like employee of the month or quarter
with bonuses.
Building a Capable Organization:
Mobilink should focus on its value chain and find out areas of improvement.
Through continuous improvements, the company can provide greater value
to all its stakeholders and also earn a competitive edge over its competitors.
The company must train its employees regularly to keep them updated about
various aspects of the telecom industry and the changing demands of the
customers. They need to be trained well to deal with the technological
advancements so that they can provide the best services to their customers.
Exercising Strategic Leadership:
The top-management themselves have to be completely involved in the
strategy implementation, seek cost management measures, be well updated
with the technological advancements, give value to employee contributions
and create hype about the new strategy to gain employee commitment. The
corporate culture should be flatter, with cross functional groups and a strong
leadership of the CEO as it is the leader who creates power and force that
constitutes strategy, so that it is implemented effectively.
Shaping Corporate Culture to fit Strategy:
To effectively execute the recommended strategy, efforts towards employee
empowerment need to be made and must be targeted towards increasing
employee commitment to the strategy. Mobilink needs to create a culture
which can accept flexibility and move on with technological advances to
keep up with the changing market demands. Also, special efforts will have to
be made by the top management at Mobilink to explain the new strategy to
all employees and welcome any feedback or suggestions from that front.
Mobilinks policy to employ young, creative graduates seems to be an
effective policy for the company to remain innovative, creative and
resourceful.
Establishing Strategy-supportive Policies:

Mobilink needs to provide training to the employees to deal with day-today
operations, technical problems and customer care. Moreover, proper training
also needs to be given for PDCA, explaining to employees how they will write
short reports on new ways of doing things by conducting research both
inside and outside the organization and also online.
57
Resource
High quality network
to support latest
technological
advancements
Most hi-tech
infrastructure to
accommodate 3G
services
Heavy financing will
be required as
introducing 3G
services is very
expensive
Good PR should be
present to jump
through loopholes
and avoid extra taxes
and licensing issues
Structure
Well established
technological
structure should be
present
De-centralized
structure should be
kept
Culture
High teamwork
among
employees
Very interactive
culture exists
with an open
door policy
High class
business culture
58
The Balanced Business Scorecard:

Strategic Theme:
Operations
Excellence
Financial
Profitability
Customer
Retain existing
customers and
attract new ones
Corporate
packages
Commercial
packages
Internal
Objectives
Measures
Targets
Cost recovery Increased market Recovery of

Profitability
share in the
costs by
post paid
June 2011
market esp.
among the
Corporate
Clients
Increase return on
investment
Initiatives
Offer services at
Super-Premium
rates
Retain existing Sustain no.1

Cater to
customers
position as postcustomers
and
paid service
according
attract new
(41.7% market
to needs:
o
Commerc
ones
share)
ial
Design products
o Corporate
(service
packages)
according to
data usage
patterns in the
past and the
future demands
of customers
Upgrade to 3G
Upgrade to 3G
License
KASUMI crypto
(security
system)
GSM based 3G
system (MAP
protocols)
Increase
bandwidth
Market
research for
the purpose
of usage
patterns
Product
Development
Programs
TICSS service
quality
program
Arrange for
finances
Investors
59
Learning
Technological
leader
Technological Employee training x employees Senior

leader
and
to be hired
technicians to
y employees
development
be trained
Subordinates to
to be
Emphasis on
trained
be trained by
technicians and
the senior
engineers
technicians
Learning Perspective: A companys ability to learn and innovate is directly

linked to its culture. The intense global competition requires from the
companies to make constant advancements to bring in innovation in their
products and processes. For Mobilink to adopt the strategy for 3G, it will have
to stress highly on becoming the technological leader in the industry in
Pakistan. For the desired returns from the implementation of this strategy,
Indigo will have to strengthen its learning on technological grounds. The
primary measures that are to be conformed are to train and develop
employees. Special emphasis is to be given to technicians and engineers
who will manage the whole system. An effective step can be that of training
senior personnel of the company so that later on the learning can be passed
on to the subordinate technicians.
Internal Perspective: This is catered to align the processes, decisions and
actions through out the organization with the strategy to be implemented.
The infrastructure of the Indigo has to be upgraded to meet the
requirements. First and foremost, the acquisition of the license is obligatory.
The technical prerequisites of the upgrade are the KASUMI block crypto
which is the security system for user identification and a GSM based 3G
network system. The targets are to increase the bandwidth according to the
use of the service in the country. This requires a research that sees the usage
patterns in the past and the demands in future.
Customer Perspective: To retain the relationship with customers and to
make new ones, what is required is the alignment of their requirements
according to their concerns of time, quality, performance & service and cost.
Since the service caters premium customers, we will have to deal with the
performance & service issues. For the 3G service the customers will be
divided into the categories of following:
Commercial
Corporate
The packages will be designed according to needs of the two different

