THE COPPERBELT UNIVERSITY
Transcript of THE COPPERBELT UNIVERSITY
THE COPPERBELT UNIVERSITY
SCHOOL OF BUSINESS
NAME : DABBYSON ZIMBA
CODE : BS 450
COURSE : STRATEGIC MANAGEMENT
PROGRAM : BACHELOR IN ACCOUNTANCY
LECTURER : DR. MWIYA
INTRODUCTION
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TABLE OF CONTENTS
CONTENT PAGE
INTRODUCTION……………………………………………………………………. 3
BACKGROUND……………………………………………………………………… 4
FRAMEWORK………………………………………………………………………. 5
DEFINING STRATEGY, STRATEGIC STATEMENT……………………………. 6
STRATEGIC CHALLENGES AND OPPORTUNITIES……………………..7
Zamtel in Huge losses, firm is technically insolvent…………………… 7
Issue…………………………………………………………………… 7
Recommendation……………………………………………………. 8
High Operating costs……………………………………………………. 8
Recommendations…………………………………………………….. 8
CAPABILITIES AND ADVANTAGE…………………………………………. 10
Zamtel‟s Generic Dynamic Capabilities……………………………………….. 10
Sensing capabilities………………………………………………………… 11
Seizing opportunities………………………………………………………. 12
Re-configuring capabilities……………………………………………….. 13
FACTORS THAT HAVE SHAPED ZAMTEL‟S GROWTH……………………… 14
PEST ANALYSIS…………………………………………………………….. .. 14
ZAMTEL‟S COMPETITIVE POWER IN RELATION TO RIVALS……………. 16
BCG Matrix……………………………………………………………………. 16
GENERIC COMPETITIVE STRATEGIES …………………………………….. 18
Zamtel‟s generic strategies………………………………………………….. 18
Cost Leadership Strategy……………………………………………….. 18
Differentiation Strategy…………………………………………………… 18
Steve Job‟s Competitive Quadrants………………………………… 18
Focus Strategy…………………………………………………………… 18
CONCLUSION…………………………………………………………………….. 19
APPENDICES…………………………………………………………………….. 21
Appendix A: SWOT Analysis……………………………………………….. 21
Appendix B: VRIO Analysis………………………………………………… 21
Appendix C: Mendelows Stakeholder…………………………………….. 21
REFERENCES………………………………………………………………….. 22
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INTRODUCTION
Zamtel, whose official name is Zambia Telecommunications Company Limited, is a government-
owned telecommunication service provider in Zambia. It was established under the Companies
Act Chapter 388 of the Laws of Zambia. The Corporation falls under the jurisdiction of the
Ministry of Transport, Works, Supply and Communications pursuant to Gazette Notice No. 183 of
2012 and the Statutory Functions Act No. 4 of the Laws of Zambia.
The Zambian government sold off 75% of Zamtel shares to the Libyan company LAP Green
networks to keep Zamtel from shutting down after plans to recapitalize it failed. The shares were
sold for $394 million despite several attempts from citizens to block the sale on claims that the
company was still viable.However, this sale was reversed by the recent government under the
Patriotic Front (PF) following allegations that the company was fraudulently sold.
According to an Article entitled, „Zamtel in huge losses, firm is technically insolvent-Auditor
General,‟ since LAP Green networks‟ exit in 2012 the corporation has been making losses and is
technically insolvent. (Auditor General‟s report, 2014)
Today, the IMF has demanded the sale of Zamtel.
The international monetary fund is prepared to lend
Zambia a total of US$ 1.2 billion on condition that the
country sells the company. The IMF has made this
prerequisite because of the amount of money which
is being used to try to recapitalize the loss making
firm. (www.lusakatimes.com)
The Corporation has 36 regional outlets countrywide
(See Appendix B) as noted in the table below.
