Strategic Management

Business Report on

Mobilink

Yamna ArshadSyeda Marium Mahmood

Farah Sultan KhanSyed Fahad Ali Waqas Khalid

Syed Abbas Haider Abidi

Business Scope

Business in the minds of customers:

A network provider which provides network coverage and complete voice and data solution at economical rates with high level of customer service.

Regions:• Cellular companies provide the wide network coverage in

cities, towns, and villages across Pakistan.• The regions include: North, Central, and South.

FUNCTIONS AND APPLICATIONS:

• Masses (Rural, Entrepreneur, House wife, Senior citizens, Employees)

• Youth• Corporate

Cellular companies provide wire-less communication that owns or controls all the elements necessary to sell and deliver services to an end user including

• Wireless network infrastructure• Customer care• Billing • SMS & MMS – Multimedia Message Service• GPRs – General Packet Radio Services

Customers and Users:

• The major customer segments are Masses, Youth, and corporate sector.• Masses segment is divided into Masses (Rural,

Entrepreneur, House wife, Senior citizens, Employees) .• Due to strong brand, extensive coverage network and

attractive packages companies successfully satisfying its customer needs and trying to capture more customers.

Market Structure

Market Size and GrowthREVENUE

Past 4 years

2011 2012 2013 2014

Rs. In millions Growth

Masses

Rural 34,159 46,269 55,568 56,221 65%

Entrepreneur 44,669 53,732 58,836 61,492 38%

Senior citizens 18,393 20,896 22,881 22,840 24%

Employees 49,925 50,747 52,299 56,221 13%

house wife 23,648 26,866 27,784 28,111 19%

Youth Youth 52,552 64,180 70,277 80,818 54%

Corporate Corporate 39,414 35,821 39,224 45,680 16%

Total Revenue 262,761 298,510 326,868 351,384 34%

Growth over last year 11.3% 13.6% 9.5% 7.5%

The overall cellular market saw growth of 34% in 4 year period from 2011to 2014. The main reasons for discussed increase are: 

• Highest Contributor - the rural sector has increased its use of cellular services in the recent past, hence 65% growth has been noticed. The major reason for this growth is availability of cellular network in remote areas.

• Next major contributor is youth with total increase of 54% because more and more reliance is being placed on technological devices and the increasing interest of youth to socialize.

CHANGE/EFFECT:

CHANGE/EFFECT:

• Entrepreneur, with 38% increase is another major participant in growth. In Pakistan, number of entrepreneurs has risen significantly due to easy financing schemes initiated by the Banking sector.

• The reason for 24% growth in senior citizens is awareness and better exposure to changing life trends.

• Corporate and Employee segment shows 16% and 13% growth respectively, as focus has somewhat shifted to internet services.

REVENUE

Future 4 years

2015 2016 2017 2018

Rs. In millions Growth

Masses

Rural 62,095 65,211 74,137 83,129 34%

Enterprenuer 65,858 69,286 69,776 73,892 12%

Senior citizens 26,343 30,568 30,527 27,710 5%

Employees 62,095 71,324 78,497 83,129 34%

house wife 26,343 28,530 26,166 25,400 -4%

Youth Youth 82,793 93,740 104,663 117,766 42%

Corporate Corporate 50,805 48,908 52,332 50,801 0%

Total Revenue 376,332 407,567 436,097 461,827

Growth over last year 7.10% 8.30% 7.00% 5.90%

Market Size and Growth

CHANGE/EFFECT:• Youth segment is expected to show 42% growth due to rapid

increase in population as well as increasing trend of socialization.

• Rural sector is expected to experience 34% rise due to increasing accessibility and awareness.

• Employee is anticipated to increase by 34%, whereas Housewife segment is expecting decrease of 4% as more and more women are shifting their status from Housewife to employed persons.

CHANGE/EFFECT:• 5% increase in Senior Citizens is anticipated.

• High saturation in corporate sector means any growth is unlikely.

Competition/ Segments

RuralEntrepreneur

House wife

Employees

Senior Citizens

Telenor 6 12 10 18 10 27 17 100Ufone 7 11 9 25 14 21 13 100Zong 8 17 4 22 24 25 0 100Warid 7 9 18 17 14 17 18 100Mobilink 15 18 8 17 8 15 19 100

Competition MassesYouth Corporate Overall

CHANGE/EFFECT:

• Telenor holds maximum share in Youth segment which is 27%, whereas it has very small share in Rural segment, 6%.

• Ufone earns major portion of its revenue from employee segment and holds 25% of share in this segment.

• Zong is very famous among Youth due to its attractive packages and lowest rates therefore holds maximum share in this segment i.e. 25%.

• Warid holds maximum share in corporate and house wife segments.

