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Strategic Management Analysis Of Telecom Industry Commerce Essay

Purpose – The paper aims to stress a positive alteration toward the strategic direction and determination devising. It brings out a few lacking that are of import to cognize for the industry.

Design/methodology/approach – The paper opted for an exploratory survey including interviews and group treatment with employees stand foring center and senior direction. Data is increased by using the analytical tools, the descriptions of internal procedures, and organisational constructions, magazine articles and the web.

Findingss – The paper provides practical apprehensions about the strategic direction analysis and organisational construction.

Practical deductions – The paper includes elaborate analysis of the assorted factors that need to be catered for. That includes SWOT analysis of the organisation and deep survey of structuring of organisation.

Originality/value – The paper fulfills the demand of researching the strategic direction and organisational construction survey.

Keywords: Strategic Management, Organizational Structure.

Introduction

Telecom industry is the aggregation of all industries and companies supplying phone service, informations or amusement to consumers and concerns. It is the fastest turning industry in Pakistan and with highest per twelvemonth growing rate in tele-density Worldwide ( Atta 2008b, P.1 of 1 ) it has become a anchor in Pakistan ‘s economic system. Telecom industry provides many employment and investing chances due to high grosss generated via big figure of telephone endorsers. Along with chances, this industry besides provides huge installations to pass on and link globally in a better, dependable and modern mode.

Background:

Telecommunication services in Pakistan were started in 1947 when Posts & A ; Telegraph Department was created. As an extension, Pakistan Telephone & A ; Telegraph Department was established in 1962 to supply fixed telephone services.

Pakistan Telecommunication Corporation ( PTC ) started under PTC Act 1991. This overlapped with the Government ‘s competitory policy and encouraged the engagement of the private sector, ensuing in award of licences for card-operated wage phones, cellular companies, paging and, recently, informations communicating services. Prosecuting a progressive policy, the Government announced its programs to privatise PTCL in 1991.

In Pakistan, the Pakistan Mobile communications Ltd ( “ Mobilink ” ) started its operations in 1994. Mobilink ( subordinate of the Orascom Telecom Holding ) with more than 31.6 million endorsers is Pakistan ‘s prima cellular and Blackberry service supplier. Other major rivals are Telenor 23.4 million, and Warid ( Abu Dhabi Group ) 16.38 million, Ufone 18.93 million and Zong ( China Mobile Company ) 6.76 million. By April 2010, there were 97.6 million nomadic phone endorsers in Pakistan. PTCL launched its Mobile and informations services houses in 2001 i.e. Ufone and PakNet severally. In 2006, Government of Pakistan decided to privatise 26 % of PTCL. Etisalat, with a big border in the stake was able to acquire the portions.

Purpose:

The intent of this study is to understand the organisational construction and strategic direction procedure by using analytical tools- SWOT analysis. Improvements in strategic direction procedure and decision-making will be suggested.

Purposes and Aims:

Conduct interviews and treatments with center and senior degree direction forces from the telecom industry

Conduct SWOT analysis over feedback received from the interviews and treatments

Study the organisational construction of Telenor and Ufone

Reach out nomadic endorsers to acquire feedback and to assist specify QoS marks and KPIs

Supply suggestions about betterment in strategic direction procedure and determination devising

Scope:

Survey: Design questionnaires and behavior interviews with center and senior degree direction

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 and Professionalism )

Research Methodology

Document/Literature reappraisals:

The first method we adopted in the execution of our research methodological analysis was reexamining work already done in the field closely resembling our analysis. This was done on the footing of multiple paperss most notably of other telecommunication companies and analysis done on the footing of different fortunes factoring in the company ‘s strategic direction and determination devising procedure.

Mixture of Quantitative and Qualitative Survey:

The intent of qualitative analysis is to acquire a complete elaborate description whereas in quantitative analysis we classify characteristics, number them, and even build more complex statistical theoretical accounts in an effort to explicate what is observed.

Qualitative analysis allows for all right differentiations to be drawn because it is non necessary to shoehorn the information into a finite figure of categorizations. It is besides used to look into theA whyA andA howA ofA determination devising, non justA what, A where, A when. This besides justifies the logical thinking behind acquiring smaller but focusedA samples instead than acquiring larger samples.

Quantitative analysis fundamentally leads to the systematic empirical probe of societal phenomena via statistical, mathematical or computational techniques. Its chief objectiveA is to develop and employA mathematical theoretical accounts, A theories and/orA hypothesesA pertaining to phenomena. In easier footings it fundamentally means that quantitative research worker asks a particular, narrow inquiry and collects numerical informations from participants to reply the inquiry.

