PepsiCo - 2009

Jordan Telecom Group 2010Case Notes Prepared by: Dr. Victor Sohmen

Case Author: Hala A. Sabri A. Case Abstract

Jordan Telecom Group (JTG) (www.orange.jo) is one of the major telecom firms in Jordan and is a public mobile telephone network operator: Orange is the operator of the mobile communications license granted to JTG. The company combines local Jordanian capability with the technological advantages and network management/operation experience of one of the worlds leading telecommunication operators, France Telecom Group (FTG). JTGs fixed, mobile, and Internet services constitute the real base for the Kingdoms telecommunications renaissance and leadership in the Arab world, and contribute to its integration with the region and the world. It is the second largest operator in Jordan in terms of number of customers. In 2007, the group adopted the Orange brand the commercial brand of FTG for all its fixed, mobile, Internet, and content services as part of a strategic plan. The companys first milestone was the rebranding of Wanadoo, the groups Internet and data-services business unit, into Orange. The group moved to the next phase by rebranding the fixed-line services and GSM operator MobileCom into Orange. In 2006 the JTG combined its four subsidiaries (Jordan Telecom, MobileCom, Wanadoo, and e-Dimension) under one management structure, becoming the single most integrated operator in Jordan. At this juncture, the company is faced with regulatory bottlenecks, increasing competition, and a changing customer profile.B. Vision Statement (Actual)

Our vision at JTG is to become the integrated telecommunications operator of choice in Jordan by transforming the company into a fast-moving, service-oriented organization, and to continuously provide the highest quality of differentiated services to meet the needs of its customers.C. Mission Statement (Actual)

JTG strives to provide integrated telecom products and services that are simple and user-friendly, while maintaining a sustainable business model that can be adapted to the requirements of a fast-paced and changing environment.Mission Statement (Proposed)Our mission at JTG is propelled by the Growth 2012, (5,6) strategy of entering new market segments (3) to secure a leading position as a Managed Service Provider (MSP) (4), with integrated telecom operations across the Middle East (3), a strong broadband strategy for JTG and the region, and utilizing Jordan as the regional backbone (7,8) for high-capacity telecommunication networks (4). With its dedicated employees (9), JTG offers customers (1) a diversified range of fixed, mobile, and Internet services 2 in the home and business markets (3).1. Customer2. Products or services3. Markets4. Technology5. Concern for survival, profitability, and growth6. Philosophy7. Self-concept8. Concern for public image9. Concern for employees

D. External AuditCPM Competitive Profile MatrixThe Competitive Profile Matrix (CPM) identifies a firms major competitor(s) and its particular strengths and weaknesses in relation to its strategic position. JTGs relative strengths and weaknesses based on the case details are portrayed in the weighted scores. JTG is currently the sole integrated telecommunications operator in Jordan and the second largest operator in the country in terms of number of customers. The local competitor is XPress Telecom, and the foreign-collaborated competitors are Zain Jordan, Orange Jordan, and Umniah. Their weighted scores are based on their perceived strengths and weaknesses comparative to JTG, and in terms of the critical success factors explicitly or implicitly reflected in the case. It can be seen that JTG is ahead of the foreign-collaborated GSM competitors Zain Jordan, Orange Jordan, and Umniah with a score of 3.34, with the local XPress Telecom trailing behind with its iDEN technology (1.97). The main strength of JTG is its variety of product lines, advanced technology (with French collaboration), significant market share, and product image. However, JTG needs to improve on its price competitiveness and liaison with government regulatory bodies. JTG could also face competition from over a dozen Internet service providers in the areas of pricing, product lines, and product quality. JTG

Zain JordanOrange JordanUmniahXPress Telecom

Foreign-owned CompetitorForeign-owned CompetitorForeign-owned CompetitorLocal Competitor

