city university assigment

7/28/2019 city university assigment

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Allama Iqbal Open University, Islamabad

Assignment # 2

Report on

Strategic Analysis

Subject: Strategic Mangement

MBA 3rd semester

(Human Resource Department)


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Submitted to:

Sir Yaseen Jamal

Submitted by:

Saira Perveen

Roll No:

508194441

MBA:

3rd Semester


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Acknowledgements

Praise to be Allah, the cherisher and Lord of the world,

most gracious and most merciful. I am most grateful to

Almighty Allah, the most beneficial, the merciful and

gracious, whose faith encouraged me to complete the

work presented in this assignment.

Our teachers have been the driving force behind our

education. Here Id first like to thanks Sir Yaseen


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Jamal who doubled as our Strategic Management

teacher and advisor. He helped me to deal with

disappointment and helped me remain focused on my

goals in time and I am successful in research work.

Secondly, I would like to say thanks to my parents who

guided me in every path of life.

Contents

1)-Introduction to topic

2)-Tools of Strategic Analysis

3)-PEST Analysis

4)-Scenario Planning or Scenario Thinking


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5)-The Five Forces Analysis

6)-Market Segmentation

7)-Directional Policy Matrix

8)-Competitor Analysis

9)-Critical Success Factor Analysis

10)-SWOT Analysis

11)-Comprehensive Strategy-Formulation Analytical

Model Framework

12)-Introduction to Organization

13)-PTCL VSS strategy

14)-Purpose of PTCL VSS strategy

15)-How PTCL analyzed this strategy before

implementation


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15.1)-PTCL Vision

15.2)-PTCL Mission

15.3)-PTCL Market Segmentation

15.4)-SWOT Analysis of the VSS strategy

16)-Conclusion

17)-Recommendations

18)-References


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Executive Summary

The purpose of this research is to enhance my

understanding of the unique purpose of strategic

analysis. Strategic analysis is done to check for a

strategy either it should be implemented or not.

Strategic analysis could done through the use of


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various tools and techniques like Directional Policy

Matrix, Competitor Analysis, Boston Consulting

Matrix, SWOT Analysis, PEST Analysis etc. PTCL

has implemented voluntary separation scheme to

increase the efficiency of the organization. VSS was

actually for those employees who were not aware of

the latest technology. So, VSS was a good strategy to

reduce such kind of employees, although the company

has an effect on its finances in 2008. But in future, it

will be proved as the best strategy adopted by the

company.

1)-Introduction to topic

Before discussion on Strategy Analysis, I willtell that

what is a strategy? "Strategy is the directionand

scopeof an organization over the long-term:which

achieves advantagefor the organization through its

configuration of resourceswithin a challenging


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environment, to meet the needs of marketsand to

fulfill stakeholderexpectations".

S

Strategy Formulation

Strategic Analysis

Strategy Evaluation

Strategy Implementation

trategic Model

Setting a strategy requires knowledge in three

areas:


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Customers: Existing customers and potential

customers and markets. What do they do? What would

help them do what they do better? What are their

needs? Where are the most profitable customers?

Competencies: Skills, knowledge and relationships.

What do you do well? What abilities could you draw on?

What costs do you have to carry? Where do you make

money?

Competition: The whole competitive environment from

regulation to real life competition. What is the basis ofcompetition? Where are the threats? Where is their

pressure and where is the market easy?

Analysis of the three areas is interrelated. Who you

choose as your target audience will have implications

for what capabilities you need, which will have an


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impact on what competitive pressures are around which

will influence who you choose as your target audience.

We take each of these areas in turn.

Analysis of target markets

Analysis of competencies

Analysis of competition and environment

Some companies will have all this knowledge to hand

easily and readily. Others will require information and

analysis to be carried out in order to bring together

the knowledge together into one place.

Strategy Analysis,is all about the analyzing the

strength of businesses' position and understanding the

important external factors that may influence that

position.
http://www.dobney.com/Strategies/target_markets.htmhttp://www.dobney.com/Strategies/target_markets.htmhttp://www.dobney.com/Strategies/competences.htmhttp://www.dobney.com/Strategies/competitive_analysis.htmhttp://www.dobney.com/Strategies/competitive_analysis.htmhttp://www.dobney.com/Strategies/competitive_analysis.htmhttp://www.dobney.com/Strategies/competences.htmhttp://www.dobney.com/Strategies/target_markets.htm


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Before the strategic analysis, mission statement must

be taken into consideration.

