Strategic Implementation

Allama Iqbal Open University Islamabad (Department of Business Administration)

ACKNOWLEDGEMENT

All acclamation to Allah who has empowered and enabled me to accomplish the task

Successfully first of all I would like to thank our Allah Almighty who really helps me in every problem during the project. I would like to express my sincere and humble gratitude to Almighty who’s Blessings, help and guidance has been a real source of all my achievements in my life.

I would like to admit that I completed this project due to parents who pray for my success.

I also wish to express my appreciation to my supervisor Mr. Younis who helps me a lot and introduce me to new dimension of knowledge.

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DEDICATION

My project is dedicated to my beloved Parents, teachers,

brothers, sister and all of my well wishers

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Strategic Management

“The ongoing process of formulating implementing and controlling broad plans to gudie the organization to achieving its strategic goals, given its internal and external environment.”

Strategy

A comprehensive plan aimed at helping the organization achieve its goals”

The Nature & Concept of Strategy Implementation

The implementation of organization strategy involves the application of the management process to obtain the desired results. Particularly, strategy implementation includes designing the organization's structure, allocating resources, developing information and decision process, and managing human resources, including such areas as the reward system, approaches to leadership, and staffing.

Each of these management functions has been the subject of extensive writing and research by scholars and practitioners and has covered in management books.

Since full coverage of each management function is beyond the scope of this thesis, I shall focus only on the factors that are most critical to effective implementation strategy.

Strategy implementation is "the process of allocating resources to support the chosen strategies". This process includes the various management activities that are necessary to put strategy in motion, institute strategic controls that monitor progress, and ultimately achieve organizational goals.

For example, according to Steiner, "the implementation process covers the entire managerial activities including such matters as motivation, compensation, management appraisal, and control processes".

As Higgins has pointed out, "almost all the management functions -planning, controlling, organizing, motivating, leading, directing, integrating, communicating, and innovation -are in some degree applied in the implementation process".

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Pierce and Robinson say that "to effectively direct and control the use of the firm's resources, mechanisms such as organizational structure, information systems, leadership styles, assignment of key managers, budgeting, rewards, and control systems are essential strategy implementation ingredients".

The implementation activities are in fact related closely to one another, and decisions about each are usually made simultaneously.

Strategy Implementation and the Strategic Management Process

The strategy implementation and strategy formulation processes are closely interrelated. Figure 1-1illustrates this relationship. The desired results of an organization are established during the strategy formulation process.

Implementation consists of the issues involved in putting the formulated strategy to work. It is necessary to spell out more precisely how the strategic choice will come to be. No strategy, no matter how brilliantly formulated, will succeed if it cannot be implemented.

The Relation Between Strategy Formulation And Strategy Implementation

In order to achieve its objectives, an organization must not only formulate but also implement its strategies effectively. The Figure represents the importance of both tasks in matrix form and suggests the probable outcomes of the four possible combinations of these variables:

Success is the most likely outcome when strategy is appropriate and implementation good.

Roulette involves situation wherein a poor strategy is implemented well.

Trouble is characterized by situations wherein an appropriate strategy is poorly implemented.

Failure involves situations wherein a poor strategy is poorly implemented.

Diagnosing why a strategy failed in the roulette, trouble, and failure cells in order to find a remedy requires the analysis of both formulation and implementation.

S.Certo and J. Peter proposed a five-stage model of the strategy implementation process:

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Determining how much the organization will have to change in order to implement the strategy under consideration, under consideration;

analyzing the formal and informal structures of the organization;

analyzing the "culture" of the organization;

selecting an appropriate approach to implementing the strategy;

implementing the strategy and evaluating the results.

Implementation is successfully initiated in three interrelated stages:

Identification of measurable, mutually determined annual objectives.

Development of specific functional strategies.

Development and communication of concise policies to guide decisions.

A General Framework For Strategy Implementation

The first step in implementation is identifying the activities, decisions, and relationships critical to accomplishing the activities.

There are six principal administrative tasks that shape a manager's action agenda for implementing strategy. In general, every unit of an organization has to ask, "What is required for us to implement our part of the overall strategic plan and how can we bets get it done.

The specific components of each of the six strategy-implementation tasks:

Building an organization capable of executing the strategy. The organization must have the structure necessary to turn the strategy into reality. Furthermore, the firm's personnel must possess the skill needed to execute the strategy successfully. Related to this is the need to assign the responsibility for accomplish key implementation tasks to the right individuals or groups.

Establishing a strategy-supportive budget. If the firm is to accomplish strategic objectives, top management must provide the people, equipment, facilities, and other resources to carry out its part of the strategic plan. Further, once the strategy has been decided on, the key tasks to performed and kinds of decision required must be identified, formal plans must also be developed. The tasks should be arranged in

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a sequence comprising a plan of action within targets to be achieved at specific dates.

Installing internal administrative support systems. Internal systems are policies and procedures to establish desired types of behavior, information systems to provide strategy-critical information on a timely basis, and whatever inventory, materials management, customer service, cost accounting, and other administrative systems are needed to give the organization important strategy-

executing capability. These internal systems must support the management process, the way the managers in an organization work together, as well as monitor strategic progress.

Devising rewards and incentives that are tightly linked to objectives and strategy. People and departments of the firm must be influenced, through incentives, constraints, control, standards, and rewards, to accomplish the strategy.