Regional Outlet (Province) Number
Lusaka 8
Central 3
Eastern 5
Copperbelt 10
Southern 4
Muchinga 2
Luapula 1
Northern 1
Western 1
North-Western 1
36
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BACKGROUND
Its inception is traced back to 1913 when the first telephone exchange was installed in
Livingstone. But, it was in 1994 when Zamtel got its name after an act of parliament was passed
to liberate the telecommunication industry. The liberalization of the telecommunication sector in
1994 led to the splitting of the Zambia Posts and Telecommunications Company into two
separate entities namely, the Zambia Telecommunication Company Limited (ZAMTEL) and The
Zambia Postal services Corporation (ZAMPOST)
Since inception in 1994, the corporation has raced through ups and downs. The corporation has
gone through phases and milestones including: Zamtel introduced analogue mobile telephone
service in 1995 with a cod 095. In 2003, Zamtel launched the mobile GSM service by late
President Levy Patrick Mwanawasa in Chipata, later in 2010 the 75% of the company were sold
to LapGreen, in 2011 Asymmetrical digital subscriber line (ADSL) Service was introduced on the
Zambian market offering fixed broad band internet service to the home and office and later in
2012, the sale of Zamtel‟s was reversed to 100% government ownership. (www.zamtel.com)
Zamtel earlier this year in May increased its ADSL internet prices which affected both the home
and business ADSL services. However, TechTrends (2016) claim that “the new ADSL product set
are better than the earlier ones because they are future focused with an emphasis of what the
customer can get out of the service”
The corporation has grown to be a pioneer of the telecommunications industry in Zambia by
providing a cost effective, comprehensive and high quality telecommunication facilities and
services to its customers. (www.ebizguides.com)
The corporation offers a number of products and services. These comprise: Landline, mobile,
internet & data, Zamtel LTE, and roaming services.
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FRAMEWORK
This strategy paper seeks to address the Case study of Zamtel in the following manner: To begin
with, a highlight analysis of the strategic challenges facing Zamtel in 2016/17 and appropriate
recommendations will be provided. For the identified opportunities available, emphasis on the
need to consistently sense, seize and take full advantage of. Secondly, the effects of key drivers
of change in the macro-economic environment in which Zamtel operates will be scrutinized and
the level of urgency the firm should implement when best addressing the effects identified using
the PEST analysis.
One of Zamtel‟s biggest challenge is its state of instability in the environment (see appendix A),
Bruce (2011 pp.20-29) alludes that if this trend such as this continues, strategic issues will
emerge more frequently that will challenge the manner that corporation formulates and
implements strategy. For this reason, this paper provides strategic models or solutions to best
help address these challenges and road-map the corporation‟s strategy in the long term.
Furthermore, the paper will stress on the overall status of key product (and service) lines using
the Boston Consultancy Group (BCG) Matrix to decide strategically where resources are to be
invested. This is anchored on special knowledge that strategy portrays the aspect of a desired
future state and the necessity of the organization to implement course of action now and
effectively manage its scarce resources to materialize its aims.
This paper also highlights Four (4) key criteria by which Zamtel‟s capabilities can be assessed
regarding providing a basis for achieving sustainable competitive advantage using the VRIO
Analysis (See Appendix B). In summing up, it tweaks all possible practical recommendations for
its long term strategy by engaging in MENDELOWS Stakeholder and SWOT analysis.
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DEFINING STRATEGY, EXPLORING ZAMTEL’S STRATEGIC STATEMENT.
In assessing strategy this paper supports Alfred Chandler‟s view who defines it as:
“The determination of the long run goals and objectives of an enterprise and the adoption of the
course of action and allocation of resources necessary for carrying out these goals.” (Johnson et
al 2014)
A strategy statement is a summary of an organization‟s strategy consisting of three main parts:
goals (reflecting mission, vision or objectives), the scope or domain of the organization‟s activities
and the firm‟s competitive advantages or capabilities (that is, how it achieves its objectives by
being different, superior and better than its competitors.)
GOALS
This is what the organization seeks to achieve. it consists of missions, visions and objectives.
Mission
An organization's mission is the overriding purpose of the organization. It such a huge „ask‟
of what kind of business the organization is into. A mission statement aligns managers to
be focused on what is central to their strategy in the sense that it relates to goals.
Zamtel's mission is to provide cost effective, relevant total communication solutions and
services that consistently offer unrivaled customer experience through the use of cutting
edge technology and customer focused marketing whilst maximizing shareholder value.
Vision
This as well relates to goals, and refers to the desired future state of the organization. It is
an aspiration which help rally the energy and passion of organizational members of staff.