2)-Tools of Strategic Analysis

The process of Strategic Analysis can be assisted by a

number of tools, including:

PEST Analysis

Scenario Planning

Five Forces Analysis

Market Segmentation

Directional Policy Matrix

Competitor Analysis

Critical Success Factor Analysis

SWOT Analysis

3)-PEST Analysis


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PEST analysis stands for "Political, Economic, Social,

and Technological analysis" and describes a framework

of macro-environmental factors used in the

environmental scanningcomponent ofstrategic

management. Some analysts added Legal and

rearranged the mnemonic to SLEPT;inserting

Environmental factors expanded it to PESTEL or

PESTLE, which is popular in the UK.

Political factors, are how and to what degree a

government intervenes in the economy.

Specifically, political factors include areas such as

tax policy,labour law,environmental law,trade

restrictions,tariffs, and political stability.

Economic factors includeeconomic growth,interest rates,exchange ratesand theinflation

rate. These factors have major impacts on how
http://en.wikipedia.org/wiki/Environmental_scanninghttp://en.wikipedia.org/wiki/Environmental_scanninghttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Tax_policyhttp://en.wikipedia.org/wiki/Labour_lawhttp://en.wikipedia.org/wiki/Labour_lawhttp://en.wikipedia.org/wiki/Labour_lawhttp://en.wikipedia.org/wiki/Environmental_lawhttp://en.wikipedia.org/wiki/Environmental_lawhttp://en.wikipedia.org/wiki/Trade_restrictionhttp://en.wikipedia.org/wiki/Trade_restrictionhttp://en.wikipedia.org/wiki/Trade_restrictionhttp://en.wikipedia.org/wiki/Trade_restrictionhttp://en.wikipedia.org/wiki/Tariffshttp://en.wikipedia.org/wiki/Tariffshttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Exchange_ratehttp://en.wikipedia.org/wiki/Exchange_ratehttp://en.wikipedia.org/wiki/Inflation_ratehttp://en.wikipedia.org/wiki/Inflation_ratehttp://en.wikipedia.org/wiki/Inflation_ratehttp://en.wikipedia.org/wiki/Inflation_ratehttp://en.wikipedia.org/wiki/Inflation_ratehttp://en.wikipedia.org/wiki/Inflation_ratehttp://en.wikipedia.org/wiki/Exchange_ratehttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Tariffshttp://en.wikipedia.org/wiki/Trade_restrictionhttp://en.wikipedia.org/wiki/Trade_restrictionhttp://en.wikipedia.org/wiki/Environmental_lawhttp://en.wikipedia.org/wiki/Labour_lawhttp://en.wikipedia.org/wiki/Tax_policyhttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Environmental_scanning


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businesses operate and make decisions. For

example, interest rates affect a firm'scost of

capitaland therefore to what extent a business

grows and expands.

Social factors include the cultural aspects and

include health consciousness, population growth

rate, age distribution, career attitudes and

emphasis on safety.

Technological factors include ecological and

environmental aspects, such asR&Dactivity,automation, technology incentives and the rate of

technological change.

Environmental factors include weather, climate,

and climate change, which may especially affectindustries such as tourism, farming, and insurance.
http://en.wikipedia.org/wiki/Cost_of_capitalhttp://en.wikipedia.org/wiki/Cost_of_capitalhttp://en.wikipedia.org/wiki/Cost_of_capitalhttp://en.wikipedia.org/wiki/Cost_of_capitalhttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/Automationhttp://en.wikipedia.org/wiki/Automationhttp://en.wikipedia.org/wiki/Technological_changehttp://en.wikipedia.org/wiki/Technological_changehttp://en.wikipedia.org/wiki/Climate_changehttp://en.wikipedia.org/wiki/Climate_changehttp://en.wikipedia.org/wiki/Technological_changehttp://en.wikipedia.org/wiki/Automationhttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/Cost_of_capitalhttp://en.wikipedia.org/wiki/Cost_of_capital


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Legal factors includediscrimination law,consumer

law,antitrust law,employment law, andhealth and

safety law.

4)- Scenario planning or scenario thinking

It is a strategic planning tool used to make flexible

long-term plans. It is a method for learning about the

future by understanding the nature and impact of the

most uncertain and important driving forces affecting

our world.