Exercising strategic leadership. Strategic leadership consists of obtaining commitment to the strategy and its accomplishment. It also involves the constructive use of power and politics, and politics in building a consensus to support the strategy.

Strategy Implementation:Six Supporting Factors

Organizations successful at strategy implementation effectively managesix key supporting factors:

Action Planning

Organization Structure

Human Resources

The Annual Business Plan

Monitoring and Control

Linkage.

Action Planning

First, organizations successful at implementing strategy develop detailed action plans... chronological lists of action steps (tactics) which add the necessary detail to their strategies. And assign

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responsibility to a specific individual for accomplishing each of those action steps. Also, they set a due date and estimate the resources required to accomplish each of their action steps. Thus they translate their broad strategy statement into a number of specific work assignments.

Organizational Structure

Next, those successful at implementing strategy give thought to their organizational structure. They ask if their intended strategy fits their current structure. And they ask a deeper question as well... "Is the organization's current structure appropriate to the intended strategy?"

We're reminded here of a client we worked with some years ago. The company was experiencing problems implementing its strategy calling for the development of two new products.

The reason the firm had been unable to develop those products was simple... they had never organized to do so. Lacking the necessary commitment for new product development, management didn't establish an R&D group. Rather, it assigned its manufacturing engineering group the job of new product development... and hired two junior engineers for the task. Since the primary function of the manufacturing engineering group was to keep the factory humming, those engineers kept getting pulled off their "new product" projects and into the role of the manufacturing support. Result – no new products.

Human Resour ce Factors

Organizations successful at strategy implementation consider the human resource factor in making strategies happen. Further, they realize that the human resource issue is really a two part story. First, consideration of human resources requires that management think about the organization's communication needs. That they articulate the strategies so that those charged with developing the corresponding action steps (tactics) fully understand the strategy they're to implement.

Second, managers successful at implementation are aware of the effects each new strategy will have on their human resource needs. They ask themselves the questions... "How much change does this strategy call for?" And, "How quickly must we provide for that change?" And, "What are the human resource implications of our answers to those two questions?"

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In answering these questions, they'll decide whether to allow time for employees to grow through experience, to introduce training, or to hire new employees.

The Annual Business Plan

Organizations successful at implementation are aware of their need to fund their intended strategies. And they begin to think about that necessary financial commitment early in the planning process. First, they "ballpark" the financial requirements when they first develop their strategy. Later when developing their

action plans, they "firm up" that commitment. As a client of ours explains, they "dollarize" their strategy. That way, they link their strategic plan to their annual business plan (and their budget). And they eliminate the "surprises" they might otherwise receive at budgeting time.

Monitoring & Control

Monitoring and controlling the plan includes a periodic look to see if you're on course. It also includes consideration of options to get a strategy once derailed back on track. Those options (listed in order of increasing seriousness) include changing the schedule, changing the action steps (tactics), changing the strategy or (as a last resort) changing the objective. (For more on this point, see "Monitoring Implementation of Your Strategic Plan.")

available from corporate as well as human and technological resources in the R&D department.

MORE ON STRATEGY IMPLEMENTATION

A key role of a CEO's is to communicate a vision and to guide strategic planning. Those who have successfully implemented strategic plans have often reported that involving teams at all levels in strategic planning helps to build a shared vision, and increases each individual's motivation to see plans succeed.

Clarity and consistent communication, from mapping desired outcomes to designing performance measures, seem to be essential to success. Successful leaders have often engaged their teams by simply telling the story of their shared vision, and publicly celebrating large and small wins, such as the achievement of milestones. To ensure that the vision is shared, teams need to know that they can test the theory, voice opinions, challenge premises, and suggest alternatives without fear of reprimand.

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http://www.birnbaumassociates.com/monitoring.htm

http://www.birnbaumassociates.com/monitoring.htm


Implementing strategic plans may require leaders who lead through inspiration and coaching rather than command and control. Recognizing and rewarding success, inspiring, and modeling behaviors is more likely to result in true commitment than use of authority, which can lead to passive resistance and hidden rebellion.

CREATING STRATEGIC PLANS

The senior management team must come together to review, discuss, challenge, and finally agree on the strategic direction and key components of the plan.

Without genuine commitment from the senior team, successful implementation is unlikely.

Strategic group members must challenge themselves to be clear in their purpose and intent, and to push for consistent operational definitions that each member of the team agrees to. This prevents differing perceptions or turf-driven viewpoints later on. A carefully chosen, neutral facilitator can be essential in helping the team to overcome process, group dynamics, and interpersonal issues.

A common way to begin is to review the organization's current state and future possibilities using a SWOT (strength, weakness, opportunity, and threat) analysis. This involves identifying strengths and core capabilities in products, resources, people, and customers. These are what the organization is best at, and why it is in business. Many organizations have responded to this review by spinning off ventures that were not related to their core business. For example, Chrysler sold its interests in Maserati, Lambourghini, and Diamond Star and then concentrated on developing "great cars, great trucks." This sent a clear message to employees and other stakeholders, and triggered the company's renaissance.

