Final Presentation - Telenor V Ufone - Comparison - Global Marketing
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Transcript of Telenor Final
Table of ContentsINTRODUCTION...........................................................................................................................................2
STRATEGY FORMULATION...........................................................................................................................4
VISION.....................................................................................................................................................4
MISSION..................................................................................................................................................4
VALUES....................................................................................................................................................5
EXTERNAL ENVIRONMENT.......................................................................................................................5
INTERNAL ENVIRONMENT.......................................................................................................................7
LONG TERM OBJECTIVES.........................................................................................................................7
STRATEGIES.............................................................................................................................................9
STRATEGY IMPLEMENTATION...................................................................................................................10
OBJECTIVES............................................................................................................................................10
POLICIES................................................................................................................................................10
A STRATEGY SUPPORTIVE CULTURE......................................................................................................11
HUMAN RESOURCE STRATEGIES...........................................................................................................13
DIVERSITY..............................................................................................................................................15
STRATEGY EVALUATION............................................................................................................................16
FUTURE OUTLOOK.....................................................................................................................................22
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INTRODUCTION
Telenor Pakistan, a wholly owned subsidiary of Telenor ASA, launched its
operations in March 2005. One of the leading telecom operators providing
prepaid, postpaid and value-added services to seven million customers, it is
spread across the country with a network of 15 company-owned sales and
service centers, more than 200 franchisees and some 100,000 retail outlets
selling subscriptions and refills. Differentiated packages include TalkShawk,
Telenor Persona and Djuice.
Telenor took a big step seven years ago when it decided to expand in
international markets. The key take points include: right time, targeting of
emerging markets, policy of full management control (avoided joint
ventures) and deployment of a repeatable methodology (for example the
djuice brand). The success of the strategic focus can be understood from
the following1:
1 http://telecompk.net/2008/12/30/telenor-emerging-market-strategy-success-swot/
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Telenor believes:
“What matters most is the right strategy, at the right time and
precision in execution.”
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STRATEGY FORMULATION
VISION2
MISSION3
Telenor's primary goal is to create greater value for our shareholders,
customers, employees and partners, and for society in general. We strive to
be a driving force in creating, simplifying and introducing communication
and content solutions to the marketplace.
2 http://www.telenor.com.pk/about/visionValues.php
3 http://creativez.blogster.com/mission-statements-different
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VISION:
WE'RE HERE TO HELP
We exist to help our customers get the full benefit of communications services in their daily lives.
VALUES4
EXTERNAL ENVIRONMENT
4 http://www.telenor.com.pk/about/visionValues.php
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MAKE IT
EASY
We're practical. We don't complicate things. Everything we produce should be easy to understand and use. Because we never forget we're trying to make customers' lives easier.
KEEP
PROMISE
S
Everything we set out to do should work, or if it doesn't, we're here to help. We're about delivery, not over promising, actions not words.
BE INSPIRING
We are creative. We strive to bring energy to the things we do. Everything we produce should look good, modern and fresh. We are passionate about our business and customers.
BE RESPEC
T-FUL
We acknowledge and respect local cultures. We do not impose one formula worldwide. We want to be a part of local communities wherever we operate. We believe loyalty has to be earned.
POLITICAL
Tax ratesGovernment RegulationsPTASpecial tariffs
ECONOMIC
Level of disposable incomeConsumption patternsDemand shifts for goods/servicesIncome differences by region/customerPrice fluctuationsTax rates
SOCIAL
Per capita incomeBuying habitsEthical concernsAverage level of educationGovernment regulationAttitudes toward customer serviceAttitudes toward product qualitySocial responsibility
TECHNOLOGICAL
Power cutsFibre and opex
COMPETITVE
SEGMENTATION
Market
Segment
Tod
ay
Feature Year
Estimate
Existing Product Profitabi
lity
Youth/
Students
25% 27% Djuice, TalkShawk 29%
Women 10% 20% TalkShawk 21%
Financially
Constraint
40% 23% TalkShawk,
Telenor Azadi
20%
Corporate/ SME 25% 30% Postpaid Packages 30%
CPM
CPM Mobilink Warid Ufone Zong
Critical Success Factor
Weight Rating Score Rating Score Rating Score Rating Score
Advertising 0.1 2 0.2 2 0.2 3 0.3 3 0.3
Product Quality
0.15 2 0.3 2 0.3 3 0.45 3 0.45
Price Competition
0.1 3 0.3 2 0.2 3 0.3 3 0.3
Management 0.1 3 0.3 2 0.2 4 0.4 3 0.3
Financial Position
0.1 4 0.4 2 0.2 3 0.3 2 0.2
Customer Loyalty
0.15 2 0.3 2 0.3 3 0.45 2 0.3
Global Expansion
0.1 3 0.3 2 0.2 1 0.1 3 0.3
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Market Share 0.2 4 0.8 2 0.4 3 0.6 2 0.4
Total 1.0 2.90 2.00 2.90 2.55
The intense competition in the telecom industry has made it really difficult to survive the financial crunch has added to the difficulties of the telecom service providers. The most important factors in that need to be considered while making a strategic plan are customer loyalty which generally is based on the quality of the service provided and this determines the market share of the firm. Advertising is a double edge sword; good promotion attracts the customer while bad one distracts them. In telecom industry a common practice is to eat competitor’s market share by indulging into price wars but one must set a limit otherwise it could backfire and sunk the company. Company needs to plan all its operations depending on its financial health never ever pick up industry giants for one on one fight and avoid taking leverage position instead go for the cost cutting strategy.