The method is based on creating a series of 'different

futures' generated from a combination of known

factors, such as demographics, with plausible

alternative political, economic, social, technical, legal

and environmental (PESTLE) trends which are keydriving forces. The goal is to craft diverging worlds by

extrapolating these heavily-influencing driving forces.
http://en.wikipedia.org/wiki/Discrimination_lawhttp://en.wikipedia.org/wiki/Discrimination_lawhttp://en.wikipedia.org/wiki/Discrimination_lawhttp://en.wikipedia.org/wiki/Consumer_lawhttp://en.wikipedia.org/wiki/Consumer_lawhttp://en.wikipedia.org/wiki/Consumer_lawhttp://en.wikipedia.org/wiki/Antitrust_lawhttp://en.wikipedia.org/wiki/Antitrust_lawhttp://en.wikipedia.org/wiki/Employment_lawhttp://en.wikipedia.org/wiki/Employment_lawhttp://en.wikipedia.org/wiki/Health_and_safety_lawhttp://en.wikipedia.org/wiki/Health_and_safety_lawhttp://en.wikipedia.org/wiki/Health_and_safety_lawhttp://en.wikipedia.org/wiki/Health_and_safety_lawhttp://en.wikipedia.org/wiki/Health_and_safety_lawhttp://en.wikipedia.org/wiki/Employment_lawhttp://en.wikipedia.org/wiki/Antitrust_lawhttp://en.wikipedia.org/wiki/Consumer_lawhttp://en.wikipedia.org/wiki/Consumer_lawhttp://en.wikipedia.org/wiki/Discrimination_law


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The technique can also include anticipatory thinking

elements that are difficult to formalize, such as

subjective interpretations of facts, shifts in values,

new regulations or inventions.

5)-The Five Forces Analysis

The threat of substitute productsThe existence of products outside of the realm of the

common product competitors that increases the

propensity of customers to switch to alternatives:

Relative price performance of substitutes

Buyer switching costs

Perceived level of product differentiation

The threat of the entry of new competitorsProfitable markets that yield high returns will draw

firms. This results in many new entrants, which will


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effectively decrease profitability. Unless the entry of

new firms can be blocked by incumbents, the profit

rate will fall towards a competitive level (perfect

competition).

The existence of barriers to entry (patents,

rights, etc.)

Economies of product differences

Brand equity

Switching costs or sunk costs

Capital requirements

Access to distribution

Customer loyalty to established brands

Absolute cost advantages

Learning curve advantages

Expected retaliation by incumbents

Government policies

The intensity of competitive rivalry
http://en.wikipedia.org/wiki/Perfect_competitionhttp://en.wikipedia.org/wiki/Perfect_competitionhttp://en.wikipedia.org/wiki/Barriers_to_entryhttp://en.wikipedia.org/wiki/Patentshttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Sunk_costshttp://en.wikipedia.org/wiki/Sunk_costshttp://en.wikipedia.org/wiki/Customer_loyaltyhttp://en.wikipedia.org/wiki/Learning_curvehttp://en.wikipedia.org/wiki/Learning_curvehttp://en.wikipedia.org/wiki/Customer_loyaltyhttp://en.wikipedia.org/wiki/Sunk_costshttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Patentshttp://en.wikipedia.org/wiki/Barriers_to_entryhttp://en.wikipedia.org/wiki/Perfect_competitionhttp://en.wikipedia.org/wiki/Perfect_competition


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For most industries, the intensity of competitive

rivalry is the major determinant of the

competitiveness of the industry.

Sustainable competitive advantage through

improvisation

The bargaining power of customersThe bargaining power of customers is also described as

the market of outputs: the ability of customers to put

the firm under pressure, which also affects the

customer's sensitivity to price changes.

Buyer concentration to firm concentration ratio

Degree of dependency upon existing channels of

distribution

Bargaining leverage, particularly in industries with

high fixed costs


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Buyer switching costs relative to firm switching

costs

Buyer information availability

Availability of existing substitute products

Buyer price sensitivity

Differential advantage (uniqueness) of industry

products

The bargaining power of suppliers

The bargaining power of suppliers is also described as

the market of inputs. Suppliers of raw materials,components, labor, and services (such as expertise) to

the firm can be a source of power over the firm.

Suppliers may refuse to work with the firm, or, e.g.,

charge excessively high prices for unique resources.