Critical Success FactorsWeightRatingWeighted

ScoreRatingWeighted

ScoreRatingWeighted

ScoreRatingWeighted

ScoreRatingWeighted

Score

Price Competition0.1030.3040.4030.3030.3030.30

Global Expansion0.0610.0640.2440.2440.2410.06

Management0.0830.2430.2430.2420.1620.16

Technology0.1240.4830.3640.4830.3620.24

Product Lines0.1240.4830.3640.4830.3620.24

Customer Loyalty0.0830.2420.1620.1620.1620.16

Market Share0.0940.3620.1830.2710.0920.18

Advertising0.0720.1430.2130.2120.1410.07

Product Quality0.1040.4030.3030.3030.3020.20

Product Image0.1040.4040.4030.3020.2020.20

Financial Position0.0830.2430.2430.2430.2420.16

TOTAL1.003.343.093.222.551.97

Opportunities

1. The worlds mobile phone connections are expected to rise 50 percent to six billion by 2013

2. Jordan, with 6.4 million inhabitants, has emerged as the country with the most competitive telecom sector in the Arab world3. Telecommunications is a billion-dollar industry in Jordan with an outlay of 13.5 percent of GDP4. The Jordanian government is working to address employment issues and education by developing ICT training and opportunities

5. Jordan has 5,313,600 mobile phone subscribers, with a 101 percent penetration rate

6. It is expected that the 3G services will bolster Internet penetration in Jordan by 50 percent by 2011

Threats

1. Internet penetration in Jordan remains comparatively low

2. There is intense competition by 12 competitors for the Internet market

3. The Jordanian governments regulatory strictures are an impediment to securing 3G operation

4. There is general customer dissatisfaction with the quality and service of Internet service providers in Jordan

5. Operators face challenges in areas such as regulation, standards, trends, and ethical practices6. There is the threat of a price war with competitors and consequent loss of market share

External Factor Evaluation (EFE) Matrix

An External Factor Evaluation (EFE) Matrix allows strategists to summarize and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information. JTG is in a comfortable position with its competitive stance in Jordan with a range of expertise in telecom products and services. With Jordan having the most competitive telecom sector in the Arab world, and over 100 percent penetration rate for mobile phone subscribers, JTG needs to assess its external opportunities and threats carefully and strategize by building on potential core competencies. As the Internet penetration rate is still in its infancy, perhaps JTG could capitalize on the opportunity presented by this promising sector. Inevitably, JTG cannot compromise on quality and service to differentiate itself and consolidate its market share; and it certainly needs to penetrate underexploited areas such as the Internet market.Key External FactorsWeightRatingWeighted Score

Opportunities

1. The worlds mobile phone connections are expected to rise 50 percent to six billion by 20130.1030.30

2. Jordan, with 6.4 million inhabitants, has emerged as the country with the most competitive telecom sector in the Arab world0.1040.40

3. Telecommunications is a billion-dollar industry in Jordan with an outlay of 13.5 percent of GDP0.0830.24

4. The Jordanian government is working to address employment issues and education by developing ICT training and opportunities0.0620.12

5. Jordan has 5,313,600 mobile phone subscribers, with a 101 percent penetration rate.0.1040.40

6. It is expected that the 3G services will bolster Internet penetration in Jordan by 50 percent by 20110.0630.18

Threats

1. Internet penetration in Jordan remains comparatively low0.0840.32

2. There is intense competition by 12 competitors for the Internet market0.1030.30

3. The Jordanian governments regulatory strictures are an impediment to securing 3G operation0.1040.40

4. There is general customer dissatisfaction with the quality and service of Internet service providers in Jordan0.0630.18

5. Operators face challenges in areas such as regulation, standards, trends, and ethical practices0.0820.16

6. There is the threat of a price war with competitors and consequent loss of market share0.0830.24

Total1.03.24

The average total weighted score is considered to be 2.5. A total weighted score of 4.0 indicates that the entity is responding in an outstanding way to existing opportunities and threats in its industry. In other words, the firms strategies effectively take advantage of existing opportunities and minimize the potential adverse effects of external threats. A total score of 1.0 indicates that the firms strategies are not capitalizing on opportunities or avoiding external threats. The total weighted score of 3.24 suggests that JTG has recognized the opportunities and threats it faces, and needs to embark on a serious review of its potential for consolidation of its customer base and market share, growth opportunities, distinctive competencies, and current wrangles with regulatory bodies in the Jordanian government.Product Positioning MatrixAfter markets have been segmented so that a firm can target particular customer groups, the next step is to find out what customers want and expect. Many firms have become successful by filling the gap between what producers see and customers perceive, as good service. Product positioning entails developing schematic representations that reflect how a firms products or services compare with their competitors regarding dimensions most important to success in the industry. Two matrices are presented below for JTG and the competitors.Product Positioning Matrix for Technology vs. Product LinesAs depicted below in the Product Positioning Matrix for Technology vs. Product Lines, JTGs Product Lines are wide and comparable to those of its close, foreign-collaborated GSM competitors Zain Jordan (majority Kuwait-based Zain group), Orange Jordan (majority France Telecom), and Umniah (majority Batelco of Bahrain). The all-Jordanian competitor XPress Telecom trails behind with its iDEN technology and lower market penetration with fewer product lines.