By looking at the matrix it is evident that Mobilink and Ufone are at the front while Warid is lagging behind in competition. On the other hand Zong’s performance is average in industry.
INTERNAL ENVIRONMENT
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HUMAN CAPITAL DIVISION
People Excellence & Business Process ImprovementOrganizational Support ServicesSafety and Security
FINANCE DIVISION
Business Planning & FinanceProcurementRevenue Assurance & Fraud ManagementCredit ControlAccountsTreasury and Financial OperationsAudit and Internal Control
IT DIVISION
Business Support SystemIT OperationsIT Security
TECHNICAL DIVISION
Network Planning & DesignImplementationOperations & MaintenanceReal Estate & Site Acquisition
COMMERCIAL DIVISION
Sales & DistributionMarketingCustomer RelationsSegments & PricingProducts & Platforms
LONG TERM OBJECTIVES1. To deliver increased profitable growth
Telenor seeks to increase core mobile revenues. Telenor is also investing in
adjacent markets such as basic financial services and machine-to-machine
(M2M) communication.
2. To strengthen our performance culture
Telenor will continue the successful practice of combining a local approach
with global expertise. This means that the local management teams will
build a unique performance culture based on their own initiatives and in
line with the Telenor governance model, Codes of Conduct, vision and
values and people policy. In terms of Health, Safety and Environment
(HSE), their objective is to improve working conditions and environmental
management by having clearly defined standards across the operating
company and supply chain.
3. To make responsible business a competitive advantage
Corporate responsibility at Telenor will be part of managing risk and linked
to the core business. Telenor has a strong track record when it comes to
sustainable business: it was ranked top performer by the Dow Jones
Sustainability Indexes (DJSI) in 2007 and 2008.
4. To provide a superior customer experience
Faced with an increasingly competitive environment, Telenor needs to
differentiate itself by providing a superior customer experience. In the
vision and core values, they put customer experience at the top of the
agenda. One of their ambitions is to reach a situation where end-users’
brand preference is higher than the Telenor market share.
5. To ensure best practice benchmarking
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A global objective is to achieve a higher reduction in the average
operational cost per minute than the expected decline in average price per
minute. Telenor aims to achieve considerable continued growth in operating
cash flow from its operations.
6. To drive change and constant renewal
To secure a strong industry position, innovation is paramount. Major areas
identified are:
Their long-term ambition is to achieve the same position in broadband
(mobile and fixed) as they have in mobile voice today.
Telenor aims to establish itself as a significant player in parts of the
financial services industry in select under-serviced markets,
establishing a platform for long-term growth.
Telenor controls many valuable assets that can be further developed
together with partners. Partner-driven innovation is a cost-effective
way to create many new revenue-generating services.