CHANGE/EFFECT:• Mobilink holds 19% share in corporate segment hence it is the

market leader in this segment.

• Mobilink is also performing well in Rural segment by its extensive network coverage.

• Rural segment still has Potential for growth so companies should focus on this segment in order to increase their profitability.

• Youth is the most competitive segment therefore must be catered with differentiation strategies.

Distribution Channels% OF RS MIL

Rural Area Entrepreneur House Wife Senior Citizens Employee Youth Corporate

2011 2014 2011 2014 2011 2014 2011 2014 2011 2014 2011 2014 2011 2014INDIRECT SALES

Franchise:

20 33 70 65 13 17 20 40 6 11 25 29

Retailer

80 67 10 12 70 60 40 40 69 73 41 50

Wholesale (MM)

40 10 6 25 14

%DIRECT

BDO’s (KAM's)

8 8 6 8 67 71

Customer Care Centre

12 15 17 23 10 13 8 9 7 33 29

100 100 100 100 100 100 100 100 100 100 100 100 100 100

CHANGE/EFFECT:• In Rural segment a shift was seen in distribution channels. In

2012 Rural segments deals 20% from franchise and now it deals 33% percent from franchises. Whereas, contribution of retail in this segment decreased by 13% from 2011-2014.

• There is a decreasing trend in the usage of franchises from 2011-2014. In 2011 entrepreneur used franchises 70% where as in 2014 it changed to 65%.

• House wife segment started giving preferences to customer care center and franchises. In 2011 their preference was retailer and 70% preferred retailers now along with retailers they also visit franchises and customer care center.

CHANGE/EFFECT:• Share of senior citizen segment was shifted from wholesaler to

franchises and retailer.

• Employee segment take services from all distribution channels except BDO’s.

• In youth focus shifted from wholesaler to retailer. In 2011 25% Youth visits wholesalers to take any service or for any query but now only 14% take services from wholesalers.

CHANGE/EFFECT:• There is no significant change in corporate sector. This sector

still preferred BDO’s and customer care centers.

• Due to increase in number of franchises and retailers people are less focusing on wholesalers.

• There is no significant difference in the price of wholesaler and retailer therefore people go for retailers.

DRIVING FORCESCustomer:

The first driving force that compels the most of this industry is “Customer”. Customers are the sole source of revenue and their needs dictate features of products and services. A happy and satisfied customer can increase in company’s customer base.

Government Regulation:• Regulations from the local government body primarily act as a

2nd biggest powerful driving force for telecom industry. For example during eid days Government used to suspend the cellular services on account of security concerns without considering the impact of its action on the telecom industry because these are highest revenue generating days and to solve this issue all companies should unite and have dialogue with government.

Driving Forces:• Technology

In 21st century, technology acts as an imperative part of any industry. In cellular industry, due to swift changes in communication ways (voice & data ), technology boost the efficiency both.

SWOT ANALYSIS

STRENGTHS WEAKNESSES Largest market share. Covering over 10,000 cities, towns

and villages across the Pakistan.

Most expensive telecom company both in call rates and SMS.

Late mover in bringing new services. Ignorance towards employees’ issues.

OPPORTUNITIES THREATS

Rural market is growing at a rapid level.

Demand of internet services is increasing.

Current price war may reach at a position where only brand names survive.

New Government policies.

CHANGE/EFFECT:• The telecommunication industry has experience a rapid and

significant technological development that has improved services.

• The internet packages of Mobilink are not very attractive so the company should design new and affordable internet packages to attract customers from other network.

• Due to current price war market size is decreasing so Mobilink should pay attention to retain its existing customer base and increase more customers.

• Companies are frequently improving data transmission speed and quality in order attract more and more customers.

 

Buying Criteria Relative Importance of Factors

FACTORS ABSOLUTELYCRITICAL

VERY IMPORTANT

QUITEIMPORTANT

NICE TO HAVE

NOT SIGNIFICANT

DON’T WANT IT

VOICE QUALITY            

INTERNATIONALROAMING

           

EASE OF AVAILABILITY

           

BRAND IMAGE            

CUSTOMER CARE SERVICE

           

INTERNET SERVICE

           

Rating Against Customer Buying Criteria:

QUALITY & PRICE Mobilink Telenor Ufone Zong

Non-price attributes affecting customer choice

Weight%

Service-Related

VOICE QUALITY 20% 8 1.60

7 1.4 7.5 1.5 6 1.2

INTERNATIONAL ROAMING 10% 5 0.50

6 0.6 5.5 0.55 4 0.4

EASE OF AVAILABILITY 10% 8 0.80

7 0.7 7 0.7 5 0.5

BRAND IMAGE 20% 8 1.60

7 1.4 7 1.4 5 1

CUSTOMER CARE SERVICE 20% 8 1.60

8 1.6 8 1.6 6 1.2

INTERNET SERVICE 20% 7 1.40

8 1.6 7.5 1.5 7 1.4

Total 100% 7.50

7.30

7.25

5.70

CUSTOMER BUYING CRITERIA: PRICE…% QUALITY ATTRIBUTE %

CHANGE/EFFECT:

• Mobilink has been known for its good service. It has packages that suits the needs of most customer segments.