Using SWOT, once strengths and core capabilities are defined the next step is to identify weaknesses or vulnerabilities. This is usually the most difficult for organizations and leaders to assess. The identification of gaps is often threatening. In some organizations it is not considered safe to admit to weakness; but an honest appraisal can make the difference between success and failure. Again, reviews should include a look at products, services, resources, customers, and employees. Do the right skills exist in the current staff? Are there enough resources to invest in areas of critical need? Are the appropriate systems and structures in place to support the needs of the team? Does the culture reinforce and connect with the mission and vision of the organization?

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Now the review moves to the external environment. What opportunities exist for development and growth? Do these opportunities correspond to the organization's strengths? What are the critical changes the market faces over the next one, three, and five years? How well is the organization positioned for the anticipated market changes? Additional points for debate include the greatest innovation or change that needs to occur for the organization to be successful, and the values that will drive these changes. Next, using the SWOT assessment process, threats in the current and future market are identified. How is the competition positioned relative to the opportunities for growth that have been identified, and how are they positioned relative to the organization's strengths and weaknesses?

With this information, organizations can finalize their strategy by defining the vision, creating a mission statement, and identifying their competitive advantages. The communication of the strategy will require a clear, consistent message. It is an ideal time for the leadership to operationally define each critical area of the plan to ensure agreement and commitment. Key stakeholders should be included in the process. Soliciting their input is often a valuable aide in implementation.

Finally, organizations should review each of the gaps that have been identified. Do the necessary resources exist to invest in shoring up the gaps? Are these resources allocated properly? It is usually not possible to address all of the gaps at once. Organizations should create a priority list for action so plans are realistic and focused on the greatest areas of need. These priorities will become a key focus of implementing the plan.

Once the senior leadership team has completed the top-level strategy, the next step is to break that overall goal down into functional areas or core strategies.

Typically this will include service/operations management, technology management, product management, supplier management, people management, and financial management, or some variation on these areas. Each identifies how they contribute to achieving the overall strategic plan. They can model the steps taken by the senior team and conduct a SWOT analysis from their vantage point. Once the core strategies are defined, the senior team must ensure that the overall

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strategy will be achieved; that is, that the sum of the parts (functional strategies) will add up to the whole (overall strategy).

IMPLEMENTING STRATEGIC PLANS

Once strategies have been agreed on, the next step is implementation; this is where most failures occur. It is not uncommon for strategic plans to be drawn up annually, and to have no impact on the organization as a whole.

A common method of implementation is hoopla-a total communication effort. This can involve slogans, posters, events, memos, videos, Web sites, etc. A critical success factor is whether the entire senior team appears to buy into the strategy, and models appropriate behaviors. Success appears to be more likely if the CEO, or a very visible leader, is also a champion of the strategy.

Strategic measurement can help in implementing

The strategic plan. Appropriate measures show the strategy is important to the leaders, provide motivation, and allow for follow-through and sustained attention. By acting as operational definitions of the plan, measures can increase the focus of the strategy, aligning the workforce around specific issues. The results can include faster changes (both in strategic implementation, and in everyday work); greater accountability (since responsibilities are clarified by strategic measurement, people are naturally more accountable); and better communication of responsibilities (because the measures show what each group's primary responsibility is), which may reduce duplication of effort.

Creating a strategic map (or causal business model) helps identify focal points; it shows the theory of the business in easily understood terms, showing the cause and effect linkages between key components. It can be a focal point for communicating the vision and mission, and the plan for achieving desired goals. If tested through statistical-linkage analysis, the map also allows the organization to leverage resources on the primary drivers of success.

The senior team can create a strategic map ( or theory of the business) by identifying and mapping the critical few ingredients that will drive overall performance. This can be tested (sometimes immediately, with existing data) through a variety of statistical

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techniques; regression analysis is frequently used, because it is fairly robust and requires relatively small data sets.

This map can lead to an instrument panel covering a few areas that are of critical importance. The panel does not include all of the areas an organization measures, rather the few that the top team can use to guide decisions, knowing that greater detail is available if they need to drill down for more intense examination. These critical few are typically within six strategic performance areas: financial, customer/market, operations, environment (which includes key stakeholders), people, and partners/suppliers. Each area may have three or four focal points; for example, the people category may include leadership, common values, and innovation.

Once the strategic map is defined, organizations must create measures for each focal point. The first step is to create these measures at an organizational level. Once these are defined, each functional area should identify how they contribute to the overall measures, and then define measures of their own. Ideally, this process cascades downward through the organization until each individual is linked with the strategy and understands the goals and outcomes they are responsible for and how their individual success will be measured and rewarded.

STRATEGY IMPLEMENTATION ISSUES

Strategy implementation almost always involves the introduction of change to an organization. Managers may spend months, even years, evaluating alternatives and selecting a strategy. Frequently this strategy is then announced to the organization with the expectation that organization members will automatically see why the alternative is the best one and will begin immediate implementation. When a strategic change is poorly introduced, managers may actually spend more time implementing changes resulting from the new strategy than was spent in selecting it. Strategy implementation involves both macro-organizational issues (e.g., technology, reward systems, decision processes, and structure), and micro-organizational issues (e.g., organization culture and resistance to change).