Objectives 2006-07 2015
ARPU(Average Revenue Per
User)
$4 $6- $8
Market Share in terms of
Subscribers
10% 40%
Market Penetration 9% 30%
Market Share in terms of
Revenue
7% 30%
EBITA(Earning before
Interest, Tax and
amortization)
5% – 6% 10%
Unprompted Brand
Awareness
20% 90%
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STRATEGIES Market Penetration
Diversification in new directions and regions
Focus on mobile internet
Acquiring a microfinance bank
Global expansion (Telenor has also entered the Indian market by
taking a stake in Unitech Wireless)
Mix of differentiation and low cost
Lower capital expense investment due to recession/ slow market
growth
Utilize 3G technology opportunity
STRATEGY IMPLEMENTATION
OBJECTIVESPrepaid- djuice, talkshawk
Postpaid- persona
Achieve a SIM penetration over 70%
Attain a market share above 25%
Maintain EBITDA in mid thirties
Obtain a ratio of Capex/sales below 25% Capital expenditure was
related to network roll-out to accommodate subscription growth and
increased traffic
Increase Subscription growth
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POLICIES
A STRATEGY SUPPORTIVE CULTURE
SOURCES OF CULTURE AT TELENOR PAKISTAN
PEOPLE
Telenor Pakistan consists of energetic, youthful and dedicated employees
aged 27 to 28 on average. An appropriate match is required between the
culture and employees at recruitment and hiring. If People Excellence
(Human Resource Department) feels that a person will not be unable to
adjust into the organization’s environment, even if he/she is performing
functionally well, the person is rejected.
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POLICIES
Telenor's competitiveness in the market is based on good products and services at the right price. Always meet the group's competitors in an honest and professional manner.
Customers shall be met with insight, respect and understanding. Always try to fulfil the needs of the customer in the best possible manner, within the guidelines for Corporate Responsibility that apply to the business. Customer's personal information shall be protected in accordance with the relevant laws on protection of personal data.
Suppliers shall be treated impartially and justly. Suppliers in competition for contracts with Telenor shall at all times be able to trust Telenor's selection processes. When selecting suppliers follow the group's established guidelines and routines at all times.
As an employee of Telenor you shall not hold another position or carry out work for others during working hours without prior express written permission from your superior.
Telenor is firmly opposed to all forms of corruption. Never offer or accept illegal or inappropriate monetary gifts or other remuneration in order to achieve business or personal advantages for yourself or others. Nor use agreements with middlemen to channel payment to anyone in such a way that may be interpreted as corruption.
Primarily the culture comes from the top management. CEO of Telenor
Pakistan is humble and cooperative. The employees get the message that if
the top management is so accommodating then the employees should
behave similarly. What is important to the CEO becomes important for
employees to identify completely with the organization. There are four
foreigners in the top management but this does not create communication
barriers. They are extra humble to others while individuals of a local origin
are extra sensitive to them so no one feels alienated. The values of
humbleness and free interaction in putting forth ideas lead to a harmonious
culture and efficient communication. The management is easily accessible
to discuss various issues. It is difficult to distinguish between them as the
culture is so homogeneous that it keeps every one at par with others (no
formal protocol is given).
ORGANIZATIONAL ETHICS
While making any decision, Telenor Pakistan has been ethically conscious.
Since Telenor (the parent company) has is origins in Norway, a society with
a soft-oriented and feminine culture, Telenor Pakistan acknowledges its
moral and ethical duty towards its stakeholders and society. Telenor
Pakistan will not resort to bribery or illegal offers to accept any decision;
values will not be compromised to get licensed. If the organization believes
it is not ethically right, it will never take that decision.
In most of advertisements they project themselves as the care taker of the
values of Pakistani people, so they claim to cherish the core cultural norms
and values of the Pakistani people. When the cartoon controversy arose,
Telenor condemned such actions mocking religious beliefs and portrayed
this on their building.
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ORGANIZATIONAL STRUCTURE
The organic structure of Telenor Pakistan promotes cultural values that
result in integration and coordination.
CEREMONIAL RITES AT TELENOR PAKISTAN
Type of Rite Instances of Rite Purpose of Rite
Rite of passage Orientation Sessions Learn and internalize
values
Rite of
integration
Eid Milan Programs, Halloween
Parties and announcements of
Telenor’s success
Build and reinforce
common values
Rite of
enhancement
Legends, Press Releases,
Employee of the Year Rewards,
Employee Promotion and
Rotation
Integrate and
enhance cultural
values
At Telenor, People Excellence reinforces the culture through the concept of
a ‘LEGEND’ for individuals who have performed outstandingly. These
become role models for other people and their examples are quoted on
various occasions (forum or ceremonies), so every employee is internally
motivated to work harder.
The new recruits are given orientation sessions where they are made to
familiarize with the values and norms of the organization and how they can
contribute to the organization even better. They are also provided with a
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Joining Book that comprises of the code of conduct and complete structure
of policies and values.
HUMAN RESOURCE STRATEGIESThe Human Resource at Telenor Pakistan is their core competency. The
reason is that the employees create a culture and all the achievements of
Telenor are attributed to its flexible culture. It is necessary to motivate and
retain this asset of the organization. For this purpose, training and
compensation is provided to employees along with other motivational
techniques.