Product Positioning Matrix for Global Expansion and Product ImageIt can be seen from the Product Positioning Matrix below for Global Expansion and Product Image that JTG is surpassed in Global Expansion by the foreign-collaborated Orange Jordan, Zain Jordan, and Umniah. This is because, JTGs focus is Jordan, and at this time its global ambitions are hypothetical: Jordan is the leading Arab nation in the telecom industry, and has already benefited significantly from its collaboration with Orange and France Telecom. XPress Telecom is therefore rated below JTG on Global Expansion. For Product Image, Orange Jordan, Zain Jordan, and Umniah, with their high international profiles, are almost on par with JTG. XPress Telecom, as a recent local entrant, is well behind all of these players on the dimension of Product Image.

E. Internal Audit

Strengths 1. JTGs offer of global roaming for prepaid customers is the only one in Jordan.

2. With its ability to call upon the vast expertise of FTG, JTG is able to provide world telecom industry-level features and services

3. JTGs 3G+ Network delivers new services such as video calling, mobile broadband, and access to exclusive personalized and live TV4. JTG has partnered with Arab television network MBC to stream programs through Oranges 3G+ network directly to subscribers handsets

5. JTG has widened its customer bases over the past three years

Weaknesses

1. JTG faces the challenge of maintaining and improving its position in the mobile and Internet markets, in an increasingly competitive industry

2. JTG faces the risk of losing customers to the competition due to Government regulation of 3G services, as JTGs first-mover advantage would be eroded3. Net profit has shown either a slight decrease or marginal increase, disproportionate to the widening customer base

Financial Information for JTG* (Income Statement only)

YTD December 31, 2009YTD December 31, 2008Variance

Sales400.1401.4(0.3%)

Operating Expenses220.3222.9(1.2%)

Gross Operating Margin180.7179.00.9%

Cost of Sales % of Sales55.1%55.5%(0.4%)

Gross Profit104.0100.33.7

Gross Profit % of Sales26.0%25.0%1%

Source: Adapted from: JTG Annual Report, 2010.*Amounts are in Million JDs.

It is evident from the Income Statement results of JTG for the years 2008 and 2009 that gross profit is around 25 percent due to robust performance for the two years. However, sales growth has remained stagnant from 2008 to 2009 (0.3 percent). This may be the result of a combination of a growing customer base, stymied however, by regulatory strictures and delays in granting necessary licenses and permits as well as growing competition. It would be better to see a steady increase in income representing real growth and market expansion, and this will need astute strategic planning and execution.

Internal Factor Evaluation (IFE) Matrix

A summary step in conducting an internal strategic-management analysis is to construct an Internal Factor Evaluation (IFE) Matrix. This strategy-formulation tool summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among them. Itemized below are the strengths and weaknesses of JTG from the information provided, there are more strengths than weaknesses.Key Internal FactorsWeightRatingWeighted Score

Strengths

1. JTGs offer of global roaming for prepaid mobile phone customers is the only one in Jordan0.1230.36

2. With its ability to call upon the vast expertise of FTG, the JTG is able to provide world telecom industry-level features and services0.1430.42

3. JTGs 3G+ Network delivers new services such as video calling, mobile broadband, and access to exclusive personalized and live TV0.1440.56

4. JTG has partnered with Arab television network MBC to stream programs through Oranges 3G+ network directly to subscribers handsets0.1430.42

5. JTG has widened its customer bases over the past three years0.1230.36

Weaknesses

1. JTG faces the challenge of maintaining and improving its position in the mobile and Internet markets, in an increasingly competitive industry0.1030.30

2. JTG faces the risk of losing customers to the competition due to Government regulation of 3G services, as JTGs first-mover advantage would be eroded0.1420.28

3. Net profit has shown either a slight decrease or marginal increase, disproportionate to the widening customer base0.1020.20