MACRO-ORGANIZATIONAL ISSUES OF STRATEGY IMPLEMENTATION

Macro-organizational issues are large-scale, system-wide issues that affect many people within the organization. Galbraith and Kazanjian argue that there are several major internal subsystems of the organization that must be coordinated to successfully implement a

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new organization strategy. These subsystems include technology, reward systems, decision processes, and structure. As with any system, the subsystems are interrelated, and changing one may impact others. Technology can be defined as the knowledge, tools, equipment, and work methods used by an organization in providing its goods and services. The technology employed must fit the selected strategy for it to be successfully implemented. Companies planning to differentiate their product on the basis of quality must take steps to assure that the technology is in place to produce superior quality products or services. This may entail tighter quality control or state-of-the-art equipment. Firms pursuing a low-cost strategy may take steps to automate as a means of reducing labor costs. Similarly, they might use older equipment to minimize the immediate expenditure of funds for new equipment.

Reward systems or incentive plans include bonuses and other financial incentives, recognition, and other intangible rewards such as feelings of accomplishment and challenge. Reward systems can be effective tools for motivating individuals to support strategy implementation efforts. Commonly used reward systems include stock options, salary raises, promotions, praise, recognition, increased job autonomy, and awards based on successful strategy implementation. These rewards can be made available only to managers or spread among employees throughout the organization. Profit sharing and gain sharing are sometimes used at divisional or departmental levels to more closely link the rewards to performance.

Questions and problems will undoubtedly occur as part of implementation. Decisions pertaining to resource allocations, job responsibilities, and priorities are just some of the decisions that cannot be completely planned until implementation begins. Decision processes help the organization make mid-course adjustments to keep the implementation on target.

Organizational structure is the formal pattern of interactions and coordination developed to link individuals to their jobs and jobs to departments. It also involves the interactions between individuals and departments within the organization. Current research supports the idea that strategies may be more successful when supported with structure consistent with the new strategic direction. For example, departmentalization on the basis of customers will likely help implement the development and marketing of new products that appeal to a specific customer segment and could be particularly useful in implementing a strategy of differentiation or focus. A functional organizational structure tends to have lower overhead and allows for

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more efficient utilization of specialists, and might be more consistent with a low-cost strategy.

MICRO-ORGANIZATIONAL ISSUES OF STRATEGY IMPLEMENTATION

Micro-organizational issues pertain to the behavior of individuals within the organization and how individual actors in the larger organization will view strategy implementation. Implementation can be studied by looking at the impact organization culture and resistance to change has on employee acceptance and motivation to implement the new strategy.

Peters and Waterman focused attention on the role of culture in strategic management. Organizational culture is more than emotional rhetoric; the culture of an organization develops over a period of time is influenced by the values, actions and, beliefs of individuals at all levels of the organization. Persons involved in choosing a strategy often have access to volumes of information and research reports about the need for change in strategies. They also have time to analyze and evaluate this information. What many managers fail to realize is that the information that may make one strategic alternative an obvious choice is not readily available to the individual employees who will be involved in the day-to-day implementation of the chosen strategy. These employees are often comfortable with the old way of doing things and see no need to change. The result is that management sees the employee as resisting change.

Employees generally do not regard their response to change as either positive or negative. An employee's response to change is simply behavior that makes sense from the employee's perspective. Managers need to look beyond what they see as resistance and attempt to understand the employee's frame of reference and why they may see the change as undesirable.

ROLE OF TOP MANAGEMENT

Top management is essential to the effective implementation of strategic change. Top management provides a role model for other managers to use in assessing the salient environmental variables, their relationship to the organization, and the appropriateness of the organization's response to these variables. Top management also shapes the perceived relationships among organization components.

Top management is largely responsible for the determination of organization structure (e.g., information flow, decision-making processes, and job assignments). Management must also recognize the

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existing organization culture and learn to work within or change its parameters. Top management is also responsible for the design and control of the organization's reward and incentive systems.

Finally, top management are involved in the design of information systems for the organization. In this role, managers influence the environmental variables most likely to receive attention in the organization. They must also make certain that information concerning these key variables is available to affected managers. Top-level managers must also provide accurate and timely feedback concerning the organization's performance and the performance of individual business units within the organization. Organization members need information to maintain a realistic view of their performance, the performance of the organization, and the organization's relationship to the environment.

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COMPANY BACKGROUND

Introduction

The Dhabi Group is a multinational company based in the UAE, which owns andoperates a wide range of business concerns that are spread across 3 different continents.It has a diversified business interest in the institutions that have enjoyed commercialsuccess as a result of its strong financial resources and extensive management expertise.The Abu Dhabi Group's major investments are in the following sectors:

Telecommunications Hospitality services Property development Oil exploration and supplies Banking and financial services Automobile industries

Warid Telecom takes pride in being backed by the Abu Dhabi Group, one of the largest groups in the Middle East and in Pakistan. Warid Telecom is currently operational inBangladesh and Pakistan, while it is also setting pace o initiate its operation in Uganda& Congo. Within the markets Warid is already operating, it has quickly developed a large customer base and established itself as one of the leaders of telecom service sector. In Bangladesh, Warid Telecom commenced its operations under a landmark MOU agreed upon by the Dhabi Group and the Government of Bangladesh worth USD 1 billion, out of which USD 750 million was exclusively committed for investment in the telecommunication sector of the country. Succeeding the MOU signing, the BTRC license for telecom service provision was issued to Warid Telecom, followed by thesigning of interconnectivity agreement with all the existing telecom companies ofBangladesh. In May 10th, 2007, Warid Telecom launched its commercial operations in Bangladesh Expanded to cover 61 districts and being used by 2 million customers.

