Download - city university assigment
-
7/28/2019 city university assigment
1/48
Allama Iqbal Open University, Islamabad
Assignment # 2
Report on
Strategic Analysis
Subject: Strategic Mangement
MBA 3rd semester
(Human Resource Department)
-
7/28/2019 city university assigment
2/48
Submitted to:
Sir Yaseen Jamal
Submitted by:
Saira Perveen
Roll No:
508194441
MBA:
3rd Semester
-
7/28/2019 city university assigment
3/48
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
-
7/28/2019 city university assigment
4/48
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
-
7/28/2019 city university assigment
5/48
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
-
7/28/2019 city university assigment
6/48
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
-
7/28/2019 city university assigment
7/48
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
-
7/28/2019 city university assigment
8/48
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
-
7/28/2019 city university assigment
9/48
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:
-
7/28/2019 city university assigment
10/48
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
-
7/28/2019 city university assigment
11/48
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 -
7/28/2019 city university assigment
12/48
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
-
7/28/2019 city university assigment
13/48
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 -
7/28/2019 city university assigment
14/48
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 -
7/28/2019 city university assigment
15/48
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 -
7/28/2019 city university assigment
16/48
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
-
7/28/2019 city university assigment
17/48
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 -
7/28/2019 city university assigment
18/48
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
-
7/28/2019 city university assigment
19/48
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 -
7/28/2019 city university assigment
20/48
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
-
7/28/2019 city university assigment
21/48
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
-
7/28/2019 city university assigment
22/48
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.
-
7/28/2019 city university assigment
23/48
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.
-
7/28/2019 city university assigment
24/48
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.
-
7/28/2019 city university assigment
25/48
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
-
7/28/2019 city university assigment
26/48
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:
-
7/28/2019 city university assigment
27/48
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
-
7/28/2019 city university assigment
28/48
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
-
7/28/2019 city university assigment
29/48
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.
-
7/28/2019 city university assigment
30/48
Internal Factor Evaluation Matrix
(IFE)
Competitive Profile Matrix (CPM)
External Factor Evaluation Matrix
(EFE)
-
7/28/2019 city university assigment
31/48
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
-
7/28/2019 city university assigment
32/48
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:
-
7/28/2019 city university assigment
33/48
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
-
7/28/2019 city university assigment
34/48
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
-
7/28/2019 city university assigment
35/48
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
-
7/28/2019 city university assigment
36/48
Social/Cultural/Demographic/Environmental
Technological
Competitive
Weight
Strategy 1
Strategy 2
Stratey 3
-
7/28/2019 city university assigment
37/48
Key Internal Factors
Management
Marketing
Finance/Accounting
Production/Operations
Research and Development
-
7/28/2019 city university assigment
38/48
Computer Information Systems
Sum total A.S.
This is the second way to analyze a strategy.
12)-Introduction to organization
-
7/28/2019 city university assigment
39/48
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 -
7/28/2019 city university assigment
40/48
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 -
7/28/2019 city university assigment
41/48
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
-
7/28/2019 city university assigment
42/48
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.
-
7/28/2019 city university assigment
43/48
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;
-
7/28/2019 city university assigment
44/48
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
-
7/28/2019 city university assigment
45/48
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.
-
7/28/2019 city university assigment
46/48
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;
-
7/28/2019 city university assigment
47/48
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
-
7/28/2019 city university assigment
48/48
WWW.Google.com
Visit to organization
44
http://www.google.com/http://www.google.com/