Total1.002.90

Regardless of how many factors are included in an IFE Matrix, the total weighted score can range from a low of 1.0 to a high of 4.0, with the average score being 2.5. Total weighted scores well below 2.5 characterize organizations that are weak internally, whereas scores significantly above 2.5 indicate a strong internal position. In light of this, JTGs position with a score of 2.90 reflects a moderate internal position. There is little room for complacence, considering the increasingly competitive environment, government regulatory strictures and tardiness, and inroads into the arena by largely foreign-owned entities such as Zain Jordan, Orange Jordan, and Umniah.J. SWOT Strategies

Any organization, whether military, product-oriented, service-oriented, governmental, or even athletic, must develop and execute good strategies to win. A good offense without a good defense, or vice versa, usually leads to defeat. Developing strategies that use strengths to capitalize on opportunities could be considered an offense, whereas strategies designed to improve upon weaknesses while avoiding threats could be termed defensive. Taking into consideration the above identified External Audit of the Opportunities and Threats (OT) and the Internal Audit of Strengths and Weaknesses (SW), a SWOT Matrix can be compiled and is presented below as: SO (strengths-opportunities) Strategies; WO (weaknesses-opportunities) Strategies; ST (strengths-threats) Strategies; and, WT (weaknesses-threats) Strategies. Matching key external and internal factors is the most difficult part of developing a SWOT Matrix, requiring good judgment and there is no one best set of matches.StrengthsWeaknesses

1. JTGs offer of global roaming for prepaid mobile phone customers is the only one in Jordan

2. With its ability to call upon the vast expertise of FTG, JTG is able to provide world telecom industry-level features and services

3. JTGs 3G+ Network delivers new services such as video calling, mobile broadband, and access to exclusive personalized and live TV

4. JTG has partnered with Arab television network MBC to stream programs through Oranges 3G+ network directly to subscribers handsets

5. JTG has widened its customer bases over the past three years1. JTG faces the challenge of maintaining and improving its position in the mobile and Internet markets, in an increasingly competitive industry

2. JTG faces the risk of losing customers to the competition due to Government regulation of 3G services, as JTGs first-mover advantage would be eroded

3. Net profit has shown either a slight decrease or marginal increase, disproportionate to the widening customer base

OpportunitiesS-O StrategiesW-O Strategies

1. The worlds mobile phone connections are expected to rise 50 percent to six billion by 2013

2. Jordan, with 6.4 million inhabitants, has emerged as the country with the most competitive telecom sector in the Arab world

3. Telecommunications is a billion-dollar industry in Jordan with an outlay of 13.5 percent of GDP

4. The Jordanian government is working to address employment issues and education by developing ICT training and opportunities

5. Jordan has 5,313,600 mobile phone subscribers, with a 101 percent penetration rate6. It is expected that the 3G services will bolster Internet penetration in Jordan by 50 percent by 20111. JTG should strengthen and expand its mobile phone prepaid customer base for global roaming to become the market leader in this segment2. JTGs 3G+ Network should be bolstered for video calling, mobile broadband, and access to exclusive personalized and live TV

3. JTG should consolidate its customer base further by delivering through Oranges 3G+ network directly to subscribers handsets

1. By increasing the customer base and the penetration rate for mobile phone subscribers, JTG should become the price leader through economies of scale and scope

ThreatsS-T StrategiesW-T Strategies

1. Internet penetration in Jordan remains comparatively low2. There is intense competition by 12 competitors for the Internet market

3. The Jordanian governments regulatory strictures are an impediment to securing 3G operation

4. There is general customer dissatisfaction with the quality and service of Internet service providers in Jordan

5. Operators face challenges in areas such as regulation, standards, trends, and ethical practices6. There is the threat of a price war with competitors and consequent loss of market share1. Capitalizing on existing regulatory goodwill, JTG should continue to work with the government to secure 3G operations without impediments2. JTG should aim to retain existing customers by improving on the quality and service of Internet delivery1. JTG should combat the increasing competition through promotion of its core competence in mobile technology in terms of improved quality, reduced price, and better service resulting in customer satisfaction and loyalty

SO Strategies use a firms internal strengths to take advantage of external opportunities. JTG can capitalize on its large customer base to strengthen its mobile phone services, especially in the 3G sector, and for global roaming. Market penetration and consolidation of the customer base should continue unabated in view of the stiff competition.WO Strategies aim at improving internal weaknesses by taking advantage of external opportunities. Consistent with its expansion capabilities, JTG could launch an aggressive promotion campaign to increase the penetration rate for mobile phone subscribers, towards becoming the price leader through economies of scale and scope.ST Strategies use a firms strengths to avoid or reduce the impact of external threats. JTG needs to continue constructive dialogues with the government and its regulatory bodies to secure its 3G service capabilities without impediments.WT Strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats. JTG should combat the increasing competition through promotion of its core competence in mobile technology consistent with improved quality, reduced price, and better service, resulting in customer satisfaction and loyalty.