Zamtel's vision is to be the leading communication services provider of choice.
Objectives
An objective is a specific result that an organization aims to achieve within a time frame
and with available resources. Objectives are specific and easier to measure than goals.
Objectives are basic tools that underlie all planing and strategic activities. They serve as
the basis for creating policy and evaluating performance. (www.businessdictionary.com)
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In Zamtel's article entitled „Zamtel launches all networks offer,‟ it‟s objective is to make
communication affordable for everyone.
SCOPE
An organization's scope or domain refers to three (3) dimensions : customers (or clients), the
geographical location of the organization and the extent of internal activities. Zamtel's scope is to
offer the all networks promotion to all zamtel subscribers and non subscribers who wish to join
the network countrywide. This is purposed to enable its customers to call any network, thereby
suiting everyone‟s pocket and non-subscribers wishing to join the Zamtel community.
Therefore, a summary of Zamtel‟s strategy reflects:
“To be the leading communication service provider and make communication
affordable to citizens across the country by providing cost-effective relevant total
communications solutions and services through using cutting edge technology and
customer focused marketing.”
STRATEGIC CHALLENGES AND OPPORTUNITIES FACING ZAMTEL TODAY
ZAMTEL IN HUGE LOSSES, FIRM IS TECHNICALLY INSOLVENT
The term “strategic challenges” refers to those pressures that exert a decisive influence on the
organization‟s likelihood of future. (http://www.baldrige21.com). Strategic challenges are
externally driven. However it is imperative to note that in responding to external strategic
challenges, a corporation may face internal strategic challenges.
The corporation has encountered numerous strategic challenges, both internal and external.
Zamtel has struggled ever since 2011 when the Libyan investor Lap Green was forced to exit the
firm, and is currently still in a dilemma. Internal strategic challenges relate an organization‟s
capabilities or its human or other resources.
Issue
Since 2012, the corporation has been making losses and is technically insolvent, according to the
2014 Auditor General‟s report. This is due to the escalating drop in revenues since its
repossession in 2012 from K573,120,000 (old kwacha) to K390,381,000 (old kwacha) in 2012.
Zamtel has also suffered a decline in the shareholder‟s funds from K624,258,000 (old kwacha) to
K385,980,000 (old kwacha) in 2011 and 2012, respectively.
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More to this, the company‟s financial statement showed a current ratio of 0.62:1 contrary to the
recommended 1:1 ratio, negative working capital, lack of continuity plan in 2014, and a review on
Zamtel‟s assets register revealed that the corporation had one hundred and fifty (159) properties
without title deeds contrary to the Lands Act No.29 of 1995 of the Laws of Zambia (see Appendix
C). In 2016, the huge losses challenge still haunts the corporation.
Meanwhile, one of most external strategic challenges facing Zamtel today is, the risk of being
sold again. Today, the IMF has demanded the sale of Zamtel. The international monetary fund is
prepared to lend Zambia a total of US$ 1.2 billion on condition that the country sells the
company. The IMF has made this prerequisite because of the amount of money which is being
used to try to recapitalize the loss making firm.
In the recent, the government has transferred management and operations of the corporation to
the Industrial Development Corporation (IDC) after its failure to secure a $300 million USD
investment in the company to make it viable and be able to compete with MTN Zambia and Airtel
Zambia.
However, its efforts to revive the corporation has proved futile. It is against this backdrop that the
International Monetary Fund (IMF) is prepared to lend the Zambian government a US $1.2 billion
economic bailout on condition the country sells ZAMTEL. (Lusaka Times Newspaper: IMF
Demands sale of ZAMTEL, October 28, 2016.)
This elucidates Zamtel‟s inability to adapt to the ever changing environment and the intense
competition in this market. In this most lucrative markets, every industry player must keenly
participate in birthing, nurturing and maturing its survival skills. This is so because, competing
and potential rival companies are launched with various forms of advertising, promotion and
intense price wars as they jockey and tactically battle each other aimed for buyer patronage. The
corporation has not been sensing and seizing opportunities and possible threats in the
environment to a greater extent. For this, it continues to be the country‟s smallest operator with
less than two (2) million customers. (www.ukzambians.co.uk)
Recommendations
In this modern age of extreme competition in which combined pressures of global completion,
technology, interconnectivity and economic liberalization make life for organization tougher than
ever before (Huyett and Viguene 2005). The task of every manager is to realize the goals of the
organization achieving outstanding performance in the unit they are responsible for.