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Company:Warid`s New Look:

An evolution that strengthens the Warid identity while keeping the customers inFocus Use of a more contemporary font & style to give a more approachable image. This new logo encompasses the expanding reach of Warid not just in Pakistan but in an international footprint With our strengthened GPRS/EDGE network we would empower our customers to create their own life style networks

Involving Businesses:

International Investments:

· Iranian Sanden Industries· J.C. Mc Leans & Co.· Neo Pharma· National Tele Systems and Services· Al-Jazira Management Mall· Abu Dhabi Vegetable Oil Company· Nama Development Enterprises.· Le Royal Meridian Hotel, Abu Dhabi· Dhabi contracting· Union National Banking, U.A.E.· Alfalah Exchange Company, U.A.E.· Bank Alfalah Ltd., U.A.E.

Investment in Pakistan:

. Bank Alfalah Ltd.· Alfalah GHP Investment Management· Alfalah Securities· United Bank Limited· Warid Telecom· Wateen Telecom· Emaar Al Bilaad Properties

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Warid Team:

Board of Directors:

1. Mr. Bashir A. Tahir2. Mr.Parvez a. Shahid3. Mr. Lim Chaon Poh4. Mr. Quah Kung Yang

Management Team:

1. Mr. Tariq Gulzar (Chief Financial Officer)2. Mr. Shahzad Rauf (Chief Strategy and Operation Officer3. Mr. Javed Mushtaq (Chief Information Officer)

Internal Analysis: Vision and Mission statements, goals and objectives: Group’s Mission and Vision Statement

To be Asia Pacific’s best multimedia solutions group. Breaking Barriers, Building Bonds.We enable communication by breaking barriers and building bonds. We help businesses and people communicate anytime, anywhere and in variousways.We make communications easier, faster, more economical and reliable by: Breaking the barriers of distance, price, time and technology, and Building strong bonds among Sing Tel employees, and with our shareholders, customers and business partners. We believe that creating and delivering value to our customers, employees and shareholders is fundamental to our business.

Mission and Vision statement of Warid Telecom:

Ward’s Mission Statement:

“Our aim is to be perceived not only as a telecommunication operator of voice Services, but also as a universal provider of comprehensive communications services For both residential and business customers. Warid's corporate identity seeks to Reflect the changes in telecom sector in relation to helping customers keep pace with Rapidly changing technology in the field of communication, through maximum network coverage and clear connectivity that we have committed to provide”

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Warid`s Vision Statement:

“Be a part of largest post paid cellular base in Pakistan and to become the leader in national communications arena with a strong international presence”

Warid Telecom started its operation in May 2005 from Pakistan. Warid Telecom International LLC, purchased a license for operating a nationwide mobile telephony network, (WLL) and long distance international (LDI) for $291 million US dollars. Within 80 days of launch Warid attracted more than 1 million users. Currently the network has around 7.6 million subscribers. In Warid business strategy four things are:

Competitiveness: differentiated in value added aspects

Cost Leadership: by providing less price service/product

Rapid Response of company: when need identify they response to it

Customer care by providing quality service:

The pre-paid segment is branded and marketed as Zem Pre-Paid. Zahi-Post-paid and Zem Pre-paid user enjoy various value added services (VAS), such as SMS, MMS, GPRS, 64K SIM and a host of other features. However International Roaming is only available to its Zahi (post-paid) users.

Warid telecom is introducing two types of product in all over the Pakistan-

1. Zem Prepaid2. Zahi Post Paid

Zem Prepaid

Zem is a prepaid connection provided by Warid telecom. Under this connection customer obtain a digital SIM and transfer this SIM to his name. Under this connect6ion there is no need of any security or payment of line rent. The customers purchase prepaid scratch cards and load it into its Warid SIM at any time during a period of one year. The customers of Zem connections are free to load balances at any time and amount of their own choice.

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Zahi

Zahi is a post-paid connection provided by the Warid telecom. In this connection, the customer has to pay line rent plus the charges of call every month. In this connection customer is billed every month. In this connection Warid, telecom has four further categories

·Silver Gold Diamond Platinum

Company:

According to the seasoned management author and practitioner, Peter Drucker, “All modern businesses have two and only two functions, Marketing and Innovation; the rest is cost on business.”

One can imagine how important innovation is for operating in today’s business environment. Warid insists on periodic innovations in products, customer’s retention for a longer time is impossible. It is impossible for technology dependant firms to survive without consistent innovation.

Innovation can be the prime reason for a firm’s success. Innovation offers a competitive advantage, but it is costly and often is easily copied by competitors. For that reason, innovation tends to be more of an advantage in highly evolving industries like Telecom, fashion, etc. In those industries, trends change quickly, so there is less risk of innovation by one company being copied by another company

Strategy Formulation:It is useful to consider strategy formulation as part of a strategic management process that comprises three phases: diagnosis, formulation, and implementation. Strategic management is an ongoing process to develop and revise future-oriented strategies that allow an organization to achieve its objectives, considering its capabilities, constraints, and the environment in which it operates.