G. SPACE Matrix

The Strategic Position and Action Evaluation (SPACE) Matrix below indicates whether aggressive, conservative, defensive, or competitive strategies are most appropriate for a given firm. The axes of the SPACE Matrix represent two internal dimensions: (Financial Strength [FS] and Competitive Advantage [CA]), and two external dimensions: (Environmental Stability [ES] and Industry Strength [IS]). These four factors are perhaps the most important determinants of an organizations overall strategic position.

Financial Strength (FS)*Environmental Stability (ES)

Return on Investment4Risk involved in business-3

Leverage3Technological Changes-5

Liquidity5Price Range of Competing Products-4

Working Capital5Competitive Pressure-5

Cash Flow5Barriers to Entry-1

(*These figures are best estimates based on JTGs performance, market realities, and financial information available in the case)

Financial Strength (FS) Average 4.4Environmental Stability (ES) Average-3.6

Competitive Advantage (CA)Industry Strength (IS)

Market Share-2Growth Potential5

Product Quality-2Financial Stability4

Customer Loyalty-2Ease of Market Entry3

Product Life Cycle-4Resource Utilization4

Technological Know-how-2Profit Potential4

Control over Suppliers & Distributors-3Technological Know-how4

Productivity, Capacity Utilization3

Competitive Advantage (CA) Average-2.5Industry Strength (IS) Average

3.8

Y-axis: FS + ES = 4.4 + (-3.6) = +0.8X-axis: CA + IS = (-2.5) + (3.8) = +1.3The directional vector of the SPACE Matrix above indicates that JTG is in Quadrant I of the SPACE Matrix. Therefore, according to the results of the SPACE Matrix, it is recommended that JTG embark on an Aggressive Strategy on a growth trajectory in the highly competitive but promising telecom industry in Jordan, availing of the opportunities presented by the countrys ICT leadership in the Arab world. The company should thus balance all extant external and internal realities impinging on it. According to the SWOT recommendation, the company could avail of market penetration, market development, and product development. It would also be timely for the company to be horizontally integrated (acquiring similar firms towards oligopoly or monopoly), but not forward integrated (taking ownership of distribution channels and nodes such as retailing in mobile phones), or backward integrated (acquiring firms providing components for manufacture of ICT products). It appears from the overall strategic thrust of the various analyses including the CPM, EFE, IFE, SWOT, and Product Positioning Matrix, that JTG is unlikely to adopt an unrelated diversification strategy as the companys core competence lies in ICT. Related diversification is possible in tandem with horizontal integration, by JTG acquiring smaller competitors or partnering with larger competitors. This will help in controlling price wars and sharing technological know-how in the technology-intensive ICT industry. To become the undisputed market leader, JTG will certainly need to embark on a market penetration and market development strategy, together with product development to meet quality, price, and demand for various market segments in the promising and diversified, Jordanian ICT market.H. Grand Strategy Matrix

All organizations can be positioned in one of the Grand Strategy Matrixs four strategy quadrants. The Grand Strategy Matrix is based on two evaluative dimensions: competitive position and market (industry) growth. Any industry whose annual growth in sales exceeds 5 percent could be considered to have rapid growth. JTGs sales growth is sluggish at 0.3 percent, but its market leadership, financial stability, and distinctive competence puts the company in a healthy annual growth trajectory subject to negotiating the current regulatory bottlenecks. Appropriate strategies for an organization to consider are listed in sequential order of attractiveness in each quadrant of the matrix. Firms such as JTG located in Quadrant I of the Grand Strategy Matrix are in a strong strategic position with rapid market growth. For these firms, continued concentration on current markets (market penetration and market development) and products (product development) is an appropriate strategy (see also the SPACE Matrix above). As it would be unwise for a Quadrant I firm to shift notably from its established competitive advantage(s), JTG should consolidate and expand its market. When a Quadrant I organization has excessive resources, then backward, forward, or horizontal integration may be effective strategies in the case of JTG, a diversity of resources and proprietary technology should enable horizontal integration and related diversification. Quadrant I firms can afford to take advantage of external opportunities in several areas. It is recommended that JTG take calculated risks for expansion and consolidation of its already substantial customer base (see also the SPACE Matrix above).