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According to Waal (2007), there is emphasis on responsibility managers to, “Adapt faster and
faster to growing demands for flexibility and speed and to compete simultaneously on the basis of
development cycle time, price, quality, flexibility, fast and reliable delivery and after sales
support.”
Zamtel must implement a strategy renewal program. This requires the corporation moving from a
narrow focus on operations and structure to a comprehensive view of alignment. However, when
competition increases, many firms change their structures to concentrate on a few profitable
activities, thereby inadvertently compromising their intended strategy (Dale E, 2009 pp. 3).
Currently, the privatization of zamtel is recommended. This will undoubtedly imbue the company
to evolve from the loss making firm that it is today (as evidenced from the 2014 internal Auditor‟s
report) to profit making corporation. Lest, its competition with likes of the foreign private owned
competitors: Airtel, MTN, and Vodafone Zambia is likely to continue to be a „hard-to-win battle.‟
HIGH OPERATING COSTS
One of the constraints facing the corporation currently is, high operating costs. Goldratt, (1990,
pp.56-57) alludes that a constraint is anything that limits a system (corporation or agency) in
reaching its goal. For the company to survive into the foreseeable future, it is clear that a
reduction on expenditure is necessary. Zamtel‟s almost 89% of its operating costs is attributable
to staff costs. Consequently, this is negatively affecting the corporation‟s profits.
Recommendation
The corporation‟s management can consider downsizing labour by laying off overload labour.
Except, it is important that Zamtel ensures that implementations of downsizing management must
be beneficial to business competitive advantage and performance (Cheng-Fei 2008 pp.376-384).
This entails that it must not affect the efficiency and effectiveness of the corporation and its ability
to achieve sustainable competitive advantage (See Appendix B).
Furthermore, It may also consider low cost contracts, that is, recruiting of labour on „a-need-arise‟
basis as this will cut on idle labour costs. More to this, Zamtel might as well implement job
rotation. This strategy allows two(2) or more employee to split the traditional specific number of
hours in a week. For instance, employee can work from 7 am to 1pm and another from 1pm to
6pm implementing a hourly rate.
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Greenhallgh et al (1988) pin points other forms of downsizing that can reduce expenditure. These
comprise: demotion of supervisory staff, reduction of promotional activities, salary freeze,
curtailed working hours, no paid leave, and early retirement with preference packages.
CAPABILITIES AND ADVANTAGES
Nicholas et al, (2004) asserts that organization capabilities refers to an organization‟s ability to
perform a coordinated task, utilizing organizational resources for the purpose of achieving a
particular end results. Zamtel‟s has pledged continuous improvement to give its customers the
best communication tools and ensure that they have access to high quality, affordable and
competitive products and services through the uses of technology innovation.
Zamtel‟s strategic statement is to be the leading communication service provider and make
communication affordable to citizens across the country by providing cost-effective relevant total
communications solutions and services through using cutting edge technology and customer
focused marketing.
The corporation has added advantage of having a physical presence in about 36 regional outlets
countrywide (See Appendix B). The fact that Zamtel has at least an outlet in every province
remains a ubiquity icon of telecommunication provider to its customers across the country. More
to this is, it is through its variety of products and services offering that the corporation has thrived
to develop its capabilities since its inception.
ZAMTEL’S GENERIC DYNAMIC CAPABILITIES
Over time, each organization needs to balance environmental conditions, its strategy to seize
opportunities and counter threats in the environment, and its capabilities to implement such
strategies. If strategies are not in line with conditions of the environment, strategic gaps impede
the ability to achieve organizational objectives. (Bruce E., 2011).
Dynamic capabilities are the means by which an organization has the ability to renew and
recreate its strategic capabilities to meet the needs of the changing environment (Johnson et al,
2014). These capabilities are distinct and suitable to operate efficiently now except may require
transformation to sustain superior performance in the future.
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1. Sensing Capabilities:
Demands that organizations are constantly scanning and exploring the new
opportunities across markets and technology.