Supplier switching costs relative to firm switching

costs
http://en.wikipedia.org/wiki/Switching_costshttp://en.wikipedia.org/wiki/Switching_costs


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Degree of differentiation of inputs

Presence of substitute inputs

Supplier concentration to firm concentration ratio

Employee solidarity (e.g., labor unions)

6)-Market Segmentation

A market segment is a group of people or organizations

sharing one or more characteristics that cause them to

have similar product and/or service needs. A true

market segment meets all of the following criteria: it is

distinct from other segments (different segments have

different needs), it is homogeneous within the segment

(exhibits common needs); it responds similarly to a

market stimulus, and it can be reached by a market

intervention. The term is also used when consumerswith identical product and/or service needs are divided

up into groups so they can be charged different


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amounts. These can broadly be viewed as 'positive' and

'negative' applications of the same idea, splitting up

the market into smaller groups.

7)-Directional Policy Matrix

This matrix measures the health of the market and

your strength to pursue it. The results indicate the

direction for future investment. The recommendation

may be to invest, grow, harvest or divest.

Characterize Your Enterprise

The expert system will position your enterprise on the

chart based upon your description of:

Supplier Bargaining Power

Threat of Substitutes

Threat of New Entrants


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Competitive Rivalry

Buyer Bargaining Power

Product Quality

Product Value

Relative Market Share

Reputation

Customer Loyalty

Staying Power

Experience

You can trace through the supporting analysis and its

conclusions, adjusting your input until you are satisfied

your description accurately characterizes your

enterprise.


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Analysis of Your Enterprise Position

Invest Grow Harvest Divest

High MarketAttractivenessHigh BusinessStrengths

High MarketAttractivenessLow BusinessStrengths

Low MarketAttractivenessHigh BusinessStrengths

Low Market AttractivenessLow Business Strengths

This is the ideal

quadrant. Yourstrengths aredirected at a highlyattractive market.Invest your bestresources in thoseparts of your businesswhich are in thisquadrant.

You are in an

uncomfortablequadrant. The marketpotential is attractivebut you do not havethe businessstrengths necessaryfor being reallysuccessful. Theoptions facing you areeither to take whatyou can while it is stillpossible or to investin building a bettercompetitive position.You must be selectivein your efforts here,as this segment willcost you to invest inevery aspect of thebusiness.

In this quadrant you

have high strengths ina market that has lostits attractiveness interms of futurepotential. It is stillgood for near termprofits, so maintainthe position for aslong as possible.

Think carefully about what

you are doing to be in thisquadrant. The market isnot particularly attractiveand your businessstrengths are belowaverage here. Keep in thissegment only if it supportsa more profitable part ofyour business (for instance,if this segment completes aproduct line range) or if itabsorbs some of theoverhead costs of a moreprofitable segment.


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8)-Competitor Analysis

One common and useful technique is constructing acompetitor array. The steps include:

Define your industry - scope and nature of theindustry

Determine who your competitors are Determine who your customers are and what

benefits they expect Determine what the key success factors are in

your industry Rank the key success factors by giving each one a

weighting - The sum of all the weightings must add

up to one. Rate each competitor on each of the key success

factors Multiply each cell in the matrix by the factor

weighting. Sum columns for a weighted assessment of the

overall strength of each competitor relative toeach other.


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This can best be displayed on a two dimensional matrix

- competitors along the top and key success factors

down the side.

An example of a competitor array follows:

Key

Industry

Success

Factors

WeightingCompetitor

#1 rating

Competitor

#1weighted

Competitor

#2 rating

Competitor

#2weighted

1 -

Extensive

distribution

.4 6 2.4 3 1.2

2 -

Customerfocus

.3 4 1.2 5 1.5

3 -

Economies

of scale

.2 3 .6 3 .6

4 -

Productinnovation

.1 7 .7 4 .4

Totals 1.0 20 4.9 15 3.7


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In this example competitor #1 is rated higher than

competitor #2 on product innovation ability (7 out of

10, compared to 4 out of 10) and distribution networks

(6 out of 10), but competitor #2 is rated higher on

customer focus (5 out of 10). Overall, competitor #1 is

rated slightly higher than competitor #2 (20 out of 40

compared to 15 out of 40). When the success factors

are weighted according to their importance, competitor

#1 gets a far better rating (4.9 compared to 3.7).

9)-Critical Success Factor Analysis

Critical Success Factors (CSFs) are the critical

factors or activities required for ensuring the

success your business. The term was initially used in

the world of data analysis, and business analysis.