1. Market development

2. Market penetration

3. Product development

4. Backward integration5. Forward integration

6. Horizontal integration

7. Related diversificationAccording to its Quadrant I location in the Grand Matrix, JTG is in a strong competitive position, and underscores the competitive stance reflected in the SPACE Matrix. JTG has a broad product line (see Product Positioning Matrix above, with comments), and can integrate horizontally to combat the increasing competition. As a Quadrant I firm, JTG can afford to take advantage of external opportunities in several areas; thus it can take risks aggressively to make further inroads into the promising Jordanian ICT market.

I. The Quantitative Strategic Planning Matrix (QSPM)The only analytical technique in the literature designed to determine the relative attractiveness of feasible alternative actions is the Quantitative Strategic Planning Matrix (QSPM), which comprises Stage 3 of the strategy-formulation analytical framework. This technique objectively indicates which alternative strategies are best. The QSPM uses input from Stage 1 analyses and matching results from Stage 2 analyses to decide objectively among alternative strategies. That is, the EFE Matrix, IFE Matrix, and Competitive Profile Matrix that make up Stage 1, coupled with the SWOT Matrix, SPACE Matrix, and Grand Strategy Matrix that make up Stage 2, provide the needed information for setting up the QSPM (Stage 3). The QSPM is a strategic decision-making tool that allows strategists to evaluate alternative strategies objectively, based on previously identified external and internal Critical Success Factors. Like other strategy-formulation analytical tools, the QSPM requires good intuitive judgment.

The left column of a QSPM consists of key external and internal factors (from Stage 1), and the top row consists of feasible alternative strategies (from Stage 2). Specifically, the left column of a QSPM consists of information obtained directly from the EFE Matrix and IFE Matrix. In a column adjacent to the Critical Success Factors, the respective weights received by each factor in the EFE Matrix and the IFE Matrix are recorded. The top row of a QSPM consists of alternative strategies derived from the SWOT Matrix, SPACE Matrix, and Grand Strategy Matrix. These matching tools usually generate similar feasible alternatives. However, not every strategy suggested by the matching techniques has to be evaluated in a QSPM. Strategists should use good intuitive judgment in selecting strategies to include in a QSPM.

Strategy 1Strategy 2Strategy 3

By increasing the customer base and the penetration rate for mobile phone subscribers, JTG should become the price leader through economies of scale and scopeJTGs 3G+ Network should be bolstered for video calling, mobile broadband, and access to exclusive personalized and live TV

JTG should strengthen and expand its mobile phone prepaid customer base for global roaming to become the market leader in this segment

Key FactorsWeightASTASASTASASTAS

Opportunities

1. The worlds mobile phone connections are expected to rise 50 percent to six billion by 20130.1040.4040.4030.30

2. Jordan, with 6.4 million inhabitants, has emerged as the country with the most competitive telecom sector in the Arab world0.1040.4840.4840.48

3. Telecommunications is a billion-dollar industry in Jordan with an outlay of 13.5 percent of GDP0.0840.3240.4330.24

4. The Jordanian government is working to address employment issues and education by developing ICT training and opportunities0.0620.1220.1210.06

5. Jordan has 5,313,600 mobile phone subscribers, with a 101 percent penetration rate.0.1030.3030.3040.40

6. It is expected that the 3G services will bolster Internet penetration in Jordan by 50 percent by 20110.0630.1840.2430.18

Threats

1. Internet penetration in Jordan remains comparatively low0.08------------

2. There is intense competition by 12 competitors for the Internet market0.1030.3040.4010.10

3. The Jordanian governments regulatory strictures are an impediment to securing 3G operation0.1030.3040.4020.20

4. There is general customer dissatisfaction with the quality and service of Internet service providers in Jordan0.06------------

5. Operators face challenges in areas such as regulation, standards, trends, and ethical practices0.0820.1620.1620.16

6. There is the threat of a price war with competitors and consequent loss of market share0.0830.2420.1620.16

TOTAL1.02.803.092.28

Strengths

1. JTGs offer of global roaming for prepaid mobile phone customers is the only one in Jordan0.1240.4820.2440.48

2. With its ability to call upon the vast expertise of FTG, JTG is able to provide world telecom industry-level features and services0.1440.5640.5610.14