Recently, ZAMTEL has launched 4.5G LTE-2300 network on the Copperbelt Province in
its quest to improve communication services, pushing forward its technology vision by
deploying state of art, cutting edge 4.5G long term evolution communication (Techtrends,
2016). This is was after a conclusive research conducted by the corporation.
According to an article, “Zamtel launches 4.5G on the Copperbelt,” the successful
implementation of this project by the company signifies the transformation efforts of
the ICT industry on the Copperbelt and re-defines internet services that allows the
Zamtel to offer innovative high-definition data-hungry services to its subscribers
(www.zamtel.com/news).
Zamtel understand well the enabling role that partnering plays in Strategy. Because of
this, it is evident that the company is not working in isolation as it continues to sense
and scan for new innovation opportunities. This is evident in a statement:
Tian Rui, Huawei Technologies Zambia Ltd country
Director said that the company was excited about the
official launch of 4.5G LTE-2300 which establishes the
world’s most advanced LTE network.
She further added that Huawei, together with the
Government Republic of Zambia and Zamtel plan to roll
out a world class network throughout the country
ensuring that the customers get access to high quality
internet services and affordable prices. (Techtrends,
2016)
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2. Seizing Opportunities:
2.1 Zamtel‟s All network offer promotion
Zamtel is addressing new opportunities through new customer services,
processes and activities. One of the major challenges that subscribers countrywide
are facing is the high rate of communicating from one network to another.
The corporation has since launched „All networks offer‟ that seeks to address the
challenges of the high cost of communication in the country especially across the
networks. Zamtel‟s pursuit to come up with this promotion aims at suiting every
person‟s pocket has being a „PLUS‟ on the company‟s market now.
Despite its competitors also offering similar promotions such as: Airtel‟s
Soche‟s “as well all networks pack” and MTN‟s Spaka pack, yet Zamtel‟s “All
networks offer” is the most affordable of the three options. (See the all-net-rates
below)
COMMENTS:
Daily bundles: Zamtel has the least priced daily bundle of K1, and beats Airtel‟s K2
package. The Zamtel‟s K5 regarding data bundle is the best option as it gives 50MB,
which one would pay K10 for on MTN and K15, beating Airtel which gives 30MB on its
K15 daily pack. Conclusion. Zamtel wins
Weekly bundles: Zamtel has least priced at K5.
Monthly bundles: Zamtel again has the least pricing for much out their bundled
packages and win across the board.
Source: Techtrends.com , 2016.
TABLE 1.0
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2.2 The CLIQUE
ZAMTEL has continued to
search and seize new activities
to excite and happy its
customers. Apart from the
„Keep fit sporting campaigns‟,
the company has in the
recent launched yet another
exciting Brand Campaign
whose aim has been to
engage and have an
emotional attachment with
customer.
According to Zamtel‟s Article entitled the “CLIQUE”, the new thematic campaign
is called “CLIQUE” which stands for a circle of friends, a group, a club, a society
of like-minded individuals with shared interest. It seeks to engage universities
and colleges and bringing them on board the “Zamtel Clique”
This innovative idea pursues to trap students through its warm invitations of any
student from UNZA, Copperbelt University, Evelyn Hone, NIPA or any other
university or college has somewhat skyrocketed its competitive advantage over
Vodafone Zambia ltd…not to mention that university and college students are its
top priority.
3. Re-configuring Capabilities:
New products and services and processes may
require renewal and re-configuration of
capabilities and investment in new technologies
(Johnson et al 2014)
Zamtel has continuously searched for practical means its subscribers canaccess
their landline and mobile accounts more easily, safe and efficiently. The
corporation has since launched its latest innovation-the web-based Zamtel
Selfcare portal (somewhat a transformation of its medieval system). This
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innovation enables its customers to access landline and mobile accounts from
the convenience their offices or homes at www.selfcare.zamtel.co.zm.
FACTORS THAT HAVE SHAPED ZAMTEL’S GROWTH
The environment is what gives organizations their means of survival. It creates opportunities and
also, it presents threats (Johnson, G. 2014, pp.34). In order to understand the strategic position
of an organization, there are a number of factors that have to be taken into account at the outset
of strategy development. For instance, Interorganizational strategies are pursued to mitigate the
adverse impact of external forces and thus enhance the efficacy of an organization‟s strategies
(Ford et al., 2003). At government policy level, politics and economics are inextricably linked.