There are four basic types of CSF's , they are:


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1. Industry CSF's resulting from specific industrycharacteristics;

2. Strategy CSF's resulting from the chosencompetitive strategy of the business;

3. Environmental CSF's resulting from economic ortechnological changes; and

4. Temporal CSF's resulting from internalorganizational needs and changes.

Examples of Critical Success factors

Statistical research into CSFs on organizations hasshown there to be seven key areas. These CSF's are:

1. Training and education2. Quality data and reporting3. Management commitment, customer satisfaction4. Staff Orientation5. Role of the quality department


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6. Communication to improve quality, and7. Continuous improvement

These were identified when Total Quality was at its

peak, so as you can see have a bias towards quality

matters. You may or may not feel that these are right

or indeed critical for your organization.

10)-SWOT Analysis

SWOT is an abbreviation for Strengths, Weaknesses,

Opportunities and Threats

SWOT analysis is an important tool for auditing the

overall strategic position of a business and its

environment.

Strengths and weaknesses are Internal factors. For

example, a strength could be your specialist marketing


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expertise. A weakness could be the lack of a new

product.

Opportunities and threats are external factors. For

example, an opportunity could be a developing

distribution channel such as the Internet, or changing

consumer lifestyles that potentially increase demand

for a company's products. A threat could be a new

competitor in an important existing market or a

technological change that makes existing products

potentially obsolete.

11)-Comprehensive Strategy-Formulation

Analytic model Framework

It is a second model to analyze a strategy.


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Internal Factor Evaluation Matrix

(IFE)

Competitive Profile Matrix (CPM)

External Factor Evaluation Matrix

(EFE)


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CPM & EFE from external assessment

Stage 1: The Input Stage

Basic input information for the matching & decision

stage matrices

Requires strategists to quantify subjectivity earlyin the process

Good intuitive judgment always needed

SWOT Matrix

BCG Matrix

Grand Strategy Matrix

Stage 2: The Matching Stage

Match between organizations internal resources &

skills and the opportunities & risks created by itsexternal factors


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E.g. internal: strong R and D function External changing demographics (population getting

older) Strategy: Develop new products for older adults

(related to long term objectives financial orstrategic)

SWOT Matrix

Leave Blank Strengths S

List Strengths

Weaknesses W

List Weaknesses

Opportunities O

List Opportunities

SOStrategies

Use strengths to takeadvantage ofopportunities

WOStrategies

Overcomingweaknesses by takingadvantage ofopportunities

Threats T

List Threats

STStrategies

Use strengths to avoidthreats

WTStrategies

Minimize weaknessesand avoid threats

Strengths: Weaknesses:


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1. R and D almost complete2. Basis for strong management

team3. Key first major customer

acquired4. 4.Initial product can evolve

into range of offeringsLocated near a major centreof excellence

5. Very focusedmanagement/staff

Well-rounded and managed

business

1. Over dependent onborrowings - Insufficientcash resources

2. Board of Directors is toonarrow

3. Lack of awareness amongstprospective customers

4. Need to relocate to largerpremises

5. Absence of strongsales/marketing expertise

6. Overdependence on few keystaff

Emerging new technologies maymove market in new directions

Threats: Opportunities:

1. 1.Major player may entertargeted market segment2.New technology may makeproducts obsolescent

Economic slowdown couldreduce demand

2. Euro/Yen may move against $3. Market may become price

sensitive

1. Market segment is poised forrapid growth

2. Export markets offer greatpotential

3.Distribution channels seeking newproducts Scope to diversify intorelated market segments

BCG Matrix

Enhances multi-divisional firm in formulating

strategies


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Autonomous divisions = business portfolio

Divisions may compete in different industries

F

High

1.0

Medium

.50

Low

0.0

ocus on market-share position & industry growthrate

Stars

II

Medium

0

Question Marks

I


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Cash Cows

III

Low

-20

Dogs

IV

Grand Strategy Matrix

Tool for formulating alternative strategies Based on two dimensions Competitive position

Market growth

Quantitative Strategic Planning Matrix (QSPM)

QSPM : information from IFE and EFE

Key External Factors Economy

Political/Legal/Governmental


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Social/Cultural/Demographic/Environmental

Technological

Competitive

Weight

Strategy 1

Strategy 2

Stratey 3


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Key Internal Factors

Management

Marketing

Finance/Accounting

Production/Operations

Research and Development


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Computer Information Systems

Sum total A.S.

This is the second way to analyze a strategy.

12)-Introduction to organization


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Pakistan Telecommunication Company Limited (PTCL)

is the largest telecommunication company in Pakistan.