Diagnosis includes: (a) performing a situation analysis (analysis of the internal environment of the organization), including identification and evaluation of current mission, strategic objectives, strategies, and results, plus major strengths and weaknesses; (b) analyzing the organization's external environment, including major opportunities and

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threats; and (c) identifying the major critical issues, which are a small set, typically two to five, of major

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problems, threats, weaknesses, and/or opportunities that require particularly high priority attention by management.Formulation, the second phase in the strategic management process, produces a clear set of recommendations, with supporting justification, that revise as necessary the mission and objectives of the organization, and supply the strategies for accomplishing them. In formulation, we are trying to modify the current objectives and strategies in ways to make the organization more successful. This includes trying to create "sustainable" competitive advantages -- although most competitive advantages are eroded steadily by the efforts of competitors.

Three Aspects of Strategy formulation:

The following three aspects or levels of strategy formulation, each with a different focus, need to be dealt with in the formulation phase of strategic management. The three sets of recommendations must be internally consistent and fit together in a mutually supportive manner that forms an integrated hierarchy of strategy, in the order given.

Corporate Level Strategy:

In this aspect of strategy, we are concerned with broad decisions about the total organization's scope and direction. Basically, we consider what changes should be made in our growth objective and strategy for achieving it, the lines of business we are in, and how these lines of business fit together. It is useful to think of three components of corporate level strategy: (a) growth or directional strategy (what should be our growth objective, ranging from retrenchment through stability to varying degrees of growth - and how do we accomplish this), (b) portfolio strategy (what should be our portfolio of lines of business, which implicitly requires reconsidering how much concentration or diversification we should have), and (c) parenting strategy (how we allocate resources and manage emphasis, and how much do we integrate our various lines of business).

Competitive Strategy (often called Business Level Strategy):

This involves deciding how the company will compete within each line of business (LOB) or strategic business unit (SBU).

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Functional Strategy: These more localized and shorter-horizon strategies deal with how each functional area and unit will carry out its functional activities to be effective and maximize resource productivity.

List of Strategies Formulated:On account of sluggish economic growth and political instability in the country, we suggest that the company should localize its strategy in order to increase its market share and improve its financial performance

Marketing Strategies:

Warid Telecom has divided its segmentation and strategy division into five segments on the basis of their characteristics. Markets consist of buyers and buyers differ in one or more ways. They may differ in their wants, resources, locations, buying attitudes and buying practices. The core concept behind companies using marketing segmentation concept is to divide large homogeneous markets into smaller segments that can be reached effectively and efficiently with products and services that satisfy needs, wants, desires and trends of certain segment. Characteristics that govern segmentation and strategy development in Telecom industry

Specifically mobile services according to a certain segment are Age Educational background Gender Income National, regional or other geographical areas of origin Social class Religion Culture Behaviors Population Tele density in area to be segmentedSo according to these

above mentioned factors Warid divide its marketing strategy into five segments which are

Postpaid Segment Masses Segment Female Segment Youth Segment Corporate Segment

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Postpaid Segment:

Postpaid Segment is the one which includes individuals with good income and usage more thanthat of prepaid customers. Postpaid customers Pay bill at the end of month depending on the service used. Pay specific amount in line rent every month, no matter they use service or not. Enjoy better range of value added services than prepaid customers. Postpaid Segmentation Section designs marketing activities to better satisfy the needs of Postpaid consumers.

Masses Segment:

Masses Segment is the biggest segments involving most no of people. Masses segmentation section develops marketing ideas and activities to perform, so that masses customers enjoy maximum benefits. Consumers from masses segments use relatively less. Masses customers Pay before using the service. Enjoy basic and VAS services Have less brand loyalty in most cases. Ready to switch to other mobile services in case of cheaper services

Female Segment:

Importance of role of females cannot be overlooked in this modern era. That’s why Warid Telecom has also developed females segment as a separate segment. The role of Female segmentation section is to develop ideas that would entertain female population in Pakistan. Currently ongoing “Zem Baton ke committee Campaign” promoted by Bushra Ansari is such an example.

Youth Segment:

Youth drives a nation; similarly, youth is taken by cellular companies as a segment which can drive other segments as well and affect trends of customers of other segments too. If the youth is targeted in better way, lot of customers can be gained. Warid Floodlight Tape Ball tournament for youth segment is one of such examples.

Corporate Segment:

Corporate segment is niche segment which can be source of great revenue for\ organization. Corporate Segmentation section develops idea that can provide maximum support and facilities to their most profitable segment. Ongoing “Black Berry Campaign” is one of its examples. Corporate segments are provided with Best possible VAS Better rates Security and Network Solutions.

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Product Positioning:

Warid positioned itself around simplicity and subtlety, and attracted subscribers more through word of mouth about its service quality than with advertising. Unfortunately, Warid wasn’t able to capitalize on its great start, and hasn’t been able to position itself as a premium brand in the industry; rather, its attempt to characterize itself as a service Provider that offers the best rates has led Warid to be associated with cheap affordability. Warid consider itself at its growth stage and it has 18% of market share and it can be next adoption for youth.

Pricing Strategy

When warid starts it offering more value and quality rather than reducing the pricing of its products and its uses both demand-pull and demand-push strategies for penetrating the market. Its innovative strategies like 1 second billing and 30 second billing are the strategies to capture the large share of market. Now warid focus on reducing the prices of its products to increase the market share of telecom industry. As now there is always good mouth for warid thus warid can increase its market by reducing the prices of its products.