Corporate strategy is not concerned with forming such policies but does need to understand the
implications the decisions taken (Lynch, 2003). These factors matter a lot when it comes to the
success of an organization.
For this, organizations should focus on those environmental opportunities. Since strategists (most
often managers) usually focus on the internal dimensions of the organization, policy change and
the volatility nature of politics in countries undergoing major policy changes, it calls for conscious
exploration of the environment outside the organization.
The factors like the political, economical, social, ecological, legal and technological changes will
influence the direction and shape of an organization‟s policies and objectives. It is with much
emphasis that such factors must be investigated in order to know the exact factors that shape an
organization‟s growth. It is vital that managers analyze their environments carefully in order to
anticipate and influence environmental change. Strategy development should be primarily about
seeking attractive opportunities in the environment in which an organization operates.
Moreover, the Zambian Government has from time to time imposed monopolistic powers ahead
of intensive competition in the market.
PEST ANALYSIS
Johan Hough et al (2011) asserts that analyzing the external environment consists of seven (7)
dimensions that focus on the company‟s industry and competitive environment within a larger
macro-environment with influences such as the economy, regulations and legislation, technology
and social cultural values and lifestyles.
Below this is a model used on Zamtel to identify the forces driving change in the industry and the
impact they dictate on the competitive intensity and ascertaining industry profitability.
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FACTOR TREND EVALUATION RANK IN TERMS
S=Strength OF IMPORTANCE
W=Weakness 1=High
O=Opportunity 5=Low
T=Threat
Political Government Funding S/O 1
Government Interference T 3
Regulatory framework (e.g. Laws) T 1
Corporate Governance issue T 2
Economic High Operating Costs T 1
Increasing Labour Cost T 1
Outstanding Debt W/T 1
Social Modern Lifestyle T/O 3
Court Cases T 1
Technological Technological innovations T/O 1
Medieval systems W 2
Research and Development T/O 1
It is evident from the illustration that the corporation is working in adverse environmental
conditions with a myriad of threats and a few opportunities. Strategy may involve interdependent
relationships among multiple stakeholders (see appendix C), it targets identifiable entities in order
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to employ scare resources both efficiently and effectively in pursuit of business objectives (Fuller
2010)
ZAMTEL’S COMPETITIVE POWER IN RELATION TO ITS RIVALS
BCG MATRIX
Currently with the huge losses and imminent decline in revenues since its inception, the
corporation is battling significant challenges that threatens its existence as the going concern. An
analysis of the business portfolio is provided below by means of the Boston Consultancy Group
Matrix aimed at profitably investing or allocating the available resources into recapitalizing
Zamtel.
There is absolutely importance in maintaining a balance within the portfolio, that is, there is
evidence if some low growth businesses that are making sufficient surplus to fund investment
needs of higher growth businesses (Johnson et al 2014 p244).
Figure 1.0
New Innovation
As the telecommunication industry is springing up as a result of globalization and advancement in
technology (see Appendix A), today‟s customers are not only hungry for voice but also high-
speed data services. Zamtel‟s efforts to launch 4.5G LTE-2300 network on the Copperbelt in its
quest to offer innovative and data-hungry services to its customers. However, currently vodafone
New Innovations
(4.5 G Launch) All Networks Offer
Examination
Council of Zambia results checking
Zamtel Prepaid
Mobile Money
services Mobile Internet
services
International
Roaming Services
Land-line services ZICT College
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has a greater market share and undoubtedly better internet speed. Therefore, Zamtel should take
advantage of its lowest prices to take a bite of a larger market share.
Prepaid Services
Porter M. (1985) reminds strategists that competitive strategy is about being different. It is a
means of deliberately choosing a different set of activities to deliver a unique mix of value.
(Johnson et al 2014 pp4). Already, Zamtel is the smallest Mobile network operator. Upgrading of
its medieval prepaid system to the latest one it is calling the „Selfcare service‟ will help capture
and grow the market share. This will undoubtedly enable the corporation compete with Vodafone
Zambia have released their My Vodafone app on Google play and App-store up for free
downloads. All recharges for data, top-ups, etc. are transacted through this magical app.
