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BUSINESS SCOPE
Telecom business is purely service based business where customer have lots of options available, if there is any mishaps occurs customer switch the product without waiting because switching cost is very cheap in this sector. Therefore for marketer if they want to achieve the edge over competitor they must be innovative, best quality service provider and cost efficient. They must find that area which are still hidden or cannot be recognized yet, because when we talk about service industry all you need to be efficient day by day with the passage of time. WANT TO BE IN: The undertaking must be the leader of the sector. So accordingly work hard to achieve that vision.
Regions
The corporation provides telephonic and internet services nation-wide. The percentage of exposure of the services is high in rural areas but there is very less coverage in urban areas. So further development is required in those areas where reach of telecom is difficult. This will allow this company to cover large chunk of the market. Apparently the initial cost of investment would be higher but the future revenue cover all the incurred cost, if plan strategically.
Market Structure
Subsidiary of PTCL
Channel
Create customers
Ufone could create customers by teamwork and loyalty towards company with their core values and brand values i.e. providing superior services of value chain. Core Values: Professional Integrity Customer Satisfaction
COMPANY ANALYSIS
Operational analysis
Ufone operational performance has been very encouraging. Despite the stiff competition in Pakistan telecom market which has led to reduction of prices to bare minimum level, due to its aggressive policies and exercising strict control over expenses the company managed to improve its revenue and after-tax profit by 87% and 54% respectively, as compared to last year.1 Future plans keeping in view the growth potential of the cellular industry there is no option but to be aggressive in order to remain a potent force in the cellular industry. In 2007-08 UFONE made an investment of USD 232 Million in order to increase its market share of subscribers. UFONE has also finalized a huge network expansion contract amounting to about USD 550 million in order to extend cellular network to new cities, towns and highways and enhance its current installed capacities in existing cities.2 A strong focus of Ufone is on maintaining high quality of service, which is always a benchmark of Ufone, increasing usage and exploring new revenue streams on value added services, market visibility through various market initiatives to fulfill subscribers satisfaction and demand and above all to increase the value of investment for the shareholders.3
7. Human Resource Department Recruitment and Compensation Benefits Training HR Operations Strategic Planning Department
Business exposure
Ufone, subsidiary of PTCL therefore considered as is the leading company in the telecom sector also its expands its boundaries in internet service providers and in 3G. Business in which we are not in: Ufone is not catering the corporate customer so it is the business in which they are no in also Ufone dont have 4G.
355.6
367.3
409.2
445.7
8.919%
Target group division: Income wise Lower Middle1 to Upper Lower2 Justification: 1. In Pakistan from beggar to business man all are having cell phones. 2. From Upper Lower onwards elite class prefer of having Mobilink. Target group division: Age wise (division 100% of Ufone offer) 13 19 Teenagers available (60%) 20 27 available (20%) 27 38 - available (30%) 38 45 - nil 46+ (onwards) - nil Justification: One of the factors of having low position in market is because the leader i.e. Mobilink1 is targeting the business and elite class and also having past set up as a first GSM. On the other hand, its comparison with Telenor, Ufone rates are slightly higher than Telenor 2. Since the target audience of Ufone and Telenor are usually teenager oriented thats why Telenor got low cost advantage. Also, Zong acquires 4G but Ufone have 3G.
Segment
37 Million users 28.47 Million users 1 Million users 25 Million Rs409 billion Rs445.7 billion 33.5%
Overall
29.8% 25.2% 25.2% 15.4% 52.8% 71.7% 75%
Findings:
Ufone share 19.3% Ufone earns Rs.25 billion PKR Serves 24 million customer Operates in all countries, around the globe1 Market is bigger than perceived Company has more competitors Ufone got third position (2013) and 26% market share Before the arrival of Telenor Ufone is on second position but in 2009 Ufone lost its market share and Telenor got second position. Since then Telenor is on second position and Ufone is at third position. Telenor is trying to dominate on different segments, therefore increase its market share It can highlight that major chunk can be lost if not keep focus on value chain Lost in 4G
Reasons:
The main problem in the current era faced by the telecom industry in Pakistan is increased taxes imposed by government. The companys existing in telecom sector are facing major decline due to the fact. In the budget, government had increased the rate of GST on telecom sector significantly and analysts are of the view that it may have an advance impact on telecom usage and resultantly, the GST collection may drop considerably from the sector. Most people are dissatisfied with the current level of prices that Ufone is offering. In fact, prices are the major reason why people dont prefer Ufone (in comparison with Telenor). Other than price customers also dont prefer Ufone because of the limitation of packages that it offers. Even though a Mobilink is present in the industry before the entry of Ufone, the penetration of Ufone has resulted in a greater number of new mobile customers. We can say that Ufone
has attracted both the existing customers, and to a larger extent, has captured the market segment that was previously not using mobiles but now Telenor is snatching that share. Despite bidding for 15MHz in the 3G spectrum, Ufone could only win 5MHz due to lack in technical aspects.
Potential impact Ufone Influence on Sales Yes and Margin Customization Margins/sales under pressure No
Mobilink Yes
Telenor Yes
Yes
Yes Yes
Yes Yes
Comparatively No low
SWOT Analysis
SWOT is the analysis in which we compare internal strength and weaknesses to external opportunities and threats. For every company its SWOT must be unique which mean not generalized (as of competitors) in case of Ufone the SWOT is: S W O T Subsidiary of Ufone; Govt. support, 3G Inadequate understanding of customers; control on advertising budget, 4G Upaisa return, Value added services, Rural areas coverage, Unidentified services, can target corporate sector Declining market share; Zong
After SWOT analysis we need to compare every factor with each other for the further understanding of the outcome. This comparison leads the clear picture to the manager of costs and benefits. Given below matrix is summarized the SWOT findings:
(S-O) Launch new products glancing the high demand Develop market share on the basis of trade off and strategic fit (S-T) Acquire new technical assistance via government support Subsidiary operating structure allows for greater diversification and increased efficiencies
(W-O) Research required for the understanding of customer actual need Hire more competent technical staff to beat the innovation Acquire 4G license (W-T) Arrival of new competitors Its near to be beaten by Zong as well
PEST Analysis
P E S T Due to government intervention, telecom sector is paying high amount of tax. That is why since last year price of prepaid or post paid is increased. The FDI is nil since past years, the economic down turn affects this sector a lot. But due to high demands of sim this sector is still showing profitability in their income statement. In our society every age bracket or almost every age bracket having cell phone i.e. sim is essential for them. All the competing telecom company is providing same technological features so this area needs some unique technological advancement.