Strategy Implementation

The Way Organizations Change To Develop Capabilities Needed To Better Implement Strategy. The expression of the strategy in terms of functional policies also serves to highlight any practical issues that might not have been visible at higher level.

Enhancements of Efficiency, Quality, Innovation and Customer Responsiveness:

Company viz. Warid:Our study of the Pakistan telecom sector with specific reference to Warid has indicated that Warids needs to focus on customer potential markets and constant innovation by introducing new packages.

Competition:

Ufone started its operations from Islamabad on 29th January 2001 as the youngest entrant in the cellular market. Ufone, a subsidiary of PTCL, is the only Pakistani-owned cellular service operator in Pakistan.

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With a total current investment of over $350 Million, including a recent contract of $161 Million for expansion & capacity for 2004-05, we believe in solid commitment to growth, security & reliability. Currently, with a market share of over 24%, and an aggressive commercial plan, we have more than tripled our customer base in the last quarter to over 1.5 million subscribers…the fastest uptake of any cellular service operator in Pakistan! Ufone is the only GSM operator with 2.5G GPRS service, which is the next generation technology and offers

High speed data service. WAP data service. Multimedia messaging service. Offer real VPN system for corporate clients. Ufone is the subsidiary of PTCL. Therefore it has better

protection.

Mobilink GSM (PMCL), a subsidiary of Orascom Telecom, is the market leader inproviding state-of-the-art communications solutions in Pakistan. We can proudlyboast of being the first cellular service provider in Pakistan to operate on a 100% digital GSM technology.We offer tariff plans that are exclusively designed to cater to the communication needs f a diverse group of people, taking into account occasional users to businessmen. To chieve this objective, we offer both postpaid (Indigo) and the prepaid (JAZZ) solutions to our customers. n addition to providing advanced voice communication services, we also offer a number of value added services to our valued subscribers. Keeping in mind our customers' convenience, we have also bundled mobile handsets, either sold independently or undled in Get Set Go Pack

Mobilink GSM started operations in the year 1994; from then on it has shown enormous rowth. At the time when it entered the market it was a small player in the cellular arket of Pakistan it is now the market leader both in terms of growth as well as in erms of having the largest subscriber base in Pakistan ISO 9002 Quality Management System Certification for Billing, Engineering.

Departments and CS Contact Center Implementation of a full Intelligent Network (IN) latform from Siemens for the Prepaid platform guest Call Center in Pakistan, which is there to assist the customers 24 hours.

Only cellular service in Pakistan to provide coverage on the M2 motorway. Bilateral roaming agreements signed with 100 countries around the world to have true roaming service operational in 151 operators of the world.

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MOBILINK GSM's Short Message Service Center allows Vehicle Tracking and Fleet management services that are being provided by Tracker (Pvt.) Ltd., under the brand are of C-Track, a company licensed by Pakistan Telecom Authority (PTA). Tracker urgently operates from Karachi but can provide these facilities at all those locations here GSM coverage is available.

Value Chain Analysis:A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. A diamond cutter can be used as an example of the difference. The cutting activity may have a low cost, but the activity adds much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond. Typically, the described value chain and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality certification of the business, e.g. ISO 9001.

Strategy Executive Process:

This process empowers every employee toward a common strategy by focusing on a continual process of prioritization, improvement, and control. In other words, it solidifies the workforce towards contributing to the development and implementation of a successful strategy via these three important parameters. The organization plans and deploys strategic objectives during prioritization, while employees and management continually fix performance gaps in the most critical areas throughout improvement, and subsequently lock-in on improvement gains during control.

Activities to be implemented:

Sales representatives target all the untapped markets and niches, by using WARID’s current products.

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http://en.wikipedia.org/wiki/ISO_9001


Revenue objectivity should be given high attention , and it should increase by 40% every year (for the next 2 years.)

Product line should be extended by offering new service for the customers. Warid is lacking in communication with its customers so it should focus on this activity.

More Regional Departmentalization should be there for detailed marketing analysis. There should be dencetrization decision making and employee should be encouraged for their opinions.

More budget and resources should be allocated to advertisement and sales promotion.

Role of R&D should be increased to help1) Target markets most effectively2) To get knowledge about consumer’s table and preference as.

How implementation is to be done:

Develop desirable skills in the employees who are assigned the basics of target implemented these skills may include. The ability of sales force, personnel in finance department, expert in R&D etc, should first understand the nature of the tasks or task’s importance foot the company. To increase the ability to put right people on right jobs .i.e. The person of finance dept. should not be given the tasks of R&D, which is highly sensitive and innovational field.

Communication:

Rapid and accurate movement of information should be confirmed .To do so efficient and effective feedback systems should be introduced.

Time and location of implementation:

Proper time period should be given for the start and end of the task and each personnel related to that specific job should be given complete information about the geographic area of his/her sales and the volume to be sold in case personal selling and sale promotion.(the balanced score board technique may be adopted)

Evaluation and Control:

For evaluation and control WARID should conducts a comprehensive audit of all the depts. By comparing the current results to that of company objectives .They get comprehensive information from all the departments carefully and its analysis is conducted with great care.