targeted consumers. The Commercial customers include small entrepreneurs
and students, while the Corporate clients comprise of the professional needs
60
of the corporations such as buying of service and equipment in bulk and etc.
the usage patterns for both the customers is to be determined by a market
research. More over, to enhance the professionalism in customer service,
The International Customer Service Standard (TICSS) service quality
programs can be initiated in the firm. TICSS runs the TICS Institute with the
objective of making global standards for customer service which enables the
organizations to focus their attention on enhancing their service quality.
Financial Perspective: The primary motive from the financial perspective
is that of recovering the huge cost that Mobilink would incurred, while
profitability and prospering comes later. For fast recovery of the costs, wise
measures can be taken related to the return on investment and market share
in the Corporate clients division of customers of 3G. The corporations tend
to purchase services in huge amounts and relatively do not hesitate in
compromising over paying good price for the technological advancement for
their firms. So the focus on Corporate clients can give speedy recoveries. The
targeted time to recover the expenses is at the fiscal year end in June 2011.
The introduction of 3G would bring in with itself an enhanced upgraded
brand image for Mobilink making it feasible and justifiable for them to charge
super-premium prices for the services that it will provide.
61
Diagnostic Survey
Diagnostic Survey of Primary and Secondary Management
Practices
Strategy
The company has a clearly articulated

and widely understood strategy.
The company has strong external

antennae and quickly anticipates
external shocks, emerging opportunities,
and market downturns.
The company has a very good

understanding of its competitors and can
anticipate competitors moves.
The company is focused on

extending/improving its core business or
businesses and is committed to growing
them aggressively.
Inferior
Average
Superi
or
Subtotal of Strategy score: 14
62
Execution
Inferior
Superi
or
Average
The companys products and services

consistently meet customer
expectations.
The company consistently improves

employee productivity.
The companys programs and initiatives

consistently achieve desired outcomes.
The companys IT systems enhance its

ability to execute its value proposition.
Subtotal of Execution score: 14
Culture
The company sets demanding

performance standards for all of its
employees.
The company consistently raises the

performance bar.
Inferior
Superi
or
Average
63
1
The companys culture is exciting,

engaging, and fun.
The company has clear values that

people in the company abide by.
Subtotal of Culture score: 15
Organizational Structure
Inferior
Average
Superi
or
The company makes decisions quickly.
The company minimizes bureaucracy.
The companys business processes are

simple.
64
The company effectively cooperates

across the organization.
Subtotal of Organizational Structure score: 15
Talent
Inferior
Average
Superi
or
The company has great talent and

bench strength at each position.
The company successfully develops

talent.
The company designs jobs that intrigue

and challenge talented employees.
The companys senior management is

personally involved in recruiting and
developing talent.
Subtotal of Talent score: 16
65
Quality of CEO/Board Leadership
Inferior
Average
Superi
or
The CEO is uncanny at spotting

opportunities and problems before
others.
People at all levels of the organization

feel connected to the CEO.
The CEO matches words with actions

(walks the talk).
The companys board members know

the business and have a significant stake
in the success of the company.
Subtotal of CEO/Board score: 16
Innovation Capability
Inferior
Average
Superi
or
The company is continually transforming

or reshaping its industry.
The companys products, devices, or

innovations are better than those of its
competitors.
66
The company does not hesitate to

cannibalize its existing business or
businesses.
People who have new ideas are

respected and enjoy high status in the
company.
Subtotal of Innovation score: 15
M&A Growth
Inferior
Average
Superi
or
The company consistently identifies

good M&A possibilities.
The company rarely overpays for

mergers & acquisitions.
The company is consistently better than

its competitors at integrating mergers
and acquisitions.
67
The companys mergers and acquisitions

achieve most of their projected cost and
revenue benefits.
Subtotal of M&A score: 11
68

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Strategic Management

Institute of Business Management

Institute of Business Management

Institute of Business Management

Do large firms have a cost or performance advantage

Are there any established brand identities in your

Do your customers incur any significant costs in

Is a lot of capital needed to enter your industry?

Is serviceable used equipment expensive?

Does the newcomer to your industry face difficulty in

Does experience help you to continuously lower

Does the newcomer have any problems in obtaining

Are there any licenses, insurance or qualifications

Can the newcomer expect strong retaliation on

Institute of Business Management

Institute of Business Management

BARGAINING POWER OF BUYERS

Are there a large number of buyers relative to the

Do you have a large number of customers, each with

Does the customer face any significant costs in switching

Does the buyer need a lot of important information?

Is the buyer aware of the need for additional information?

Your customers are not highly sensitive to price.

Your product is unique to some degree or has accepted

You provide incentives to the decision makers.

Institute of Business Management

Institute of Business Management

Substitutes have performance limitations that do not

Your customer has no real substitute.

Your customer is not likely to substitute.

The threat of substitutes in this industry is extremely low. It can be said to be

Institute of Business Management

BARGAINING POWER OF SUPPLIERS

My inputs (materials, labor, supplies, services, etc.) are

I can switch between suppliers quickly and cheaply.

My suppliers would find it difficult to enter my business

I have many potential suppliers.

My business is important to my suppliers.

My cost of purchases has no significant influence on my

Institute of Business Management

DETERMINANTS OF RIVALRY AMONG EXISTING COMPETITION

The industry is growing rapidly.

The fixed costs of the business are a relatively low

There are significant product differences and brand

The competitors are diversified rather than specialized.

It would not be hard to get out of this business because

My product is complex and requires a detailed

My competitors are all of approximately the same size as

Institute of Business Management

Institute of Business Management

Threat of new entrants

Institute of Business Management

Institute of Business Management

Institute of Business Management

Institute of Business Management

Another interesting technology has evolved which has served to increase

Institute of Business Management

Institute of Business Management

EXTERNAL FACTOR EVALUATION MATRIX

2. Account recharging service via internet2

3. Demand for 3G services3

4. Wi-max for internet service4

Institute of Business Management

Market penetration: Mobilink needs to take steps to defend itself