3. JTGs 3G+ Network delivers new services such as video calling, mobile broadband, and access to exclusive personalized and live TV0.1440.5640.5620.28

4. JTG has partnered with Arab television network MBC to stream programs through Oranges 3G+ network directly to subscribers handsets0.1440.5640.5640.56

5. JTG has widened its customer bases over the past three years0.1230.3640.4830.36

Weaknesses

6. JTG faces the challenge of maintaining and improving its position in the mobile and Internet markets, in an increasingly competitive industry.0.1030.3040.4030.30

7. JTG faces the risk of losing customers to the competition due to Government regulation of 3G services, as JTGs first-mover advantage would be eroded.0.1430.4230.4240.56

8. Net profit has shown either a slight decrease or marginal increase, disproportionate to the widening customer base.0.1030.3030.3020.20

SUBTOTAL1.003.543.522.88

SUM TOTAL ATTRACTIVENESS SCORE6.346.615.16

J. Recommendations

Strategy #2: It is recommended that JTGs 3G+ Network should be bolstered for video calling, mobile broadband, and access to exclusive personalized and live TV.Strategy #1 could be complementary to Strategy #2, for by increasing the customer base and the penetration rate for mobile phone subscribers, JTG could become the price leader through economies of scale and scope even for video calling, mobile broadband, and access to exclusive personalized and live TV (Strategy #2).

Strategy #3 is limited to a narrow but stable market segment (i.e., prepaid mobile phone users), and will not be the focus of imminent strategizing as it is important for JTG to consolidate its position in Jordan for the evolving 3G-related technologies attracting international competition and first-mover advantages. If extra funding is possible from net profits in the prepaid mobile phone users segment, it should be used to primarily fuel Strategy#2, supported by Strategy #1. K. EpilogueFollowing a multi-pronged analysis using judgment and reasoning coupled with numerical and graphical outputs, three strategic choices were presented for JTG:

(1) By increasing the customer base and the penetration rate for mobile phone subscribers, JTG should become the price leader through economies of scale and scope.(2) JTGs 3G+ Network should be bolstered for video calling, mobile broadband, and access to exclusive personalized and live TV.

(3) JTG should strengthen and expand its mobile phone prepaid customer base for global roaming to become the market leader in this segment.

According to the comprehensive and decisive Quantitative Strategic Planning Matrix (QSPM), Strategy #2, with the highest Sum Total Attractiveness Score (STAS) [6.61], has emerged as the best option among the three promising alternatives. This involves JTG bolstering its 3G+ Network for video calling, mobile broadband, and access to exclusive personalized and live TV. As Strategy #1 is a close second with a STAS of 6.34, the company should augment its customer base and the penetration rate for mobile phone subscribers. As for Strategy #3 with a STAS score of 5.16, JTG is in a comfortable position in the prepaid mobile users segment, being the industry leader. Executing Strategies #2 and #1 would enable consolidation and expansion of the customer base for prepaid mobile users.

The biggest challenge facing JTG is not so much from foreign-collaborated operators such as Zain Jordan and Orange Jordan, but from its own government that is presenting bottlenecks to speedy implementation of 3G technology. It is important that JTG protect its interests and substantial customer base as the industry leader in Jordan, and lobby aggressively for equitable treatment by the concerned regulatory bodies in Jordan. Concurrently, JTG should not fail to grasp the cutting edge technologies such as those encapsulated in Strategy #2, and to avail of first-mover advantages. In the volatile and highly competitive ICT industry, it is all too easy for the complacent and timid to lose.XPress Telecom

Orange Jordan

JTG

Global Expansion (Low)

Global Expansion (High)

Umniah

Product Image (low)

-1

-2

-3

-4

-5

-6

-7

+7

-6

-1

-7

-5

-4

-3

-2

+7

+6

+5

+4

+3

+2

+1

Defensive

Competitive

Aggressive

Conservative

+1

+2

+3

+4

+5

+6

IS

ES

CA

FS

Slow Market Growth

Rapid Market Growth

StrongCompetitivePosition

Quadrant III

Quadrant IV

Quadrant I

Quadrant II

Weak Competitive Position

Zain Jordan

JTG

JTG

Technology (Low)

Technology (High)

JTG

Product Lines (low)

XPress Telecom

Orange Jordan

Product Image (High)

Product Lines (High)

Umniah

Zain Jordan

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