TRAINING
The methods of training differ from function to function. On-the-job
training is required in the Customer Relationship Department (CRD)
and similar system training in the IT Department. Management
Training Programs combine experiential learning with theory. Leaders
are chosen according to the following role expectations:
LEADERSHIP EXPECTATIONS FOR TELENOR PAKISTAN
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COMPENSATION
The core compensation includes:
Base salary
Bonus/commission
Long-term incentive plans
In addition, Telenor offers a total package that may include insurance,
recreational activities and other benefits adapted to the local market
and individual employee’s need.
Managers are rewarded according to the achievement of assigned
goals. Apart from monetary rewards, such as variable
pays/increments, other motivational tools such as recognition
(Employee of the Year rewards) are used.
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Passion for Business
Empower People
IntegrityChange and
Constant Renewal
Operational Ecellence
LEADERSHIP EXPECTATIONS
CAREER GROWTH
Initially, qualifications are the defining criterion for fresh graduates.
For career growth, the right mix of performance on the job and
performance potential for the other level is imperative. Apart from the
right attitude, knowledge also matters. If an individual from Finance
gets a higher degree, for instance, becomes a chartered accountant
then the chances of growth increase. There are no specific career
paths: Vice President (VP) of Human Capital Division (HCD) became
the next Chief Marketing Officer (CMO).
EMPLOYEE MOTIVATION
Underperforming managers are encouraged through coaching and
counseling by their respective directors or the director of People
Excellence. The turnover is not high as compared to that of the
industry. There is no defined employee exchange program. Employees
performing exceptionally well are taken up to work in the Telenor
Group.
Relocations are common in the organization: employees are
transferred from People Excellence to Finance or from Procurement
to Customer Relations. Investment per employee is placed at the
higher end of the industry.
DIVERSITYTelenor Pakistan is keen to promote diversity and has achieved good results
in this area. Telenor has developed requirements for diversity in both
recruitment and our management development programs. There is an
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appropriate blend of less seasoned and experienced employees. No quota
has been assigned; the best-fit candidate (according to the job
requirements) is employed. At the office level or call centers, even fresh
graduates are apt but the director level requires a masters degree and
preferably some work experience.
Telenor Pakistan has a large proportion of females who are recruited for
internal leadership development programs and executive positions on the
basis of past performance. The organization is working on Day Care Centers
to help female employees manage their responsibilities after settling down.
Relocation issues are dealt cooperatively when female individuals move out
of the city after marriage and wish to continue working. They are relocated
and facilitated in the new city.
STRATEGY EVALUATION
REENGINEERING: AFTERMATH OF FINANCIAL CRUNCH
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Telenor has attained a competitive advantage in the market by aligning
competences and strategies. Highly motivated employees and flexible
culture enables them to achieve an edge over competitors.
Improving our performance management
The Telenor Group aims to create a stronger link between the strategy
process and performance monitoring. All operating companies will
implement a new and improved management model where strategic
objectives and ambitions are monitored closely at both the company level
and the lower department level.
Since its launch of services in March 2005, Telenor Pakistan has exceeded
all expectations: It has created the second largest mobile network and the
largest and most advanced data network in the local market, turned into the
second highest revenue-generating mobile player with the highest Average
Revenue Per User (ARPU) in the market, and become the second largest
mobile player in the market with 18 million active subscriptions in little
more than 3 years of operations. During the first half of 2008, Telenor
Pakistan added 3.24 million subscriptions against the industry average of
1.63 million, taking 33% of the market share of net additions over the
period – the highest in the mobile sector in Pakistan.
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Service Quality & Performance through a
superior network design
Convenience through the distribution setup
Simplicity and trust through pricing structure and transparency
Efficiency through alignment of structure
and strategy
COMPETITIVE ADVANTAGES OF TELENOR PAKISTAN
The company has created 2500 direct and more than 25000 indirect
employment opportunities with 100,000+ retail outlets and 200+ franchises
in addition. 99.9% of these employment opportunities belong to Pakistanis.
Initiated with a relief effort worth 95 million rupees in the wake of the
devastating earthquake of October 2005, Telenor Pakistan’s community
contributions have extended over the years to include education,
empowerment, enterprise, and environment - with special focus on bringing
the telecom promise within the grasp of the most disadvantaged sections of
the society.