• The availability of service, voice quality and brand image is exceptional and should be maintained in future for customer retention.

• The overall image of customer care service is good but needs further improvement related to delay in problem solving.

• The internet service is very important to customers therefore it should be improved fast because it seems that in near future the demand will rise.

CHANGE/EFFECT:• Increasing interest of customers in smart communication

application via internet is the main cause of reduction in the need of traditional call and SMS.It is essential for Mobilink to provide innovative internet data services to its customers.

Cost Analysis

Strategic Cost• Training and development cost• Growth and expansion cost

Operational Cost• Admin cost• Distribution cost• Advertising and marketing cost• Equipment/technological cost• Repair and maintenance cost• Personnel Cost

Cost Analysis (Cont.)STRATEGIC COST

Mobilink Telenor Ufone Zong

Training and Development

17% 15% 16% 15%

Growth and expansion

20% 17% 18% 17%

Cost Analysis (Cont.)OPERATING COST

Mobilink Telenor Ufone Zong

Admin Cost 13% 14% 13% 16%

Distribution Cost 8% 9% 7% 9%

Advertising & Marketing cost

15% 22% 23% 21%

Equipment & Networking cost

11% 9% 9% 8%

Repair & Maintenance

9% 8% 7% 8%

Personnel Cost 7% 6% 7% 6%

GAP ANALYSIS:

• No significant gap exists in Training and Development as all companies are almost dedicating the same percentage of their investment.

• Mobilink is focusing the most on Growth and Expansion and reaping its benefits by provision of best network coverage.

• According to analysis, Mobilink is doing well to curtail its admin cost as it has the lowest cost among its competitors.

• All the major players are almost on same level of Distribution Cost as in service sectors, distribution is often the less important area. The main focus is on service improvement.

GAP ANALYSIS:

• Mobilink needs to invest more in Advertising & Marketing to compete with rivals and to better promote its new products and services.

• The main reason of superior network quality is significant investment in Equipment & Networking.

• When a company invests good amount of money on Equipment and Networking, then it also invest on Repair and Maintenance. Therefore, Mobilink invests more in comparison with its competitors.

• No gap exists in Personnel Cost as all companies are investing similarly.

Strategic Intent

To increase ARPU (average revenue per user) not by lowering call and SMS rates but by providing innovative data solutions such as improving internet speed and lowering price of internet packages.

MobilinkVision• To be the leading Telecommunication Services Provider in

Pakistan by offering innovative Communication solutions that make each day better for our customers while exceeding Shareholder value & Employee Expectations.

Mission• To be a superior communication service company in Pakistan

by creating quality conscious and cost effective environment.

OBJECTIVES/ACTION PLANWhat Reasons When How Result

1. To create more customer base in Rural Segment.

Expects growth of 34%.

Already holds highest share.

Start Now By introducing effective call and sms packages.

Penetrate market through advertisement.

Increase in market share.

2. Attract youth segment. Attractive in coming years.

Start now By introducing packages that fully satisfy Youth needs.

Do more competitor analysis.

Popularity increase in Youth.

3. Improve data services. Shift in customer preference towards data services.

Data service is a new cash cow for telecom industry.

Immediate Introduce 3G services in other cities as well.

Satisfying customers’ emerging needs.

4. Improve customer care services.

Customers are not fully satisfied with their customer care services.

Immediate Pay close attention to customer queries and improve services accordingly.

Customer retention.

OBJECTIVES/ACTION PLAN:5. Respond to price war. Decrease in share. Now Strengthen customer

perception of best network.Minimize effect of portable price war.

6. Increase advertising and marketing

Increase customer awareness about new products.

 

 

Immediate Develop creative advertisements.

Increase BTL activities.

Brand awareness and retention.

7. Target employees Lucrative segment anticipated to grow by 34%.

Start now Develop applications to facilitate them in their work.

Success in achieving share of employee segment

8. Improve HR department Lack of employees’ motivation

Immediate Take corrective action to improve HR department

Satisfied Employees

Key Issues:

• Customer retention.• Price Wars - Current price war among cellular service

providers may reach at a position where only brand names survive.• Irresponsive Human Resource Department.• Dissatisfactory customer service.• Weak promotional activities.

THANK YOU!!