Official Perception studies:

These studies will be qualitative studies conducted on the footing of information gathered by senior functionaries from managerial degree employees in the telecommunication industry. These studies will be in the signifier of descriptive inquiries and will be used to analyse different factors involved in the company ‘s determination devising procedure.

This analysis will be done in the signifier of Key Informant Interviews and will be held taking into history a senior functionaries ain analysis of the company ‘s strong and weak points.

Customer Satisfaction Surveys:

These studies will be quantitative studies distributed amongst people in the signifier of questionnaires. This will be done in the signifier of Random Selection Surveys hence to cover major part of our required research.

Literature Review

Strategic Management Procedure:

Strategic direction procedure defines the schemes of the organisations. It is the procedure by which directors choose a set of schemes for the organisation that will help it to accomplish better public presentation and QoS marks. Strategic direction is an on-going procedure that has three chief phases viz. : strategic preparation, strategic execution and rating. Organizations use strategic analysis tools for the strategic direction procedure

Organizational Structure:

Organizational construction determines hierarchy and the coverage construction in an organisation. These may be classified into different types based on a assortment of things chiefly graduated table of the organisation and the range of its operations. Traditional construction organisations are based on functional division and sections, assorted types of constructions under these constructions are Line Structure ( Used in Small Organizations ) , Line and Staff Structure ( Used in Large Organizations ) , and Functional Structure ( Division based on the maps a individual perform ) . Divisional structured organisations are based on functional division and sections they have. These may be classified as Product Structure, Market Structure and Geographic Structure. Some other sorts of organisational constructions are Matrix Structure, Network Structure and Team Structure..

Literature reappraisal has been conducted for this research article to understand the constructs underlying strategic direction procedure and the organisational construction. This will assist to transport out the needed work of study, SWOT analysis, and for doing the suggestions based on the conducted research.

Consequences

Strategic Management Process

Strategic direction involves directors from all degrees of the organisation to explicate and implement schemes to supply superior tantrum between organisation and its environment to accomplish set ends of the organisation. This involves action and decision-making. Three phases of strategic direction procedure are strategic planning, execution and rating. The nine stairss embracing these three phases are Assessment, Strategy, Objectives, Strategic Maps, Performance Measures, Initiatives, Automation, Cascade and Evaluation. The procedure can be described by the flow chart presented in figure 1 below:

Figure: Strategic Management Procedure

Strategic Management Process is accompanied with SWOT analysis, which provides informations to explicate and implement schemes and alterations to accomplish the mark ends and QoS. SWOT analysis helps to analyze internal ( strength and failings ) and external ( chances and menaces ) elements of a concern. SWOT analysis can assist the direction squad in a concern to detect:

What the organisation does better than the rivals do?

What rivals do superior than the organisation?

Whether the concern is doing most of the available chances?

How a concern should respond to alterations in its external environment?

SWOT analysis for Telenor Pakistan and Ufone Pakistan has been conducted as instance survey.

SWOT Analysis of Telenor Pakistan

Telenor Pakistan is a ownership of the Telenor group, an international service supplier in footings of voice, informations programs and communicating services across Europe and Asia. It is amongst the largest nomadic service operators in the universe over 179 million Mobile endorsers ( 2010 ) . Telenor Pakistan has late reached the landmark of 30 million endorsers in Pakistan. It is now 2nd in footings of market portion in Pakistan after Mobilink. Case survey of SWOT analysis for Telenor Pakistan has been discussed as follows:

Strengths:

Telenor introduced the construct of “ Mobile Television ” for the really first clip in Pakistan

Telenor provides desirable bundles for every market sector like djuice for young person and monetary value witting category and character for upper and elect category

State of art engineering like the latest belowground fibre optical web

Telenor Pakistan stands at figure 2 in footings of market portion and coverage after Mobilink

Telenor Pakistan introduced the construct of free international roaming during Hajj plan

Telenor operate with more than 30 million endorsers all over the Pakistan

Failings:

There is no institute in Pakistan that provides formal instruction in the Fieldss of networking and other nucleus proficient capablenesss so Telenor demands to hold a major ball of their forces trained from establishments outside of Pakistan

The client service centres are non coming up to national and international criterions as most of the clients ‘ calls go unattended because of the hapless call centre public presentation

The prepaid connexion provided by Telenor Pakistan is relatively expensive compared to other rivals like Warid Telecom and Ufone Pakistan

Due to the buffering job, Telenor mobile Television has hapless ocular quality

Franchise distribution system is non up-to standards- This stands as the common job for all nomadic services operators. Record maintaining is besides an associated job

Opportunities:

Engagement within the turning Telecom industry and extension of coverage country

Attract more endorsers and increase market portion

Product line and bundles enlargement concentrating at assorted age groups and societal categories

Cost price reduction schemes

Product invention and attractive force

To go client size specializer

Menaces:

Monopoly of PTA and disposition towards province owned telecom service suppliers

At any clip PTA can modify the services of telecom sector

Cutthroat competition runing in kinked demand oligopoly

Execution of WTO policies will ensue in unfastened & A ; competitory pricing in services sector entirely in telecom

There is an instability between monetary values of inputs & A ; end products

SWOT Analysis of Ufone Pakistan

Ufone is a Pakistani GSM cellular service supplier, a subordinate of Pakistan Telecommunications Company Limited. Its operations started from Islamabad on January 29 2001. Ufone has progressed and attracted clients and expanded its coverage country by adding new metropoliss and highways/motorways. After the denationalization of PTCL, 26 % portions of Ufone were sold to Etisalat. Around $ 65 million rupees have been invested by Ufone to setup its up-to-date proficient substructure to supply fast informations services and high quality voice. On its constitution, Ufone cater most significantly for the in-between category, by denoting low rates and different bundles with Urdu names like Jazba etc. Ufone has extended its client support in a really planned and appropriate mode with a strategic web of traders and mercantile establishments for people.

Strengths

Ufone is host to value added services and informations connectivity

Ufone offers the most sensible monetary values for its users

Ufone represents as the subordinate of PTCL

Prepaid roaming in Pakistan was foremost launched by Ufone along with the Multimedia Messaging Service ( MMS ) and GPRS services

Ufone ‘s Prepaid bundles are now considered to be one of the most favourite bundles by the young person market

GPRS Roaming installation is available across 85 states with more than 115 Live Operators

Ufone has got the best e-marketing section in competition to the other Mobile operators

Failings

Ufone ‘s biggest failing is that it can non run into the demands of its clients

Centralized construction of the organisation has failed to supply proper way over direction and policies

Ufone is non near to expected profitableness

It is a subordinate of PTCL so it is dependent on PTCL and authorities for policies

The franchise web of Ufone is non able to run into the demand of increasing figure of nomadic endorsers

Ufone has non provided advanced services to its endorsers compared to other operators

Its coverage in South part is rather good but in north its coverage is hapless

Ufone got some internal jobs after its denationalization to Etisalat when some employees became unhappy with the wage graduated table

Opportunities

Ufone has tremendous ability to spread out globally, but since it is a authorities owned organisation, the economic state of affairs in Pakistan does non allow this

With the precise selling scheme and planning they can derive much more subscriber ‘s market

The demand for value added services in increasing with development in the IT & A ; Telecom sector, Ufone should come up with betterments in its value added services in order to derive taking border in the market

“ Ufone booth ” can be launched to enable services like ATM machines for Ufone clients

Ufone should spread out their Franchise web in distant countries to supply competition to Mobilink and Telenor which are invariably increasing their franchise web

Ufone should spread out its web coverage to the Northern countries of the state every bit good with the ground that in those parts of the state non excessively many companies are giving services and if Ufone gets success in supplying its services at that place so it will decidedly pull a immense ball of people and its figure of endorsers can increase

Menaces

Government intervention in footings of revenue enhancements

PTCL should supply more fiscal support to Ufone to heighten profitableness of its subordinate company

Bing a duty, Ufone is supposed to supply good pension benefits to its employees, which sometimes appears like a great thought, but they are now confronting jobs as big sum of people are get downing to roll up

Ufone, like many big companies with quality employees ‘ health care public assistances, is enduring from a big fiscal hit

Some force per unit area groups are objecting on the towers that are installed in domestic countries. Harmonizing to their point of position it is non good for wellness for the people who are straight exposed to the radiations caused by the towers

Pakistan is sing serious jobs sing the economic system now yearss which will finally besides affect Ufone. The current downswing in market is non good for any kind of concern may that be telecommunication

Organizational Structure

Organizational construction defines the coverage and hierarchal construction in an organisation. Literature reappraisal presents an account about the organisation construction and the different types of it. Case surveies of Organization construction for Telenor and Ufone Pakistan will be presented here.

Organization Structure of Telenor Pakistan:

The organisational construction of Telenor Pakistan is functional construction. The cardinal characteristics are listed as follows:

There are eight sections, Finance, Customer Services, Commercial, Technical, Information Technology, Human Resources, Administration and Legal Affairs, each supervised by a Senior Executive Vice President or Executive Vice President. Each of these sections follow a level construction to hike common procedures and co-operations between lower staff and directors

Each section has several subdivisions and a director is in-charge of each subdivision. He controls the overall operations of that subdivision

Duty of each executive in charge includes all the services that are related to him

Wide span of control in full organisation makes it convenient for the lower staff to make top directors and hike coordination between them

The categorised phases of organisational chart of Telenor Pakistan is shown in figure 2 below, the complete organisational construction has been attached as appendix Angstrom:

Figure: Categorized Phases of Organizational Structure of Telenor Pakistan

There are seven categorised degrees. Undertakings and responsibilities of each individual is obviously defined at the clip of fall ining the organisation. Duties can be changed subsequently, but staff has good cognition about their occupation duties from the clip they join the organisation. There is no communicating or motivational issues because of the superimposed construction and the unfastened civilization predominating at each phase. There are no illustrations of de-motivation nevertheless in certain countries like Customer Relationship Department or Customer Service Centre different client questions and expostulations can raise defeat degrees when qualities of service marks are non being met. Directors in these sectors interfere to work out jobs.