Mobile Money Services
There has been immeasurable growth in this particular niche. In spite of this, the corresponding
increase in the number of players is evaporating the profits away. Not forgetting to mention that
Zamtel has the added advantage of having physical presence or outlets in all parts of the country.
The corporation can use this competitive capability to gain courage and launch the Mobile Money
services to „happy‟ its long awaited customers. From the BCG Matrix, it is evident that Zamtel
already has the market share but it lacks is market growth.
International Roaming services
Customers pride Zamtel‟s lowest voice rates when it comes to international roaming. This allows
users to stay connected wherever they are in the world at a competitively low price compared to
other network operators. The corporation has a larger market portion, but its market growth is still
minimal. Zamtel should use competitive strategy to become a market leader in the International
roaming services.
Land-line services
The market is yielding a growing number of customers. Zamtel‟s ever evolving capability lies in
the fact that it has been the sole fixed-line service provider with approximately 80,000 lines
country-wide. Currently, the corporation is the market leader in this lucrative niche. Therefore, it is
important to pride customers‟ trust by consistently delivering excellent land-line services. Zamtel
should consider tasking its strategist to work on competitive strategies that will see the
corporation being at the top now in the future time.
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GENERIC COMPETITIVE STRATEGIES
The term „generic strategy‟ mean basic types of competitive strategy that hold across many kinds
of business situations (Porter E., 1985). He further argues that it is best to choose which generic
strategy to adopt and then stick rigorously to it.
There are three (3) generic strategies options available to strategists of a firm: Cost leadership;
Differentiation; and Focus strategy.
ZAMTEL’S GENERIC STRATEGIES
(i.) Cost Leadership Strategy:
The corporation seeks to become the lowest-cost organization in its pursuit to making
communication affordable to everyone. In its recent launch of the „All networks offer,‟ it
object is to provide communication services that will suit every every pocket.
And how is Zamtel competing with its competitors? Despite its competitors also
offering similar promotions such as: Airtel‟s Soche‟s “All networks pack” and MTN‟s
Spaka pack, Zamtel‟s “All networks offer” is the most affordable of the three options.
(See Table 1.0)
(ii.) Differentiation Strategy: Entails uniqueness along some dimensions that is sufficiently
valued by customers to allow a price premium (Will M., 2008). ZAMTEl‟s differentiation
strategy is evident in its efforts to not only differentiate but also diversify, the corporation
has 100% ownership of the Zambia ICT college, uniquely launched 4.5G LTE-2300 and
continues to offer excellent fixed landline services. (See figure 2.0 below)
(iii.) A Focus Strategy
Targets a narrow segment or domain of
activity and tailor its products or services to
the needs of that specific segment to the
exclusion of others. Zamtel‟s ultimate
capability lies in its fixed Landline
services in homes and businesses across
the country. So far, it has proved itself a
market leader in this niche. To say it
bluntly, Zamtel‟s strategy towards
landline services is termed “Strategic lock-
in”, because customers of this service
have wholly become dependent on it
beating its competitors-Airtel and MTN.
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CONCLUSION
To sum up the results from the above models it is evident that Zamtel can take re-position of
itself with the use of its capabilities as its scope in terms of various regional outlets (See
appendix A and B) and the other business units in its portfolio to continue to have sustainable
growth in the long term.
In addition to recommendations provided for the current challenging facing the corporation,
having a thorough understanding of the organization and the industry and the environment
within which it exists the corporation should also consider the following recommendations as
a way of best succeeding and gaining sustainable advantage in the long term.
I. Use of the Lower-cost leadership strategy, which has proved to be most successful
and sustainable for Zamtel. The corporation should strive to be best the sole provider
of landline services “locking-in” its customers and consistently come up with
competitive promotions like „All networks offer‟ aimed at delivering the most
affordable services beating its rivals.