This company provides telephony services to the nation

and still holds the status of backbone for country's

telecommunication infrastructure despite arrival of a

dozen other telcos including telecom giants like Telenorand China Mobile.

From the beginnings of Posts & Telegraph Department

in 1947 and establishment of Pakistan Telephone &

Telegraph Department in 1962, PTCL has been a major

player in telecommunication in Pakistan. Despite having

established a network of enormous size, PTCL workings

and policies have attracted regular criticism from

other smaller operators and the civil society of

Pakistan.
http://en.wikipedia.org/wiki/Pakistanhttp://en.wikipedia.org/wiki/Pakistan


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Pursuing a progressive policy, the Government in 1991,

announced its plans to privatize PTCL, and in 1994

issued six million vouchers exchangeable into 600

million shares of the would-be PTCL in two separate

placements. Each had a par value of Rs. 10 per share.

These vouchers were converted into PTCL shares in

mid-1996.

In 1995, Pakistan Telecommunication (Reorganization)

Ordinance formed the basis for PTCL monopoly over

basic telephony in the country. The provisions of the

Ordinance were lent permanence in October 1996

through Pakistan Telecommunication (Reorganization)

Act. The same year, Pakistan Telecommunication

Company Limited was formed and listed on all stock

exchanges of Pakistan.
http://en.wikipedia.org/wiki/Privatizehttp://en.wikipedia.org/wiki/Privatize


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In the middle of 2005 Government of Pakistan had

decided to sell at least 26 percent of this company to

some private agency.

13)-PTCL VSS Strategy

PTCL has announced voluntary separation scheme in

November 2007.

PTCL has introduced Voluntary Separation Scheme

(vss), so that employees whose age is over 58 years,

will take retirement. PTCL will pay a more amount than

the normal retirement amount.

PTCL has paid ;

Gazetted officers = 90*basic pay

Non-Gazetted officers = 120*basic pay


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The pension benefit will be given to those employees

whose service is 20 years minimum.

Total cost is about Rs 35 billion, out of which 50 per

cent amount will be paid by the good old Government of

Pakistan. The scheme was projected to cost Rs 34.858

billion, assuming that 60 percent of the employees avail

this package. The share of GoP will be Rs 17.429 billion

to be paid out of the privatization proceeds.

14)-Purpose of the VSS strategy

The intended / eligible target of VSS are PTCL

employees who are not over 58 years of age

probably management does not consider them relevant

to the latest technology and strategy. According to

insiders, this scheme works well for those who are

relatively new at PTCL.


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15)-How PTCL analyzed this strategy before

implementation

PTCL analyzed this strategy by using the following

tools and techniques. Before analyzing a strategy after

formulation of strategy, mission and vision must be

considered. And PTCL mission and vision are as follows.

15.1)-PTCL Vision

To be the leading information and communication

technology service provider in the region by achieving

customer satisfaction and maximizing shareholders

value.

15.2)-PTCL MISSION

To achieve our vision by having;


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An organizational environment that fosters

professionalism, motivation and quality.

An environment that is cost effective and quality

conscious.

Services that are based on the most optimum

technology.

Quality and Time conscious customer service.

Sustained growth in earnings and profitability.

15.3)-PTCL Market Segmentation

As the vision statement shows for PTCL the country is

the target. As it is the backbone of fixed line

telecommunications in Pakistan.

15.4)-PTCL SWOT Analysis For The Strategy

The swot analysis of the VSS is as follows;

Strengths of the strategy


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Strategy will reduce number of employees.

Expenses regarding permanent employees will be

reduced.

Training cost of employees will be reduced.

Motivated employees could be appointed on

temporary basis.

Weaknesses of the strategy

It can effect the financial position of PTCL.

Opportunities

Latest technology could be easily used.

This strategy is a step towards efficient/cost

effective operations.


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Threats

No market threat has been observed.

16)-Conclusion

Although the Voluntary Separation Scheme is a

successful step to improve the company. As the

efficiency of employees has been increased and the

new technologies have been adopted by the company.

But the PTCL could not announce final dividend due to

high cost of Voluntary Separation Scheme.

17)-Recommendations

As the VSS is for the improvement of PTCL but some

other steps could also be taken, some of these steps

are as follows;


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PTCL should reduce the line rent to attract most

customers.

Complaint service should be quick.

PTCL should introduce separate packages for rural

and urban areas.

18)-References

Text book of Strategic Management by Fred

R.David


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WWW.Google.com

Visit to organization

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http://www.google.com/http://www.google.com/

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