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The results are analyzed with great emphasis on the company’s behalf. If there appears any deficit then revise their

strategies implement them and then get the results and if there are no loopholes found they continue to implement that strategy for the specified period of time. This evaluation conduct twice a year

Porter’s 5 forces and industry attractiveness strength of competitive pressure as an overview:In telecommunication sectors Porter' five forces can be better applied as compared to other businesses. Below we have discussed all those factors which directly and indirectly affect Warid Telecom.

The Threat of New Entrants in Telecom Industry:

Government of Pakistan is giving a friendly environment to telecommunication sectors. Now there are six competitors in telecom sectors and competition is becoming hard among these telecom sectors. It is said that although Telenor has 18% market share compared to Ufone'22% but Telenor has continued its efforts even to outdo the telecom giant in Pakistan, Mobilink. Therefore Telenor is creating a tougher environment for Warid. Furthermore the entry of Vodafone can create unpredictable situation for Warid. So we can say that the threat of new entry in telecom sectors is very high.

The Power of Buyers:

There are six competitors in telecom sectors having strong competition. They are offering attractive packages at cheaper price. Buyers have the power to buy any service which suits them. Introduction of MNP (Mobile Number Portability) has given service to the customers to switch to another telecom company if they are not satisfied with their current connection. So in Pakistan the power of buyers for telecom sector is high. All telecom companies devise their strategies and policies as per the customer’s demands.

The Power of Suppliers:

In telecommunication sectors the competition between suppliers is also high. As ZTE, Alcatel, Nortel, Sony Ericsson, Nokia and Huawei are the suppliers of booster equipments. Each one has contract with different telecom companies. So we can say that bargaining power of suppliers is a bit higher, but Warid having a strong financial base do not face any difficulty in contracting these suppliers.

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The Threat of Substitute Product or Service:

The threat of substitute product is high because government of Pakistan is giving many landline and wireless loop to different companies like PTCL wireless loop and GO CDMA. Although currently they are only providing SMS and CLI services but in future it is expected that they will offers exact services like mobile phones.

SWOT Analysis of Telecom Sector:

SWOT Analysis is a tool that identifies the strengths, weaknesses, opportunities and threats for the organization. Specifically, SWOT is a basic, model that assesses what an organization can and cannot do as well as its potential opportunities and threats.

Major difference between SWOT and PEST analysis:

PEST assesses a market, including competitors, from the standpoint of a particular proposition or a business.

SWOT is an assessment of a business or proposition, whether your own or a competitor’s.

SWOT Analysis of Warid Telecom is given below :

Warid like all other organizations possesses some strengths, weaknesses, threats and opportunities.

Strengths of Warid Telecom:

Warid’s strengths are those features and packages which gives Warid Telecom an edge over other telecommunication services providers in Pakistan. Warid key strengths are discussed below;

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Opportunities available to Warid Telecom:

If Warid Telecom improves its network coverage it can attract million of more customers.

Warid can utilize Wateen’s gateway technology for connectivity purposes. If it did this, on one hand Warid can offer surprisingly lower call rates to its customers, since Wateen is Warid’s sister company. On the other hand it will get ride of PTCL’s heavy taxes for using PTCL’s gateway.

Warid is an Arabic brand name; millions of pro-Islam and anti-Western customers can be attracted by effective marketing strategies.

Warid should treat education sector as a separate segment because it is a huge segment, ignored by other telecom companies.

Threats to Warid Telecom:

Competitor’s strong and effective advertising strategies are distorting the initially developed good image of Warid Telecom.

Customer’s unsatisfied state due to weak network coverage of Warid may create a weak competitive ground for Warid.

Weak customer care department may affect its present customer’s satisfaction.

Employees at Warid are not happy with their salaries and treatment by seniors which can lead to some drastic results for Warid in future Call connectivity and call crossing problems may hurt customer’s loyalty.

Most of the franchisees are not satisfied with companies’ strict policies regarding their rights. Their complaint is that company is not cooperating with them in marketing and advertising efforts.

Specifically Ufone and Telenor’s attractive packages like Free Minute and SMS bundle packages are a serious threat to Warid.

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Conclusion:

So far looking at the Warid strategies, we have come to conclusion that to survive in the long run Warid is doing strategic partnership with Nokia and Ericson. It’s like that they can’t manage their network by their own. Its seems they can’t do research of market so they are taking help from international companies that are already functioning in the Pakistan.

Warid is increasing its customer base, but not considering quality of their network. So it will create problems for them in the future. Customer complaints are not fulfilled by the Warid. There is no rapid response to the need of the customers. Warid is not very successful globally. It is functioning in Bangladesh and Uganda, these are developing countries. And Warid is not very successful in both of the country. Warid is now unable to continue its cost leadership strategy. Its can’t low its prices any more.

At the operational point Warid is not good. It seems it is going to be sold.

So in the long run it is difficult for the Warid to survive. Changing of its corporate.

Slogan gave the idea that it is not any more customer oriented company

References:

Book Consulted: Title: Marketing Planning and Strategy Author: S. Jain

Edition: 6thURLs Visited: www.knowthis.com www.answers.com www.netmba.com www.wikipedia.org

http://netxpress.com.pk/2008/05/12/pakistan-stock-market-has-huge-potential-us ambassador/

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http://www.wikipedia.org/

http://www.netmba.com/

http://www.answers.com/

http://www.knowthis.com/

Documents

Strategic Implementation