II. Offensive strategies: Zamtel could opt to implement offensive strategies as opposed to
defensive. This is because the company has little to defend apart from being the
sole providers of landline services. Zamtel can launch flanking attacks on its
competitors. A flanking attack is an offensive marketing strategy used to exploit
an opponent‟s weakness. For instance, the launching of 4.5G LTE-2300 is an
attack on Vodafone and Airtel‟s 4G services. Except, Zamtel must continue to
better it and must have the lowest price tag for it.
III. Zamtel must rigorously understand its competitors‟ strategies. This will help the
corporation to adopt and stick to a single strategy aimed at avoiding being “Stuck in the
middle” doing no strategy well. It is evident that Vodafone-the mobile data giant-is a
focused strategy oriented.
So far, Vodafone‟s top priority customers are the students and working class
individuals. Zamtel can implement the use of initiatives such as the “CLIQUE” and
“Keep fit Campaigns” to trap students as well to subscribing them to the network.
IV. Deliver cost-efficient propositions which are inimitable. Zambia like other 3rd world
countries is an emerging market with relatively low quality service providers. However,
the future belongs to those who will raise the bar to benefit the country. Customer
satisfaction are means to an end and not the end itself (Muhammad 2007)
V. Harness and invest in technology; the firm should consider a strategic alliance which
reputable IT firms, for instance its partnering with Huawei in launching 4.5G LTE.
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APPENDICES
Appendix A: SWOT Analysis
STRENGTHS
Presence in all the provinces and major
districts.
Legacy of being the sole fixed land-line
service provider.
Government funded
High Growth rate and Domestic market
Cost advantage: All networks offer
WEAKNESSES
High operating costs
Large unskilled Labour force
Huge debts in loans and unpaid benefits
Little attention prioritized to Research and
Development (R&D).
OPPORTUNITIES
Growing demand
Technological Changes: Arrival of new
Technologies (e.g. 4G, 4.5G LTE, Fibre)
Unfulfilled customer need: Mobile Money,
high-speed internet
THREATS
Emergency of substitute products and
services (Data bundles preferences):
Vodafone (Z) to Zamtel
Court Cases and Bad public image: 159
Zamtel property held without title deeds.
Entry of new competitors (e.g Vodafone
Zambia)
Appendix B: VRIO Analysis
Value Rarity Inimitable Org.Support Competitive Implication
Location Presence Yes No Yes Yes Temporary Competitive
advantage
Complementary
services
Yes No No Yes Competitive Parity
Internal Operations Yes No No Yes Competitive Parity
Partnerships Yes No Yes Yes Temporary Competitive
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advantage
Innovation Yes No No Yes Competitive Parity
From this analysis it is evident that the company‟s capabilities are not dynamic for sustained
competitive advantage.
Appendix C: Mendelows Stakeholder Analysis
MENDELOWS STAKEHOLDER ANALYSIS
LEVEL OF POWER
LEVEL O
F INT
EREST
KEEP INFORMED
•Customers: Consumers of services may duck out of buying services from a company that is associated with scandals.
•Employees: Currently, the company is technically insolvent. Staff are uncertain as to whether they may be laid off. This may affect productivity and skilled Labour may opt to switch to other jobs with more job security.
MANAGE CLOSELY •Government: It posses enormous power
and control and because of this, it should considerable of all major decisions such as reversal (e.g. the decision to lay off staff)
•Legal Authorities: Zamtel is no exception, it must comply with rules and regulations or face legal consequences. (e.g. Lands Act No.29 of 1995, NAPSA)
•Labour Unions: These have the power to withdraw labour which could halt productivity in the event they deem fit that policies are not favourable for workers.
MONITOR •Competitors: These have had huge bearing
on the decline in revenues and could dry the corporation out of business if not properly monitored.
•Business Partners: These have been
engaged in to provide a diversified portfolio in new innovations. Future opportunities need to be explored. (E.g. with Huawei in 4.5G Launch )
•General Public: Company‟s image and how it is perceived. Currently, Zamtel is the smallest Mobile Network Operator (MNO) and technically insolvent.
KEEP SATISFIED
•Banks and Lenders: These will only aid funding if an organization meets certain criteria.
•Board: Good corporate governance
support promotes competitive strategies. The CEO should not be Chairman of the same company (Corporate Governance UK Code). This board is to be diversified and picked from other institutions by law and not necessarily due to a particular set of skills
Page 22 of 22
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