On every juncture an employee has an thought, he/she is stimulated to near the direction or people at higher degree of hierarchy and portion it with them. Boxs are besides situated at assorted topographic points where forces leave their thoughts, suggestions and concerns. To remain anon. is their legal right.

The Communications Department tries to make to certain determinations if the thoughts can be executed and so debates them with the employees concerned. There is besides a formal platform at the group degree known as SEED where invention is encouraged and new thoughts about gross constructs and cost effectivity can be discussed. Employees are welcome to lend and subject their innovating thoughts. If the thoughts that are shared are executable so they are executed in the organisation. Employees are so rewarded consequently for their helpful parts.

Organization Structure of Ufone Pakistan

The departmental and organisational construction for Ufone Pakistan has been shown in figure 3 below:

Board of Directors

Chief executive officer

Project Director

Marketing & A ;

Gross saless

Finance

Information System

Customer Care

Engineering

Quality

Assurance

Information engineering

Hour

& A ;

Admin

Figure: Organizational Chart of Ufone Pakistan

The organisational construction of Ufone Pakistan is intercrossed in nature where there is a formal control on every employee in the organisation. The concatenation of bid is decentralized and each forces in the organisation have his/her ain undertakings and duties, which he/she has to carry through.

The cardinal features of the Organizational Structure are as follows:

Ufone has a thin or horizontal construction

The company has a decentralized construction doing the flow of information easy and simple

Ufone has different sections where every section has its caput and all caputs are interconnected

Concept of departmentalization remains invariably in pattern at Ufone

Different sections work within their functional divisions to lend towards the success of the concern and to achieve the set marks

Ufone has 83 sub-departments that are working expeditiously. All interact with each other towards the smooth running of the organisation

The organisational construction of Ufone consist of of Board of Directors who are reported by the Chief Executive Officer

CEO is a great supervising to the eight major sections of the company. These are Finance, Marketing, IT, Engineering, Strategic Planning, Human Resource, and Gross saless Departments

Discussion and Brooding Remarks

Case surveies for strategic direction procedure and organisational construction has been discussed for Ufone and Telenor. A comparing between these two organisations has been made because these two organisations had remained in close competition to each other in footings of endorser ‘s market. Recent studies have shown that Telenor Pakistan has passed the landmark of 30 million endorser base holding a market portion of 26 % . It has shown consistent growing due to the technological development and efficient strategic direction procedure. On the contrary, Ufone ‘s market portion in footings of endorsers has shown diminution, which is now 19 % . The major factor for this is the policy devising at executive and senior managerial degrees. Policy doing for Ufone is by and large done by functionaries stand foring the authorities as Ufone is a subordinate of authorities owned Pakistan Telecommunications Company Limited. Besides this, at the clip of denationalization of PTCL, it was anticipated that PTCL and Ufone would be turned into big net income and efficient organisations, but Etisalat group could non convey approximately many alterations towards the operational and strategic direction procedure.

Telenor ‘s endorsers ‘ base, technological growing, selling and web coverage has surpassed those of Ufone with a important border and today Telenor is showing close competition to Mobilink, which is considered as a mature organisation in Pakistan ‘s Telecom Industry. An of import differentiation between Mobilink and Telenor is the post-paid connexion base, which is usually defined by concern and corporate users. Telenor lags behind Mobilink in footings of post-paid endorsers by a immense border ground being that Telenor ‘s prepaid connexion is expensive and provides much lesser value added services compared to Mobilink.

In the treatment about organisational construction, a point worth observing is that Telenor has a functional construction where each section has a set of maps good defined. However, a Hybrid construction uniting both functional and horizontal construction is recommended as it can supply sweetening in coordination and communicating between cross-functional squads and can besides supply improved client service. Besides this, the construction should be defined such that it is able to suit any alterations that might look appropriate. These alterations can be easy accommodated in horizontal construction.

Since Telenor is a portion of Global Telenor Group, employee exchange plan should be introduced at center and senior degree direction in order to portion the degree of managerial and proficient accomplishments and expertness. Besides this, stock option could besides be provided as a motive to the employees.

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