Telenor Pakistan has received several awards for its solid performance in
key areas of activities:
Federation of Pakistan Chambers of Commerce & Industry’s Telecom
Excellence Award in Foreign Direct Investment in June 2006
Central Board of Revenue’s High Tax Payer Award 2004-5 in January
2006
The Pakistan Society of Human Resource Management’s Preferred
Graduate Employer Award for Most Preferred Telecommunications
Company 2007 among MBA students
SAARC Communication Industry Conference 2007’s Most Innovative
Mobile Operator Award and Mobile Operator with the Most Consumer
Pull Award
Telenor Global Brand Award for the year 2007
All Pakistan Dawn Aurora Advertising Awards in three of five
nominated categories in March 2007
The National Forum for Environment & Health’s Annual Environment
Excellence Awards 2008
Lahore Chamber of Commerce & Industries’ Appreciation Award for
the Largest FDI and Rawalpindi Chamber of Commerce & Industries’
Achievement Award 2008
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The Helpline Trust’s 2nd Corporate Social Responsibility Award 2008
Telenor Pakistan is committed to bringing true mobile innovation to the
under-served masses of Pakistan. The company has picked up two Universal
Service Fund projects in order to provide connectivity to the yet
unconnected in the remotest areas of Pakistan. It aims to invest strongly for
further network expansion into the rural areas and for the rollout of third
generation of mobile technology (3G) in Pakistan.
SWOT Analysis
An overall evaluation of Telenor’s Strengths (S) Weakness (W)
Opportunities (O) and Threats (T) are as follow:
Strengths
Network quality & design
Superior customer care
Financial Strength
Excellent Coverage & Distribution.
Commercial Launch of LDI & mobile services
Contract with Siemens & Nokia
Brand image of Quality
PTA initiatives
E-commerce usage.
Weaknesses
Relatively low market share
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Low profit margins
Negative cash flows in the initial years
Opportunities
Favorable Macroeconomic indicators
low cellular market penetration
Inefficiency & poor performance of other mobile networks
Co branding e.g. Ufone with ABN AMRO
Strategic Alliances & Infrastructure Sharing Facilities
International Mobile Equipment Identity System
Threats
Rolling Customers
Privatizations & deregulations- increased competitions.
Grey Traffic
MNP mobile number portability
Wireless technology at boom
Public pay phones & calling cards usage where network is not
available
Propagandas attacking brand image
Strengths Weaknesses
Opportunities SO Strategies WO Strategies
Introducing 3G Diversifying into
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service
Make the post
paid package
more attractive
similar industries
e.g. DSL services
More attractive
pre-paid packages
Threats ST Strategies WT Strategies
Co branding with
companies in
other industries
e.g. Banks
Use other
mediums of
promotion other
than conventional
advertising
Protect image
through constant
CSR efforts
Capitalize and
promote EDGE
technology
BCG
Boston Consulting Group is used to help corporations with analyzing
their business units or product lines. This helps the company allocate
resources and is used as an analytical tool in brand marketing, product
management, strategic management, and portfolio analysis.
This BCG matrix is with respect to the competition that exists for Telenor in
the telecom industry. This includes the following mobile operators:
Mobilink
Ufone
Warid
Zong
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The reason why all the companies are place in either question mark or star
is that it is a growing industry and overall the market share is increasing
however individual players may not be doing well.
The reason why telenor and Ufone are placed in stars is that their relative
market share is increasing which is visible by their sales and ARPU.
Mobilink although very old in the market is now losing its relative market
share to both Ufone and Telenor. Mobilink is now investing in its brands
and have engaged in price wars to stay competitive and regain its market
share.
Same is true for Warid and Zong, the only reason why they are placed in
question mark is that the overall industry is growing however their
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individual performance has been poor over the years. Ufone has changed its
strategic policies. It has gone through rebranding and emerged as a more
successful company.
Now if we talk about Telenor ,it has gained a favourable position in the
industry through effective advertising and packages. It can also be
attributed to effective utilization of its Human Resource to gain a
competitive advantage in the in the industry.
FUTURE OUTLOOKFollowing can be the future plans of action that Telenor can pursue in order
to ensure sustainable growth:
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Improve network quality to make it a sustainable competitive
advantage
Develop an employee exchange program for enhanced employee
motivation
Establish a coordination department/integrated IT system for effective
communication
Introduction of employee stock options
Quota for the disabled people for greater CSR and diversity
Building an organization with competency, capabilities and resource strengths
Developing Technical Know How in Employees
Developing budgets to steer ample resources into critical value chain activities
Creating strategy supportive policies and procedures
Instituting best practices and a commitment to continuous improvement
Installing support systems and Value added Services
Maintain low cost
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